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GDP grows but current account deficit near record high ahead of UK election


economy

GDP grows but current account deficit near record high ahead of UK election

With the British election hurtling towards us the latest economic figures appear to offer ammunition for both of the two main parties.

The ruling Conservatives can point to faster than expected growth at the end of last year on the back of a mini export boom, and rising household incomes as proof their policies are working.

GDP grew by 2.8% in 2014, but this may not last as the dominant service sector is expected to slow in 2015. And the Labour opposition will point the higher current account deficit.

“The overall picture and the economic outlook for the UK still looks
relatively rosy. Unemployment is falling, wages are rising. So that 
should keep consumer confidence quite strong for the foreseeable
few months,” says FX Pro’s Angus Campbell.

David Cameron faces another uncertain election outcome when a new coalition may be needed, while Labour’s Ed Milliband may also be forced into partnership in the most unpredictable vote in decades.

Over the next five years only one thing is certain. Any winner will have to continue cutting spending and reducing that deficit, close to its record high of 5.5% of GDP.

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