UK current account deficit should "ring alarm bells" for the UK

Emma Haslett
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The current account deficit failed to meet analyst expectations (Source: Getty)

The UK's current account deficit should ring an "alarm bell" for the UK, the British Chambers of Commerce (BCC) said today, after official figures showed the deficit was £26.5bn in the first quarter of the year.

The figure - a measure of the UK's success in exports - has narrowed from last year's £28.9bn - but still failed to meet analyst expectations of £23.8bn.

The deficit made up 5.8 per cent of UK GDP, down from 6.4 per cent last quarter.

The BCC said the deficit was "as big of a risk to the UK's future prosperity as the Eurozone crisis or other international shocks".

"Although business people and the Bank of England keenly understand the risk that an unsustainable current account deficit presents, successive governments have failed to treat it with the seriousness it deserves," said John Longworth, the BCC's director general.

"The size and persistence of the UK's current account deficit make us hugely vulnerable to external shocks, unexpected shifts in market sentiment, and unwelcome downgrades to our credit rating."

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