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gruffydd

Falling Exports Scupper Uk Recovery Hopes

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An export led recovery - :rolleyes: PS. David Kern needs a new brain!

Exports fell in August, signalling an end to a resurgence that policymakers hoped would rescue the British economy.

Economists said the figures, which showed a 2.1% decline in exports, were a worrying sign that the slowdown in the world economy would restrict growth in British exports.

The trade balance narrowed to £4.6bn after an even bigger drop in imports during the month. Britain's goods trade gap with the rest of the world narrowed to £8.23bn in August, broadly in line with expectations.

Howard Archer, chief European and UK economist at IHS Global Insight, said: "Signs of net trade riding to the rescue of the UK economy remain conspicuous by their absence."

Disappointingly for the government, while exports to the eurozone increased by 1.3%, exports to non-EU countries dropped by 4.9%.

The UK deficit compares with a $20bn (£12.7bn) surplus in Chinese net trade for August and $104bn surplus this year. India is running a $59bn surplus this year, while the eurozone countries have managed a $2.2bn surplus, largely on the back of German exports to the far east.

Commenting on the UK trade figures, David Kern, chief economist at the British Chambers of Commerce, said: "It is disappointing that exports fell slightly, but imports fell even more, and overall the result was an improvement in the net trade position.

"While this is positive, the improvement this year is by no means sufficient, and it is critical that the relatively strong manufacturing figures we have seen recently should be translated into a much stronger trading position.

"With the forthcoming spending cuts set to dampen domestic demand, the UK economy risks declines without significant growth in our net exports."

He warned ministers to support exports with short-term trade finance or risk losing out further in fast-growing markets such as China, India and Brazil."

Andrew Goodwin, economic adviser to the Ernst & Young Item Club, said the winter months were unlikely to provide exporters with the lift they wanted.

"Most worrying is further evidence that exports are levelling off, having recovered strongly over the first half of the year," he said. "This is consistent with the weaker data on export orders from recent business surveys and reflects a softening in global demand. There has been a notable drop-off in demand from our key export market, the European Union.

"We appear to be entering a soft patch for global growth, with major question marks over short-term growth prospects in both the US and eurozone. We expect these to be overcome but only after a period of subdued growth through the winter."

Britain's trade deficit widened to a post-war record in July after a surge in imports. Figures for imports showed a £4.9bn deficit, taking the quarterly figure to £13.2bn in the three months to July – the largest deficit since annual records began in 1946.

Edited by gruffydd

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An "export led recovery" is just a short had for a recovery based on a surplus in the foreign accounts. It can be achieved by reducing imports even more. Actually, this is usually what happens, as it takes time to develop new export markets, but people usually stop importing pretty quickly when TSHTF. (I wrote about it before here.) And indeed the news you posted today reads: "Exports drop 2.1% as slowdown in global economy cuts sales abroad but trade balance improves as imports fall even more." And as sterling falls more, we will import even less. And we have no choice actually, as we were living well beyond our means as a nation.

.

Edited by Tired of Waiting

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An "export led recovery" is just a short had for a recovery based on a surplus in the foreign accounts. It can be achieved by reducing imports even more. Actually, this is usually what happens, as it takes time to develop new export markets, but people usually stop importing pretty quickly when TSHTF. (I wrote about it before here.) And indeed the news you posted today reads: "Exports drop 2.1% as slowdown in global economy cuts sales abroad but trade balance improves as imports fall even more." And as sterling falls more, we will import even less. And we have no choice actually, as we were living well beyond our means as a nation.

.

A repositioning of exports vis a vis imports, while both are falling, is not the same as export-led growth. Surely most economists are referring to export-led growth when they write about the potential for an export led recovery?

Edited by gruffydd

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Economists said the figures, which showed a 2.1% decline in exports, were a worrying sign that the slowdown in the world economy would restrict growth in British exports.

The trade balance narrowed to £4.6bn after an even bigger drop in imports during the month. Britain's goods trade gap with the rest of the world narrowed to £8.23bn in August, broadly in line with expectations.

2.1% drop over what period? What was the % drop for imports?

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Isn't this the same as happened in the US, with all the stimulus? And debasing the currency probably won't fix it.

Price inflation + decrease in employment = less of what we need.

Someone is farked, and I don't like the bets the BoE is placing. Hope it's not me.

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Someone is farked, and I don't like the bets the BoE is placing. Hope it's not me.

Me too.

(Since some people don't seem to like +1)

Edit: splung

Edited by Snugglybear

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Maybe the data is crap.

http://www.telegraph.co.uk/finance/economics/8059546/UK-net-trade-fails-to-ride-to-the-rescue.html

The recent Markit/CIPS purchasing managers' index (PMI) found that while manufacturing activity was still growing, export orders last month fell for the first time in more than in year.

David Kern, economist at the British Chambers of Commerce, said it was "critical" the relatively strong data for manufacturers translates into a much stronger UK trading position.

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Overcapacity + oversupply = deflation.

In closed models, perhaps. In the USA, maybe.

But not in the UK, a country where 40% of household expenditure goes to products/commodities priced in foreign currencies, including energy, food, and many manufactured products, priced mainly in Dollars and Euros.

Here: over-leveraged = recession = sterling dropping = imported inflation.

Stagnation + Inflation = Stagflation.

Edited by Tired of Waiting

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When are the next GDP figures out?

Must be bad surely?

Here's a figure

"IHS is a Three-letter acronym that can refer to: A common Christogram based on the first three letters of "Jesus" in Greek"

"IHS Global Insight"

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  • 150 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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