Tag Archives: Economy
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.
The Office for Budget Responsibility told the Prime Minister that it does believe that cutting public spending will reduce economic growth in the short term.
Robert Chote, the head of the OBR, contradicted a claim Mr Cameron made this week in a speech about the economy, in which the Prime Minister said the forecaster does not believe cuts are reducing growth.
In fact, as Mr Chote wrote, the OBR believes that cuts in spending and increases in tax will depress economic activity, meaning lower growth.
Vince Cable has become the first cabinet minister to question George Osborne’s “plan A” economic strategy by suggesting that the Treasury should use Britain’s record low interest rates to increase borrowing as a way of stimulating growth.
On the eve of a speech by David Cameron on the economy, in which the prime minister is expected to criticise Labour for demanding increased borrowing, the business secretary said that greater public investment was “crucial” to reviving the economy.