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The UK economy is recovery at its best rate since 2010 today with figures that are released by the British government via the Office for National Statistics (ONS). The trade deficit was reduced in June. Exports for the 2nd quarter of 2013amounted to £78.4 billion, which is the highest level recorded (coming principally from the US and China sales).
In the second quarter of 2013, the UK exported more goods to countries outside the EU than to its partners within it. Has the UK been deliberately looking for a way to replace that trade from the failing economies of the EU which have had an effect on its own economy? Or is it testing the water getting ready to see if the country could actually go it alone and benefit from leaving the EU [15] and still maintain a high level of trade from countries outside the European Union?
- The UK trade deficit stood at £2.6 billion in May and in June it fell to£1.5 billion.
- UK construction output increased in the 2nd quarter of 2013 by 1.4%compared with the 1st-quarter results.
- Manufacturing increased by 1.9% from June 2012 to June 2013.
- The deficit in UK goods fell from £8.7 billion to £8.1 billion, which is the best since this time last year.
- Exports to China increased by 20% in the 2nd quarter compared with the 2nd quarter 2012, which also corroborates the high increase in Chinese trade data regarding imports released yesterday.
There has been a need to move the British economy away from too much domestic consumption and not enough exports, especially outside of the EU in recent years. In particular, this has been the case since the start of the financial crisis in 2008. Today, figures show that exports to Germany fell by 9% for the second quarter. For a number of months UK exports to the EU have been falling, with the growing problems regarding the recession and sovereign-debt [17] issues. The UK has focused its economic attention on other areas in the world such as Latin America and Asia, offsetting the slowdown in activity in the EU. With a return to better times being announced in the EU, the UK may also be able to benefit from that momentum and gain from all areas. Perhaps also the recent data published today regarding China [18], which seems to point to the possibility of better economic times ahead in China may also have an effect on the UK economy and improve on the already-good increase in the second quarter regarding exports from the UK to China.
The trade deficit for the first quarter had the negative result of lowering Gross Domestic Product by 0.1% for the UK. Now, the hope is that the new figures released today will show an increase in GDP for the country. Estimates are showing that growth in the UK may stand at about 0.6% for the second quarter, which is double the first-quarter results.
Mark Carney [19], the Governor of the Bank of England already stated yesterday on BBC Radio 4 that he believed that there was a positive impact on UK GDP already that was showing through, regarding the BoE policies. He said that he thought that forward guidance as well as bringing unemployment down to under 7% would enable adding 0.5% to UK economic growth.
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