New Labour and HMG revive trade deficit

#1
The current account recorded a deficit of £1.7 billion in the fourth quarter of 2009, down from a revised deficit of £5.9 billion in the previous quarter. The fourth quarter deficit is equivalent to -0.5 per cent of GDP, compared to -1.7 per cent of GDP in the previous quarter.































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Balance of Payments: UK current account deficit falls



Current account
The current account recorded a deficit of £1.7 billion in the fourth quarter of 2009, down from a revised deficit of £5.9 billion in the previous quarter. The fourth quarter deficit is equivalent to -0.5 per cent of GDP, compared to -1.7 per cent of GDP in the previous quarter.

The current account deficit improved as:

* the income surplus increased by £5.0 billion to £10.3 billion
* the surplus on trade in services increased by £0.3 billion to £12.4 billion

This increase was partly offset as:

* the deficit on trade in goods increased by £1.2 billion to £21.0 billion

Trade in Goods
Exports increased by £4.4 billion to £60.8 billion mainly due to increases in exports of finished manufactured goods, oil and semi-manufactured goods. Imports increased by £5.6 billion to £81.8 billion, primarily due to increases in imports of finished manufactured goods and semi-manufactured goods.

Trade in Services
Exports increased by £0.7 billion to £39.9 billion, mainly due increases in financial, transportation and communications services. Imports increased by £0.4 billion to £27.5 billion, primarily as a result of increases in government and construction services.

Income
UK earnings on investment abroad increased by £4.4 billion to £45.2 billion, primarily due to higher earnings on direct investment abroad. Foreign earnings on investment in the UK decreased by £0.6 billion to £34.7 billion - this was due to lower earnings on other investment, which were partly offset by increases in earnings in foreign direct investment and portfolio investment.

Current Transfers
The deficit on current transfers reduced by £0.2 billion in the fourth quarter to £3.3 billion. This was mainly due to a fall in payments to EU institutions.


The current account recorded a deficit of £18.4 billion in 2009, down from a deficit of £22.0 billion in the previous year. The 2009 deficit is equivalent to -1.3 per cent of GDP, compared to -1.5 per cent of GDP in the previous year.

The current account deficit improved as:
* the deficit on trade in goods reduced by £11.6 billion to £81.8 billion

This decrease was largely offset as:

* the surplus on trade in services decreased by £5.8 billion to £49.3 billion
* the surplus on income decreased by £1.6 billion to £28.7 billion
* the deficit on current transfers increased by £0.6 billion
 

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