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Trade: Deficit

Volume 691: debated on Monday 16 April 2007

asked Her Majesty's Government:

What steps they intend to take to reduce the United Kingdom's trade deficit of £55.8 billion in 2006. [HL2999]

The Government’s strategy continues to be ensuring that there is strong competition in every UK market by promoting openness to free trade, minimising product market regulation and ensuring that the UK’s competition enforcement authorities are world class. Similarly, the Government actively engage trading partners to promote best practice of free trade and the reduction of international trade barriers.

Despite the UK trade deficit reaching 4.2 per cent of GDP in 2006, the economy is very different from when the deficit last peaked at 4.1 per cent in 1989. In 2006 the current account deficit was just 3.4 per cent of GDP, compared with 5.1 per cent in 1989, and, moreover, the current account can be readily financed.