Britain goes into the black

THE London financial markets are expected to be buoyed by Friday's surprise news that Britain's current account was in balance last year for the first time in nine years.

Although the gap between imports and exports of goods widened, a record invisibles surplus kept the current account in the black in the final quarter, leaving the annual figure in surplus for the first time since 1985.

The economy expanded by 4.2 per cent last year, according to the revised GDP figures for the final quarter of 1994.

Indicators

The increase in the index from 98.97 to 99.39 was due to the continued strengthening of share markets in the UK and US and higher numbers of car registrations.

Foreign exchange

1.5932

2.2509

141.36

85.6

1.4128

88.73

90.8

London close change over week change over year

£/$

£/DM

£/Yen

£ index*

$/DM

$/Yen

$ index*

*Bank of England trade weighted index

£/$

£/DM

$/DM

$/Yen

1.5932

2.2509

1.4128

88.73

1.5865

22469

1.4142

88.15

Forward rates

Spot rate 3 months 6 months

1.5857

2.2250

1.4095

87.14

Hoare

Govett

1.45

2.40

1.65

115

12 month forecasts

1.53

2.40

1.57

103

Goldman

Sachs

The foward rate differs from the spot rate by the interest rate differential. This does not necessarily

coincide with economists' views of likely currency movements. Two city forecasts are shown.

International

Inflation

annual change, %

latest year ago

Interest rates

3 m'th money mkt, %

latest year ago

GNP/GDP growth

annual change, %

latest year ago

UK

Australia

Belgium

Canada

France

Germany

Italy

Japan

Neth

Spain

Sweden

USA

OECD

3.4

2.6

1.8

0.6

1.7

2.4

4.3

0.5

2.4

4.4

2.5

2.9

5.2

2.4

2.0

2.5

1.3

1.8

3.4

4.2

1.4

3.0

5.0

1.7

2.5

3.9

6.69

8.12

6.56

8.19

8.47

5.05

11.44

2.16

5.10

8.60

8.60

6.25

-

5.19

4.89

6.19

4.69

6.25

5.80

8.50

2.44

5.35

8.62

7.23

3.88

-

4.0

6.4

-0.7

5.6

3.8

2.7

3.7

0.8

2.1

-1.0

2.1

4.4

3.5

2.0

1.9

1.7

3.2

-1.0

-2.0

-0.8

-0.7

3.9

0.8

2.3

3.0

4.5