UK trade deficit biggest since 2008 in first quarter


The article reports that the UK’s trade deficit for the first quarter of 2016 is at its biggest since financial crisis of 2008.The gap between imports and exports has been increasing.

Topics include Balance of Payments, Current Account Deficit, Terms of Trade and Marshall Lerner conditions with diagrams and formulae. The rise in Imports of mechanical machinery, cars, clothing, jewellery and footwear coupled with fall in Exports ,mainly due to global economic weakness and slowdown in UK’s economic growth is draining its foreign currency surpluses/reserves , increasing the current account deficit and mounting depreciating pressure on the Pound.

Evaluation will cover various strategies to preserve Foreign Exchange reserves and tackle the current account deficit and Balance of Payments to restore stability on the Currency and future International Trade. Also discuss the impact on the Consumers, Domestic producers and Government in short term and long term.