UK trade deficit worse than expected

Thrugelmir

How secure is the recovery of the UK economy? Seems as if Europe needs us more than we need them as a trading partner.

The UK's trade deficit was worse than expected in February, official figures show, as its goods trade gap with the EU widened to a record level.
The Office for National Statistics (ONS) said the goods trade deficit was £12bn in February, while January's figure was revised sharply higher to £12.2bn.
The goods trade deficit with the EU hit a record high of £8.6bn.
Meanwhile, industrial production fell by the most in two-and-a-half years.
In ONS figures released separately, the UK's industrial output fell 0.3% in February from the previous month, the biggest decline since August 2013.
Manufacturing output fell by 1.1% from January, and was down 1.8% from a year earlier.
"Chancellor George Osborne will have been expecting a slight drop in today's manufacturing production figures, especially amid the furore of steel giant Tata signalling their intention to close their Port Talbot plant, but the severity of the fall will have been surprising," said Dennis de Jong, managing director at UFX.com.
"Global steel prices isn't the only issue hurting manufacturing production. The rapidly approaching Brexit referendum is on a knife edge and, with the outcome uncertain, it may cause orders to dry up until the votes are counted."
The ONS said the total trade deficit figure for January was now £1.8bn bigger than previously estimated, because of a big revision in imports of non-EU goods, specifically gold.
The total trade deficit - in goods and services - was £4.8bn for February, while January's figure was revised higher to £5.2bn.

http://www.bbc.co.uk/news/business-35996400

Generali

Thrugelmir wrote: »

How secure is the recovery of the UK economy? Seems as if Europe needs us more than we need them as a trading partner.



http://www.bbc.co.uk/news/business-35996400

Apparently this shows how desperate the Germans are to sell to the UK. Apparently.

cells

without a more detailed breakdown its hard to know whats going on

for instance it mentions gold. I read someone one that London was becoming a big vault for gold investors. ETFs taking in money from around the world buying gold and storing it in London.

So if a billion pounds flows in and a billion of gold is imported it looks bad on the trade deficit but its not bad at all. London charging a fee to manage hold and secure gold holdings assets.

cells

with a free floating currency things should sort themselves out.

if we import too much goods and that isnt backed up by service exports and capital inflows the currency will fall until things balance up. Of course we should not really want a falling currency as that would indicate we were all getting poorer.

the pound has been falling vs the euro over the last 6 months but its higher than its average over the last 5 years

Generali

There's plenty of detail but nothing actually useful:

https://www.ons.gov.uk/timeseriestool?topic=/economy/nationalaccounts/balanceofpayments


Not that I can find anyway. A simple breakdown by sector for the current and previous time periods would be very helpful. A quick antrobus might help...?

michaels

Generali wrote: »

There's plenty of detail but nothing actually useful:

https://www.ons.gov.uk/timeseriestool?topic=/economy/nationalaccounts/balanceofpayments


Not that I can find anyway. A simple breakdown by sector for the current and previous time periods would be very helpful. A quick antrobus might help...?

Isn't the overall conclusion the same as always, the UK shares income out to most citizens through high levels of employment and redistribution who then like to spend their earnings whereas in Europe income tends to be concentrated towards higher earners and govts try to discourage spending. Hence Europeans produce and Chinese (capital goods) the UK and US (Consumer goods) consume. It used to be that the South Europeans provided some balance as consumers but Germany have now ensured that financially they are prevented form doing so.

Rinoa

If you have a £5Bn monthly trade deficit after being in the worlds biggest free trade area for 40 years, is it time for a re-think?

Thrugelmir

Rinoa wrote: »

If you have a £5Bn monthly trade deficit after being in the worlds biggest free trade area for 40 years, is it time for a re-think?

Will have to be at some point. As eventually there'll be consequences to pay. Not least the cost of servicing debt.

Generali

Rinoa wrote: »

If you have a £5Bn monthly trade deficit after being in the worlds biggest free trade area for 40 years, is it time for a re-think?

Better to be in deficit than rely on running a surplus.

mayonnaise

Generali wrote: »

Apparently this shows how desperate the Germans are to sell to the UK. Apparently.

Yes, the bigger the trade deficit, the more they need us it seems.

We could increase their need for us exponentially by stopping exporting anything if you follow that logic. :rotfl:

CLAPTON

mayonnaise wrote: »

Yes, the bigger the trade deficit, the more they need us it seems.

We could increase their need for us exponentially by stopping exporting anything if you follow that logic. :rotfl:

No, what it shows is your one dimensional obsession with ignoring rational economic discussion to worship at the feet of your EU god.