Mr Major’s Parliamentary Answer on Balance of Payments – 26 January 1989

Below is the text of Mr Major’s response on Balance of Payments, made on 26th January 1989 in the House of Commons.

Mr. McLeish To ask the Chancellor of the Exchequer if he will state the current balance of payments as a proportion of gross domestic product.

Dr. Godman To ask the Chancellor of the Exchequer what is the current balance of payments as a proportion of gross domestic product.

Mr. Tom Clarke To ask the Chancellor of the Exchequer if he will state the current balance of payments as a proportion of gross domestic profit.

Mr. Major In the latest 12 months for which figures are available the current account deficit as a proportion of gross domestic product was 2½ per cent.

Mr. Strang To ask the Chancellor of the Exchequer if he will list his policies which are aimed at reducing the balance of payments deficit; and if he will make a statement.

Mr. Major The rise in the current account deficit has primarily reflected the strength of domestic demand. The Government responded appropriately by tightening monetary policy and the effects of this are already beginning to bite, particularly in the housing market and in the retail sector. However, as my right hon. Friend the Chancellor has made clear, the current account deficit is likely to be one of the last indicators to respond.

Mr. Battle To ask the Chancellor of the Exchequer if he will give his latest forecast for the United Kingdom’s balance of payments.

Mr. Cohen To ask the Chancellor of the Exchequer if he will give his latest forecast for the United Kingdom’s balance of payments.

Mr. McFall To ask the Chancellor of the Exchequer if he will give his latest forecast for the United Kingdom’s balance of payments.

Mr. Major The Autumn Statement forecast a current account deficit this year of £11 billion. There will be a new forecast published on Budget day in the usual way.