Box sets » Current account balance
In the run-up to our March 2025 Economic and fiscal outlook, global trade policies had been subject to frequent changes and the future direction for trade policy was highly uncertain. In this box, we outlined three illustrative scenarios to show the potential impact of higher US and global tariffs on UK output and inflation, highlighting the primary transmission channels and their probable effects.
There are signs that global economic integration has stalled in recent years on some measures and reversed on others. This box discussed the implications of integration for the economy and public finances.
The data available at the time of our March 2015 Economic and fiscal outlook showed the current account deficit had worsened to around 6 per cent of GDP in the third quarter of 2014, one of the largest quarterly deficits on record. Much of the recent deterioration was down to the income balance moving into deficit, the drivers of which were discussed in this box.
In the December 2014 Economic and fiscal outlook, we identified the adjustment in the euro area as a risk to our forecast. This box highlighted some of the key indicators that commentators were using to measure the progress of that rebalancing.
Spending on cars in the UK has grown strongly, accounting for nearly a third of household consumption growth since the third quarter of 2011. This growth was facilitated by car finance, which contributed to strong growth in unsecured credit. This box showed trends in domestic share of car production and contribution of domestic and imported cars to household consumption growth over time. Together, they showed that while domestic car consumption was a good indicator of consumer confidence, and car trade in isolation helped reduce the UK's trade deficit, the overall effect on the economy was less positive.
