Prospects for the UK Balance of Payments
AbstractThis paper presents disaggregated projections for the UK balance of payments up to 2020. Under conservative assumptions about underlying trends it is projected that the current account deficit will increase from 2% of GDP in 2009 to almost 5% of GDP by the end of the period. Empirical evidence indicates that a deficit of this magnitude is not sustainable and, if unchecked, will lead to a painful adjustment involving lost output and higher unemployment. The paper calls for industrial and other policies to improve UK trade performance, above all in manufacturing, but also in knowledge-intensive services (communications, consultancy, R&D, media etc). It also points out the need to safeguard London’s role as a global financial centre.
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Bibliographic InfoPaper provided by ESRC Centre for Business Research in its series ESRC Centre for Business Research - Working Papers with number wp394.
Date of creation: Dec 2009
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Web page: http://www.cbr.cam.ac.uk/
Balance of Payments; forecasts; visible trade; services; investment income; industrial policy.;
Find related papers by JEL classification:
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
- F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- L80 - Industrial Organization - - Industry Studies: Services - - - General
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