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UK gets record tourists; record goods deficit too

Tuesday, October 10, 2017 - 01:48

British factories had their strongest two months of 2017 in July and August, suggesting the Bank of England remains on track to raise interest rates soon, but the deficit in trade in goods hit an all-time high. And, as David Pollard reports, Britain's economy remained in a low gear in the third quarter after suffering its slowest first half to the year since 2012.

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Landmark London: it's a big draw but its attractions aren't the only reason for record numbers of visitors to the UK. 23 million came in the first six months of the year - up eight per cent ... That number could be close to 40 million by year end. With spending on track to 26 billion pounds - a rise of 14 per cent. As they take advantage of a Brexit battered currency. (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "The tourist question is very much allied to the weakness of sterling. It has certainly attracted a lot more people and it's also incidentally seen a rise in the so-called staycation in the UK rather than going to more expensive climes abroad." The day also gave other reasons to wave the flag. In July and August, British factories had their best months this year - manufacturing up 0.4 per cent in both. September retail sales defied a downturn in consumer confidence ... With a rise of 1.9 per cent, according to other data. Though much of that reflects higher prices - for food and clothing. (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "What's tending to filter through in terms of the UK economy it appears is that consumers are spending on essential items and pretty much giving big-ticket items a wide berth." Which could raise some question marks over the view that the Bank of England will raise rates at its November meeting. (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "The Bank of England is in a difficult situation .... I think all things considered a rate hike." Exports one sector that doesn't appear to be gaining significantly from a weak pound. In August, up just 0.7 per cent - imports jumped 4.2 per cent. Leaving a goods trade deficit of over 14 billion pounds - an all-time high.