Trade deficit highlights more difficulties for the UK economy

29 March 2011

New economic figures out today Britain's goods trade gap has widened to its highest level ever to £26.8bn over the last three months of 2010. However, in better news, the final revision of GDP for the fourth quarter has been reduced to a fall of 0.5%, down from the previous 0.6%Meanwhile house prices showing further declines in February when compared to the same month last year.The Land Registry figures shows prices fell 0.8% month on month, compared to a 0.2% rise in Jan. Annual rate of decline increased to 1.7% from 0.9% in Jan.Low interest rates are still heavily influencing the figures with the low exchange rate ( caused in part by low interest rates) pushing up the prices of imported goods and thus contributing to the trade gap.  Meanwhile manufacturing industry is doing well as their goods are cheaper abroad.  But of course, low interest rates have helped stop a crash in the housing market.  It certainly is a fine balancing act!But we need GROWTH!