Fair trade? World trade boost helps UK’s current account deficit
THE UK has continued to run a trade deficit with the European Union (EU) but trade with the rest of the world has dramatically improved, indicating Britain would continue to prosper once Brexit has been finalised.
Tory MP: Brexit gives UK more trade opportunities with Asia
Official figures from the Office of National Statistics (ONS) show that the country’s trade deficit with the EU as a whole was £19.5 billion in the last three months of 2016.
This was an improvement on the previous quarter of last year when the figure stood at £22.7bn.
However, while the UK was running a sizeable trade deficit with the bloc it’s position with the rest of the world was in a much healthier situation.
Related articles
In comparison, Britain ran a substantial trade surplus with the countries outside the EU of £7.4bn in the final quarter of last year, up significantly from £3bn in the previous three months.
It is the UK’s largest surplus with the rest of the world since 2013.
Overall, the weaker pound helped improve the UK’s current account deficit - a measure of a country’s trade and earnings from abroad - which shrank to £12.1bn in the final three months of last year, a sizeable reduction on the £25.7bn figure for the third quarter of last year.
The reduction means that the current account deficit is equivalent to just 2.4 percent of GDP, its lowest rate since the second quarter of 2011.
The scale of the decline - from 5.3% of national income in the third quarter - was the largest between two quarters on record, the Office for National Statistics said.
Improving Britain's balance of payments and rebalancing the economy towards trade and away from debt-fuelled consumer spending has been a longstanding goal of successive British administrations.
