Trade deficit highest for a decade

THE UK'S TRADE DEFICIT has reached its highest level for almost a decade, according to official figures out yesterday, dragging down economic growth to its lowest level for six years.

British exports to Asia plummeted in 1998, taking the global deficit on traded goods to pounds 20.6bn, its highest level since 1989, Office for National Statistics data revealed.

The value of exports to crisis-ridden south-east Asia tumbled by 27 per cent last year, and preliminary figures for the first month of 1999 indicated that the worst could be yet to come.

The deficit on traded goods with countries outside the European Union rose to pounds 2.2bn in January, its highest level since the series started in 1988.

Government statisticians calculated that Britain's soaring trade deficit wiped 1.1 percentage points from fourth quarter economic growth. City economists warned that the trade deficit would continue to drag on growth during 1999.

Despite the sharp fall in exports, the ONS left its estimate of growth in fourth quarter gross domestic product (GDP) unchanged at 0.2 per cent, with continued strong growth in services helping to outweigh the negative trade effect.

However, ONS revisions to GDP data earlier in the year meant that the year-on-year growth rate was revised down from 1.6 per cent to 1.3 per cent, the lowest level for almost six years.

The latest data, taken together with yesterday's evidence to Parliament from Eddie George, the Governor of the Bank of England, left the door open for further interest rate cuts in the months ahead, analysts said.

Speaking to MPs on the Treasury Select Committee, Mr George - who will today make his first speech in the North-east since his controversial remarks about jobs losses in the region - indicated that his concerns about inflationary pressures in the labour market had abated.

Mr George said he found it "difficult to explain" the pound's recent strength against the euro. However, he denied that the euro - which hit new record lows against the dollar yesterday - was facing collapse.

The Governor also urged industrial countries to do more to boost growth in the troubled emerging markets.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine