The Great Debate UK
By Ian Campbell
LONDON, April 13 (Reuters Breakingviews) – Gordon Brown says his Labour party will “secure the recovery” if it wins the UK election in May. The opposition Conservatives would kill the upturn, he says. Brown is right in one sense: the “recovery” can easily be broken. But only because it is so fragile in the first place.
The UK’s data looks more encouraging than it actually is. The UK needs exports and production to surge ahead. Trade figures released on April 13 might appear to herald that: February’s trade deficit was its smallest since June 2006.
But comparing the past three months with the three preceding months, the UK’s export volumes are up by a timid 1.5 percent, while imports rose by 3.8 percent. The UK needs an export charge. It simply hasn’t got one yet — in spite of the much weaker pound.
What the UK has had is a sustained charge in fiscal spending. The UK’s old stalwart, house prices, joined the advance last year. But here, the signs are turning down again. House prices in England and Wales rose at their slowest rate in March since last July, according to the Royal Institution of Chartered Surveyors.