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Sisyphus

Uk Trade Gap At Record

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The gap in trade of goods remained at 6.5 billion pounds

($11.3 billion), unchanged from January's level which was revised

up from 5.7 billion pounds, the Office for National Statistics in

London said today. The result exceeded the median prediction of

5.7 billion pounds in a Bloomberg News survey of 28 economists.

http://www.statistics.gov.uk/pdfdir/trd0406.pdf

Some good stats here.. but the deficit is deepening.

Edited by Sisyphus

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This BBC page record deficit

includes the statement and quote;

"Simon Wallace from the Centre for Economics and Business Research said he thought it unlikely that the trade balance would influence the Bank of England's Monetary Policy Committee when it makes its decision on interest rates, currently at 4.5%.

But Mr Wallace warned that, in the longer term, the trade balance could become an issue for the committee.

"If economic growth loses steam in the second half of the year, the trade deficit will back the argument for lower rates." "

So the medicine for this is to lower interest rates so that we can fuel demand if the economy runs out of steam and continue to suck in imports? I'm no economist but this doesn't seem right to me.

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This BBC page record deficit

includes the statement and quote;

"Simon Wallace from the Centre for Economics and Business Research said he thought it unlikely that the trade balance would influence the Bank of England's Monetary Policy Committee when it makes its decision on interest rates, currently at 4.5%.

But Mr Wallace warned that, in the longer term, the trade balance could become an issue for the committee.

"If economic growth loses steam in the second half of the year, the trade deficit will back the argument for lower rates." "

So the medicine for this is to lower interest rates so that we can fuel demand if the economy runs out of steam and continue to suck in imports? I'm no economist but this doesn't seem right to me.

or the double whammy of lower growth coupled with imported inflation - maybe there are better Economists here could comment

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Balance of payment deficiets may well be comming back into consideration

This is the FT talking about the $;

The dollar, that great symbol of American financial hegemony, is facing the risk of a regime change on currency markets.

For the past 15 months, these markets have been dominated by interest rate differentials. The dollar has been the winner ......

But there is now serious talk that the forex market’s attention may be about to shift and focus once more on structural issues such as current account deficits and central bank reserve diversification. Given the economic imbalances of the US, that would put pressure on the dollar

and presumably the £ ?

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I can't help but think that the BBC want to plug low rates as a good move irrespective of what they are commenting on.

I've not seen an article yet that said higher IRs would be good as savers are getting scr3wed.

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  • 301 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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