April 6, 2016
It’s the economy, stupid
The UK current account deficit has now hit a new high
The UK’s current account deficit has widened further to a record levels in final quarter of last year. The data from the ONS states that in the three months to December 2015 it was £32.7bn. Wow…! This is the equivalent of 7% of GDP and when we look at 2015 in total it came to £96.2bn which is 5.2% of GDP. These figures are record highs since records began way back in 1948. On the brighter side ONS figures showed the UK economy grew 0.6% in the fourth quarter of 2015 which was 0.1% higher than estimated. This means the economy actually grew by 2.3% for the whole of 2015.
Service sector growth remains subdued
Markit/CIPS services have published the Purchasing Managers’ Index (PMI) which rose to 53.7 last month which was up (albeit from a near three-year low) in February’s of 52.7. This shows growth in the UK’s services sector has picked up but on a subdued level as BBC News suggested. Chris Williamson, chief economist at Markit stated that “Business confidence remains in the doldrums as concerns about the global economy continue to be exacerbated by uncertainty at home, with nerves unsettled by issues such as Brexit and the prospect of further government spending cuts announced in the Budget,”
This economic backdrop means that now more than ever businesses need to focus on being as efficient and effective as possible to adapt quickly to changing markets and the wider economy. Having a business plan and being able to monitor and adapt the plan to changing circumstances is now more important than ever.
It is the economy…but you don’t have to be clever to realise that.