UK Takes another turn for the Worse

First Post:

Every time I switch on the TV, I’m bombarded with information about how bad the UK Economy is. But what does it mean and how does that have any effect on us.

The UK’s trade deficit has increased from £1.7 billion to £4.2 Billion which is a 147% increase according to the Office for National Statistics.

If you’re any kind of s student you may asking yourself what is the Trade Deficit. Well it’s simply a description of the Country’s balance in Payments Account, which records the difference in the values of good imported (bought from other countries) and goods exported (UK good sold to other countries.  For the last thirty years or so, the UK has had a Trade deficit which shows we’re consuming more import goods then we ought to, simply because we aren’t exporting enough. The money to finance the trade deficit has to come from somewhere so we now owe billions of pounds to countries such as China and Japan which we have to pay in the future for the Goods we’ve bought such as our electronics  and clothes. This debt is another worry on top of the UK’s Budget deficit which was caused by the excessive spending from the Government on our behalf. These debts are accumulating day by day in the millions as the interest builds up and we have to pay it one day!! So the more we consume now, the less money will have in the future to consume.

You may be wandering what is the big fuss about the trade deficit…. Well there are reasons for and against this. For example:

- It’s not  hugely important problem because nearly all other European countries have Trade deficits too. Really only industrial giants such as Germany and Russia have trade surpluses, so instead of owing money to other countries, other countries owe them money. Also the debt works out be £70 per person, which isn’t much at all.

- However as I said before we can’t continue building more and more debt because like all debt it has to be paid back. It’s as if the country has completely maxed out on all its Credit card. If we don’t pay, someone else will and this could be our children or even possibly our grandchildren. Therefore I think there should be more concern about this issue not only in Parliament but elsewhere in the UK too, people should be more aware of the country’s financial state.

We are the Citizens, we are responsible for it.

Rich Amoah

Economics Editor