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UK current account deficit near record high at £22.4bn | UK current account deficit near record high at £22.4bn |
(about 1 hour later) | |
The UK's current account deficit was larger than expected in the final quarter of last year, official figures have shown. | The UK's current account deficit was larger than expected in the final quarter of last year, official figures have shown. |
The deficit in the three months to December was £22.4bn, only marginally lower than the all-time high of £22.8bn recorded in the previous quarter. | The deficit in the three months to December was £22.4bn, only marginally lower than the all-time high of £22.8bn recorded in the previous quarter. |
Economists had expected the UK's deficit to narrow to about £14bn in the final three months of the year. | Economists had expected the UK's deficit to narrow to about £14bn in the final three months of the year. |
One analyst described the deficit as "worryingly large". | One analyst described the deficit as "worryingly large". |
The current account deficit for the year was £71.1bn, equal to 4.4% of UK GDP and slightly lower than the highest current account deficit of 4.6% of GDP recorded in 1989, the Office for National Statistics (ONS) said. | The current account deficit for the year was £71.1bn, equal to 4.4% of UK GDP and slightly lower than the highest current account deficit of 4.6% of GDP recorded in 1989, the Office for National Statistics (ONS) said. |
The UK's trade deficit with the rest of the world - the difference between the value of goods and services the country imports versus what it exports - narrowed to £5.7bn in the fourth quarter from £10bn three months earlier, the ONS said. | The UK's trade deficit with the rest of the world - the difference between the value of goods and services the country imports versus what it exports - narrowed to £5.7bn in the fourth quarter from £10bn three months earlier, the ONS said. |
The fall in the trade deficit was partly attributed to Britain's dominant service sector - which accounts for nearly 80% of UK economic growth - which recorded a surplus in the quarter of £1.4bn. | The fall in the trade deficit was partly attributed to Britain's dominant service sector - which accounts for nearly 80% of UK economic growth - which recorded a surplus in the quarter of £1.4bn. |
The UK's trade deficit in goods also narrowed by £3bn. But this was the result of falling imports rather than any increase in exports. | The UK's trade deficit in goods also narrowed by £3bn. But this was the result of falling imports rather than any increase in exports. |
Imports fell by £3.4bn in the period, the ONS said. Imports of oil, semi-manufactured goods and finished manufactured goods fell by £1.4bn, £1bn and £0.9bn respectively. | Imports fell by £3.4bn in the period, the ONS said. Imports of oil, semi-manufactured goods and finished manufactured goods fell by £1.4bn, £1bn and £0.9bn respectively. |
The value of UK exports fell by £0.4bn. | The value of UK exports fell by £0.4bn. |
Howard Archer, chief UK and European economist at IHS Global Insight, said: "It has to be hoped going forward that improving global growth not only supports UK exports but also lifts earnings on UK investment abroad." | |
Export moves | |
A Treasury spokesman said although the current account had widened over the year, the data showed some "very good performance in the trade element". | |
He said: the trade deficit had almost halved between the third and fourth quarters, with exports increasing by 2.8% and imports falling by 0.4%. | |
"In the Budget the chancellor expressly said that we need to export more, hence the move to double the UK's export direct lending programme to £3bn and reduce the cost of long-distance flights for exporters and visitors to the UK by abolishing two tax bands," they added. | |
The UK's income account - the income from its overseas investments compared with the return other countries receive on their investment in the UK - recorded a deficit of £10.3bn in the quarter. | The UK's income account - the income from its overseas investments compared with the return other countries receive on their investment in the UK - recorded a deficit of £10.3bn in the quarter. |
The ONS said the deficit in the income account was due to the pound strengthening against other currencies during the period. | The ONS said the deficit in the income account was due to the pound strengthening against other currencies during the period. |
Separately, the ONS kept its estimate for UK economic growth in the fourth quarter of 2013 unchanged at 0.7%. | Separately, the ONS kept its estimate for UK economic growth in the fourth quarter of 2013 unchanged at 0.7%. |
But it revised down its figure for growth during 2013 as a whole to 1.7% from a previous estimate of 1.8%. | But it revised down its figure for growth during 2013 as a whole to 1.7% from a previous estimate of 1.8%. |
It added that the UK services sector had got off to a solid start in 2014, growing by 0.4% in January. | It added that the UK services sector had got off to a solid start in 2014, growing by 0.4% in January. |