... with each pound we earn. The weakness of the global economy and in particular the very slow growth in the Euro Zone has damaged UK export growth. Nearly 60% of UK manufactured goods exports and over 50% of our exports of services are to fellow members of the European Union. UK trade balances have been affected by shifts in comparative advantage in the international economy - for example the rapid growth of China as a source of exports of household goods and other countries in South-east Asia who have a cost advantage in exporting manufactured products. The UK economy has been a favoured venue for overseas direct investment; the UK cannot always rely on inflows of financial capital into the economy to finance the current account deficit. The current account deficit is an indicator that UK production has deteriorated and it cannot keep up with the rest of the ...

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