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.
Tag Archives: GDP
11 January: The Daily Telegraph reports that the National Institute of Economic and Social Research, which has earned a reputation for accuracy, has forecast that the economy contracted by 0.3% in the last quarter of 2012, meaning that over the year as a whole the economy was flat.
The figures will come as a blow to George Osborne, who has repeatedly claimed that his strategy is working and that there is no need for a “plan B”.
“It’s a disappointing set of data. We had thought that we might see a bounce back in manufacturing output over the month, but what we saw instead was a further contraction,” said Philip Shaw, an economist with Investec in London.
“Most of the official data are suggesting weakness over the fourth quarter.”
That would be further bad news for a government struggling to convince voters and economists that it can get the economy back on to a growth track while cutting public spending to reduce the budget deficit.