UK current account deficit at new high

Thrugelmir

Still no sign of any improvement.

The UK's current account deficit widened to a record high in the final quarter of last year.
The deficit in the three months to December was £32.7bn, the equivalent of 7% of GDP, said the Office for National Statistics (ONS).
For all of 2015, it came to £96.2bn or 5.2% of GDP. Both figures were the highest since records began in 1948.

http://www.bbc.co.uk/news/business-35931968

Mistermeaner

So is it time to start borrowing to spend more or time to stop fannying around and make some proper cuts

CLAPTON

Thrugelmir wrote: »

Still no sign of any improvement.



http://www.bbc.co.uk/news/business-35931968

Some think it doesn't matter, as we can fund this current consumption by selling off UK industry, by attracting inward investment and borrowing foreign exchange.
The expanding population will require increasing level of essential imports (fuel, food etc).
Others think it will auto correct by importing large numbers of young hardworking people from the EU.
However, it does allow us to live at a higher standard than would otherwise be affordable.

There will be a correction one day with a large devaluation.

Thrugelmir

CLAPTON wrote: »

Some think it doesn't matter, as we can fund this current consumption by selling off UK industry,

Been selling the British Empire silverware for years. Little of real value left.

cells

The UK has 'virtual' exports.

When a Chinese student comes to the uk to study for 4 years they pay in excess of £150,000 - £200,000 in fees and living costs.

CLAPTON

cells wrote: »

The UK has 'virtual' exports.

When a Chinese student comes to the uk to study for 4 years they pay in excess of £150,000 - £200,000 in fees and living costs.

over the equivalent 4 year period the deficit is 385,000,000,000
which would require 2,500,000 chinese students

Backbiter

cells wrote: »

The UK has 'virtual' exports.

When a Chinese student comes to the uk to study for 4 years they pay in excess of £150,000 - £200,000 in fees and living costs.

Doesn't the current account deficit take into account the value of services we sell abroad? So wouldn't that income from foreign students be already taken into account?

Generali

Mistermeaner wrote: »

So is it time to start borrowing to spend more or time to stop fannying around and make some proper cuts

Wrong deficit fella.

cells

CLAPTON wrote: »

over the equivalent 4 year period the deficit is 385,000,000,000
which would require 2,500,000 chinese students

The uk should aim to greatly expand its top 10-20 universities with most the additional space used for foreign students paying top dollar

And of course that is just one example of a 'virtual export'. Tourism is another with London now supposedly #1 or #2 in the world ranking for tourists.

Another would be retail spend by forigners. again apparently London is the worlds #1 non food retail sale city not exactly sure how that has happened but it suggests maybe some big spending tourists

Yet another example would be IP inside products like iplods that use ARM tech.

cells

Backbiter wrote: »

Doesn't the current account deficit take into account the value of services we sell abroad? So wouldn't that income from foreign students be already taken into account?

if we sold some sort of over the internet course then perhaps but afaik a student coming here and paying £200,000 to tuition/rent/food just shows up as £200,000 of domestic GDP and £200,000 of capital inflows

Likewise if someone spends £100 million buying 1 hyde park it shows up as £100 million of capital inflows but for all intents its a 'virtual export' of some bricks and mortar.

Lingua

cells wrote: »

The uk should aim to greatly expand its top 10-20 universities with most the additional space used for foreign students paying top dollar

And of course that is just one example of a 'virtual export'. Tourism is another with London now supposedly #1 or #2 in the world ranking for tourists.

Another would be retail spend by forigners. again apparently London is the worlds #1 non food retail sale city not exactly sure how that has happened but it suggests maybe some big spending tourists

Yet another example would be IP inside products like iplods that use ARM tech.

My uni already has a burgeoning foreign student population. It makes for a wonderful multicultural experience, but there has to be a balance between local and foreign students or (as has been witnessed nationally with immigration) you get a lot of pushback. I for one am happy to be able to go to a language cafe and hear a dozen languages and see so many mixing cultures, but not everybody is so liberal, even at 'liberalising' univerisites!

Also, the govt has removed the cap from uni admissions so I believe. They'll be welcoming plenty more students from abroad in no time, I'm sure, especially when they can get such high accommodation fees from them as non-EU students tend to have to stay in halls for the duration of their study due to visa requirements. Lucky them.