Ukraine: Effect on British economy is 'price worth paying' says MP
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Data released by the Office of National Statistics yesterday indicated the UK’s current account deficit – the difference between the value of the goods and services the UK imports and the goods and services it exports – widened. It now stands at a record £51.7billion, or 8.3 percent of gross domestic product.
This was the biggest shortfall since records began in 1955, according to the ONS.
The deficit was also much higher than economists had forecast.
Pro-EU activists have seized on the data, claiming the figures are proof Brexit is a failure.
However, Mr Jessop highlighted figures from Brussels showing the UK was not alone in seeing a sudden plummet in the trade in goods balance.
Instead, he argued the phenomenon was being experienced worldwide.
Official European Commission data, indicates the Eurozone is suffering from a more than €30billion deficit, while the EU as a whole has a deficit of over €40billion.
Both areas had a surplus of more than €25billion in January 2021.
“If anyone tries to blame the UK’s record current account deficit in Q1 on Brexit, show them this chart,” he said.
“The UK usually has a large trade deficit on goods, offset in part by a surplus in services. That’s nothing new.
“What is new is that the EU has also plunged into a deficit on goods, largely due to surging energy prices.
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“But of course that doesn’t fit the anti-Brexit narrative.”
The ONS has itself warned against over-analysing the drop ing the UK’s balance accounts.
It warned a change in the way the data is collected post-Brexit meant there was a “higher degree of uncertainty” over the data.
Darren Morgan, director of economic statistics at the ONS, said: “While today’s figures are showing a very high balance of payments deficit, changes to the way EU imports are recorded, and challenges in collecting inward investment data, mean there is a higher degree of uncertainly with these numbers than usual.”
Energy costs across the world have soared since the outbreak of the Ukraine war.
An attempt to reduce reline on Russian gas and oil has led to wholesale prices skyrocketing, badly impacting economies around the world.
Inflation for May in the UK stood at nine percent, the highest level since 1982.
The eurozone has seen inflation hit 8.6 percent, a record high.
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