Britain's current account deficit has ballooned to its highest ever level, official statistics showed yesterday, raising fresh concerns about the sustainability of the UK’s recovery.
The balance of payments gap shot up to £27bn in the three months to September, equal to 6 per cent of GDP. The current account deficit for the third quarter of 2013 was also revised up to 6 per cent. Both figures represent the biggest quarterly deficits registered since modern records began in 1955.
The previous record was set in the third quarter of 1988, during the Lawson boom, when the current account deficit, according to the latest figures, hit 5.1 per cent of GDP. Revisions to the GDP level since the Office for National Statistics’ previous balance of payments report revealed that the current account deficit in the 2013 calendar year was the highest annual deficit on record, at 4.5 per cent of GDP, beating the 4.4 per cent seen in 1989.
Britain's current account deficit has ballooned to its highest ever level, official statistics showed yesterday, raising fresh concerns about the sustainability of the UK’s recovery.
The balance of payments gap shot up to £27bn in the three months to September, equal to 6 per cent of GDP. The current account deficit for the third quarter of 2013 was also revised up to 6 per cent. Both figures represent the biggest quarterly deficits registered since modern records began in 1955.
The previous record was set in the third quarter of 1988, during the Lawson boom, when the current account deficit, according to the latest figures, hit 5.1 per cent of GDP
“The latest set of national accounts leave the UK’s economic recovery looking more fragile than it seemed before,” said Samuel Tombs of Capital Economics.
In the US, by contrast, growth in the third quarter was revised up to its strongest rate in 11 years. GDP rose 5 per cent on an annualised basis, up from the 3.9 per cent previously estimated. That news sent the benchmark Dow Jones index up above 18,000 for the first time ever, while the dollar also strengthened. “After four years of rocky recovery, the US economy is now hitting its stride and growth should remain good next year, with lower gasoline prices a big plus for consumers,” said Gus Faucher of PNC Financial Services.
Signs emerged yesterday of a further slowdown in the UK housing market. The British Bankers’ Association reported that mortgage approvals last month were down 20 per cent on November 2013, from 45,594 to 36,717