First Quarter Balance Of Payments £15.5bn Deficit

The UK current account deficit increased to £14.5bn in the first quarter of 2013 from £13.6bn in Q4 2012 according to a statistical bulletin from the ONS. The Q1 deficit equals 3.6% of GDP. The trade deficit improved to £6.1bn in Q1 2013 from £8.3bn in Q4 2012.

The monthly analysis shows that income balance fell to -£2.1bn from a surplus of £1bn which had the effect of increasing net borrowing from £12.7bn to £13.9bn. A decrease in the deficits of trade in goods and services of £2.1bn and in current transfers of £0.2bn partially offset the increase.

The UK was a net borrower of £55.4bn in 2012 from £18.5bn in 2011 mainly due to the income surplus of £22.5bn in 2011 becoming a deficit of £2.3bn in 2012 mainly due to a decrease in direct investment income surplus.

Trade in goods was -£26.5bn from -£28bn in the previous quarter. Exports rose by £0.9bn while imports fell by £0.5bn. Trade in services was £20.4bn in surplus up £0.7bn on the previous quarter. Exports increased to £49.4bn while imports increased by £0.3bn to £29bn.

Transfers were £6.2bn in deficit in Q1 2013, a decrease of £0.2bn.

The capital account was £0.6bn in surplus in Q1 2013 down £0.3bnn from the previous quarter. Inward investment was £10.2bn. The UK currnet account deficit £59.2bn.

GDP Down 1.9%

Preliminary estimates of GDP for the first quarter of 2009 from the Office for National Statistics on GDP by gross value added (GVA) suggest a decline of 1.9% on the last quarter compared with 1.6% the previous quarter. They also suggest it was 4.1% lower than 2008. The index for GDP at market prices was 108.1 and has been in decline for 5 successive quarters.

Production which represents about 18% of the UK economy was down 5.5%, a negative acceleration on 4.5%, driven by manufacturing. Agriculture, which now represents only 1% of the economy, actually grew by 0.3% in Q1 2009. It may only reflect the early estimated output from agriculture from DEFRA. Services, representing 75% of the UK economy, reported a fall of 1.2% drove the decline along with production and construction. It compares with a decline of 0.8% in the previous quarter. Of the total, distribution, hotels and restaurants (15% of the economy) also increased by 1.2% thanks mostly to wholesale and motor trades. Business services and finance, which represents about 30% of the economy, declined by 1.8% in Q1 2009. Five of the eight components of the category declined with 'other business services' (10% of GDP) making the biggest contribution. Government services increased by 0.5% on the quarter and 1% on the year.

The Quarterly National Accounts for Q1 2009 show a fall of 2.4% on the previous quarter revised down from 1.9%. It is 4.9% lower than Q1 2008. The index was 110.9 for GDP at market prices and 101.9 for chained volume measures. The household saving ration was 3% compared with 4% in previous quarter. Real household disposable income fell by 2.4% following a 2.4% rise last year. Household final consumption fell by 1.3% compared to a 1.1% fall in the previous quarter. The volume of spending is 3.1% lower than at the same time in 2008. Both government and households were net borrowers. Financial corporations, private non-financial corporations and public corporations were among the net lenders.