March of the makers - "we live by exports" Sir Stafford Cripps (1947)

Revisions to the trade data for Q4 2010 will provide little comfort to those anticipating an improvement in the trade balance. In fact it looks as the visible trade deficit is getting worse and the service sector is flagging in its efforts to offset the visible shortfall. 

The deficit in goods and services moved to an overall deficit of £15 billion in Q4 as the trade deficit soared to over £25 billion.

In the budget Chancellor Osborne talked of the march of the makers, if this sounded like the speech from Harold Wilson in the wake of the 1967 devaluation, then check out the pamphlet “We live by exports” prefaced by Sir Stafford Cripps in 1947. “The faster we can get on with production, the better off we shall be”, were the final words in the leaflet. (really cute picture charts!). History makes fools of us all. 

Worryingly, Harold Wilson was confronted with a visible deficit of just 1.5% of GDP and a deficit in goods and services of less than 1%. The UK figures for the final quarter of 2010 are running at a rate of 6% and 4% respectively on an annualised basis.

Mapping the four horses of the economic apocalypse, we have borrowing at 10% of GDP, unemployment at 8% of GDP, a visible deficit at 6% of GDP and inflation heading to 5%. All this and a trend output gap over 6%! This is no time to be bashing bankers and the potential earnings on invisibles. Have a great week-end.

Prime Minister’s Update - the Pound in your Pocket.

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The views expressed are my own and in no way reflect pro.manchester policy. In no way should the comments be considered as investment advice or guidelines or reflect political bias. UK Economics news and analysis : no politics, no dogma, no polemics, just facts. JKA is a visiting professor at MMU Business School, an economist and specialist in Corporate Strategy, educated at LSE, London Business School with a PhD from Manchester Metropolitan University.

 

Comments

[Jim]

Am I the only person who thinks we are treading on fresh air right now? And the only thing keeping us up is a) the fact that others are in a worse position (Greece/Ireland/Portugal/Spain/arguably USA/possibly even Japan) and b) a blank refusal to look down?

Maybe its just my natural pessimism at work. I hope it is. Because if reality turns out even half like I imagine it could, well, all I can say is God help us all.

[Value]

Nothing feels like the best out of the worst Jim :)

[panel çit]

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[ankara.net]

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