A sharp fall in foreign investment income saw Britain’s current account deficit, or the balance between UK imports and exports jump to £57.7bn last year, from £20.3bn in 2011, according to the Office for National Statistics (ONS).
Despite narrowing slightly in the fourth quarter of 2012 to £14bn from £15.1bn in Q3, the deficit now represents 3.7pc of UK gross domestic product, and has not accounted for such a large share of GDP since 1989.
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The Prime Minister was issued with the explanation by the UK Statistics Authority, after he claimed in a Conservative Party political broadcast that “we are paying down Britain’s debts.”
Labour wrote to the statistics body objecting to Mr Cameron’s use of the phrase, as the Treasury has only been reducing the country’s deficit. The national debt is still rising and will continue to do so until 2016 at the earliest, although the deficit has been cut by around a quarter.
Andrew Dilnot, chairman of the Authority, wrote back confirming that national debt has risen from £811 billion to £1,111 billion at the end of 2012. He copied the Prime Minister’s Chief of Staff in Downing Street into his letter.
“It is clearly important for all parties to public debate in this area to understand the relevant statistical definitions and to distinguish changes in the level of debt outstanding from changes in borrowing per period, and to reflect these in their communication of the statistical trends involved,” he wrote.