Below is an Extract from The Times: it makes very interesting reading. The past few weeks we have been told how the Housing Market is picking up even at first time buyer levels.
The books are starting to balance and the deficit is reducing. The deficit is a humongous debt! To measure it they see what money has come in & compare it to how much they borrow! The national Debt is therefore growing.
All of these things aren’t explained to the people. The Political big wigs use their jargon & quite frankly huge dollops of BS to hoodwink us into thinking times are changing! Funny it happens in the final 7 weeks to an election?
The truth is what the Treasury gets in from our combined taxes is amount A. The amount borrowed every month/quarter is B so if in March the country took more in under A then the need to borrow less B = deficit shrinking!
It’s an odd one I grant you so look it it as this;
A = tax revenue paid in;
B = amount borrowed (Deficit)
C = amount needed to pay Bills
D = the interest added to B
E = the money owed by the country.
We only ever hear about A and B – the deficit but we never hear anything of C, D or E! Why not? they don’t want us to know how big the debt it is .
So every month that passes it really is the case the the money paid out is more than what we take in as tax.
In any Business this would honestly be a mega shambles & the business would go bust. It’s that simple & we are not told the truth in plain, easy language. Instead thy use 500 words that mean beggar all & keep up the pretence!
So remember when they talk about the deficit reducing it isn’t the full story! It may appear smaller than that of the previous months BUT it does not mean the country is actually getting back on its feet!
Below as promised the article from the times. If anyone has any questions please just ask.
Please note the pictures aren’t very exciting but I think you’ll see a huge difference from the previous Chancellors and Mr Osborne’s now. Happy reading 😉⭐️♿️
National current account slides deeper into deficit
Saturday 29th March 2014
Britain’s ability to pay its way in the world has hit an all-time low, raising fresh fears for the economy despite signs that its long-awaited rebalancing towards investment and trade has begun.
The country’s current account slumped to a record deficit at the end of last year as income on British investments overseas crashed. Economists said that the decline could put the pound under pressure and sap growth over the longer term.
The Office for National Statistics revealed that the deficit in the final three months of 2013 was 5.4 per cent of GDP as it revised down its third-quarter estimate to 5.6 per cent, making them the worst two quarters on record.
Analysts blamed decline on the appreciation of sterling and slow growth in economies where the UK is invested, such as the eurozone.
The deterioration was all on the income side of the account as the trade deficit narrowed from 2.5 per cent to 1.4 per cent between the third and fourth quarters. For 2013, the current account deficit was 4.4 per cent, the worst since the peak of the 1989 boom.
To balance the books, Britain has become increasingly reliant on huge financial inflows from overseas, which Samuel Tombs, of Capital Economics, said were fuelling “existing concerns that the UK’s recovery is too dependent on unsustainable sources”.
Foreign purchases of UK shares, companies and houses in London, as well as other investments last year, offset the £71 billion paid in dividends and profits paid from Britain to overseas.
Rob Wood, an economist at Berenberg Bank, warned that Britain was “storing up big problems for the future” and said that authorities may need to “aim for slower domestic growth in order to erode the imbalances that are building up”.
Simon Wells, UK economist at HSBC, said: “If the income account continues to deteriorate, the UK could find it harder to sustain its persistent trade deficit. Eventually, this could mean that lower sterling and slower growth may be needed.”
Despite mounting longer-term fears about the current account, the immediate economic outlook appeared to improve. The ONS confirmed that the economy had grown by 0.7 per cent in its third estimate of growth for the final three months of last year, but the details showed that trade and investment were the two largest contributors.
Trade added 1 per cent to growth and investment 0.3 per cent, compared with household consumption, which contributed 0.2 per cent. That was offset by a 0.8 per cent decline in inventories.
“It is good news that growth was better balanced in the fourth quarter, with a fall in the trade deficit and an increase in business investment,” David Kern, chief economist at the British Chambers of Commerce, said.
The profitability of companies also improved, rising 5.4 per cent in the quarter and 4.8 per cent compared with last year.
The Chancellor is pinning his hopes for the recovery on businesses finally spending on new facilities, equipment and research to boost the real economy. The ONS revised its estimate of annual business investment in the fourth quarter from 8.5 per cent to 8.7 per cent.
“The detailed data revisions were favourable,” Mr Wood said. “The contribution of inventories was lowered considerably and net trade is now estimated to have bounced back from the disastrous third-quarter performance. Together that suggests less risk to growth through 2014.”