Today’s ONS figures complete an unmitigated rout of the UK recovery myth
By John Ward: The first piece of bad news is that overall export volumes are down. Trust me Mr Osborne, you can’t have a nascent recovery and falling export volumes.
The second bad news is that, going forward, exports of goods are going backwards, as it were.
Exports of UK goods decreased by 4.0%
between December 2013 and January 2014 to £24.2 billion. This gave a
Britain an overall trade deficit in goods and services of £2.6 billion
in January, compared with a deficit of £0.7 billion in the previous
month.This strongly suggests that, far from rebalancing, the UK economy is becoming even more biased toward services – especially financial services. And that is nailed by the appalling goods deficit:The deficit on trade in goods was £9.8 billion in January 2014.
The deficit on our goods export volumes is now a staggering 38% of the total. We are making fewer goods and importing more of them – the total imported in January was £34bn.
Now for the third piece of broader, longer-term bad news:
Exports to countries within the EU decreased by 1.9% to £37.1 billion in the three months ending January 2014. But imports from EU countries also decreased 1.7% to £54.6 billion over the same period.
This is a most unusual statistic: the EU’s economy is starved of investment, and thus exporting less…but it is also fiscally strapped, and thus importing less.
Whichever way you cut that, the EU is in very deep trouble. It is stagnating, but the level of stagnation and debt is being cleverly hidden by the ECB under Mario Draghi. But Georgie and Dave want to stay in.
If so, you’d hope we could see an improvement in UK exports to non-EU countries, right? Nope, they fell too.
Now – using that as the segue – let’s move to the fourth piece of even broader bad news: the continuing fall in exports to Asia and so forth highlights what everyone who’s awake worked out by late last year – the entire globe is tumbling into a slump.
Now I have more news for the Chancellor: no British Government in history – not even at the height of Palmerston’s gunboat diplomacy – has ever gone alone into recovery when the world was shuddering to an economic halt.
But can we be sure the world is heading that way? Well, China’s awful data earlier this week was another massive hint. But perhaps the biggest signal of all is what’s happening to copper prices. Copper is one of the most broadly used industrial metals on Earth – making everything from central heating pipes to the rivets in upmarket jeans. It is therefore always seen as an indicator of industrial demand. It is, to be frank, never wrong on that dimension.
The copper price is collapsing…and the trend is accelerating. Since yesterday, copper on the London Metal Exchange has dropped a whopping 9%. The day before, Shanghai-traded copper futures fell 5.4%, a fifth straight daily loss.
As it happens, market traders generally on the bourses have also always seen falling copper prices as the beginning of the end for any Bull market.
We now have some very strong indicators that both an economic slump and a financial crash are coming….very soon.
The week started here at The Slog with a vicious demolition of the so-called optimism signals about UK recovery. The next day I pointed out that solid sales data suggested the opposite of recovery. On Wednesday I broke the news that Bank of England Governor Mark Carney thinks the recovery is a mirage. Yesterday, I showed how our investment levels are too poor to support a proper across-the-piece recovery. And today, the export figures from the ONS confirm the unreality of this whole recovery myth: exports are down, and goods exports are awful.
It wasn’t hard to show this. Anyone spot Ed Balls getting anywhere near it?
Even if we were equipped to sell desirable goods, the world is heading for an all-time slump. As long as we have nothing to sell and nobody to buy, there palpably obviously can’t be a recovery. There never was…and there never will be until we have a Government in power prepared to face the truth, and with the experience to do something about it. That knocks all four existing Parties out of the running.
Anyway, we have one late football result:
Slog United 5 Osborne Telegraph Wanderers 0.
Sadly, the result came in much too late for anyone’s pools coupon. Least of all Britain’s.
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