Tue 30 Jan 2018, 11:02 AM | Posted by editor
Economists have often complained about the economic data that comes out of the Chinese economy. The allegation is that much of the data is inaccurate, or even made-up. They argue that it is not possible to say with any real accuracy, whether the Chinese economy is growing, say, at 5 per cent or 6 per cent a year.
But never mind the Chinese. Recent analysis by the Office for National Statistics suggests that much of British economic data is also badly skew-whiff. The ONS has made some detailed studies, in collaboration with its Irish and US equivalent organisations, of economic data measuring the British balance of trade in services. It is possible to check British exports to the USA, for example, by looking at what data the US has for British-sourced imports, and vice-versa. These studies have come up with some surprising findings, not so much in trade in goods as for in trade in services like tourism, financial services, intellectual property, and so on.
The gist of the findings are that the much-vaunted British surplus in trade in services – desperately needed to (partially) make up for a huge deficit in traded goods – might not be as big as we are cracking it up to be, and might even be in deficit. Just to give an example, in 2016, the British economy registered a £22.5 bn surplus in services with the USA. According to the US data, however, Britain had a £10.4bn deficit in trade in services. Some difference. What else is the data covering up about the parlous state of British capitalism?
