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George Osborne gets mixed economic news in week before budget George Osborne gets mixed economic news in week before budget
(6 months later)
A modest narrowing of Britain’s trade gap coupled with a slight weakening in the construction sector has provided George Osborne with mixed economic news before next week’s budget.A modest narrowing of Britain’s trade gap coupled with a slight weakening in the construction sector has provided George Osborne with mixed economic news before next week’s budget.
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The Office for National Statistics said the UK’s trade deficit in goods and services with the rest of the world had eased back from an upwardly revised £3.7bn to £3.5bn between December 2015 and January 2016.The Office for National Statistics said the UK’s trade deficit in goods and services with the rest of the world had eased back from an upwardly revised £3.7bn to £3.5bn between December 2015 and January 2016.
During the same period, the output of the construction industry fell by 0.2%, with the ONS also reporting that activity in the fourth quarter of 2015 was less weak than originally believed.During the same period, the output of the construction industry fell by 0.2%, with the ONS also reporting that activity in the fourth quarter of 2015 was less weak than originally believed.
Official figures showed the UK ran a deficit of £10.3bn in goods in January, partly offset by a £6.8bn surplus in services.Official figures showed the UK ran a deficit of £10.3bn in goods in January, partly offset by a £6.8bn surplus in services.
The ONS said the improvement in January – the latest month for which figures are available – had been the result of oil and so-called “erratics”: items such as precious stones and aircraft for which there is no settled pattern for imports and exports.The ONS said the improvement in January – the latest month for which figures are available – had been the result of oil and so-called “erratics”: items such as precious stones and aircraft for which there is no settled pattern for imports and exports.
Excluding oil and erratics, the ONS said the deficit had widened by 0.5% in January. Over the three months to January – a better guide to the underlying picture than one month’s data – the deficit on goods and services stood at £11.8bn, an increase of £3.5bn on the previous quarter.Excluding oil and erratics, the ONS said the deficit had widened by 0.5% in January. Over the three months to January – a better guide to the underlying picture than one month’s data – the deficit on goods and services stood at £11.8bn, an increase of £3.5bn on the previous quarter.
Samuel Tombs, economist at Pantheon, said Britain’s economy remained unbalanced. “The overall trade deficit was £3.5bn in January, worse than the consensus, £3.0bn. December’s deficit was also revised much larger, to £3.7bn from £2.7bn.”Samuel Tombs, economist at Pantheon, said Britain’s economy remained unbalanced. “The overall trade deficit was £3.5bn in January, worse than the consensus, £3.0bn. December’s deficit was also revised much larger, to £3.7bn from £2.7bn.”
For the construction sector, the ONS said there had been a decrease in new building work offset by an increase in repair and maintenance. Public sector housing and infrastructure saw the biggest falls in activity.For the construction sector, the ONS said there had been a decrease in new building work offset by an increase in repair and maintenance. Public sector housing and infrastructure saw the biggest falls in activity.
The ONS said new data showed that construction output in the fourth quarter of 2015 was 0.3% down on the third quarter. That compared with an earlier estimate of a 0.4% fall.The ONS said new data showed that construction output in the fourth quarter of 2015 was 0.3% down on the third quarter. That compared with an earlier estimate of a 0.4% fall.
Chris Williamson, economist at Markit, said: “The UK construction sector suffered a disappointing start to the year, adding to a downbeat flow of data on the health of the economy so far this year. The data follow survey evidence showing growth slowing sharply in February amid heightened uncertainty about the economic outlook.”Chris Williamson, economist at Markit, said: “The UK construction sector suffered a disappointing start to the year, adding to a downbeat flow of data on the health of the economy so far this year. The data follow survey evidence showing growth slowing sharply in February amid heightened uncertainty about the economic outlook.”