Whilst one swallow does not make a summer, nevertheless these figures are encouraging in so far as the deficit could have been a lot worse. It maybe that the austerity program introduced into the UK will hold which is in contrast to the austerity program introduced across the Eurozone which seems to be leaking at every crevasse. I do think that the UK will follow Japan with a lost decade and it is possible that will turn into a lost generation. The root cause in the UK is having spent wildly over the last decade and a half while there was a boom rather than reducing deficits leaving surplices available to really stimulate the economy during the current lean times.
UK Balance of Payments 2nd quarter 2011
The UK’s current account deficit was £2.0 billion in Q2 2011, down from £4.1 billion in the previous quarter. The total trade deficit widened to £6.8 billion in Q2 2011 from £5.8 billion the previous quarter. Total income surplus was £9.6 billion, up from £7.4 billion in Q1 2011. The financial account recorded net investment abroad of £9.0 billion during Q2 2011. The international investment position recorded UK net liabilities of £115.0 billion at the end of Q2 2011. SummaryThe UK current account recorded a deficit of £2.0 billion in the second quarter of 2011, down from a revised deficit of £4.1 billion ... (full story)