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The UK economy demonstrated significant growth in the last quarter of 2015. However, there was a growth of payment deficit to its anti-record. This may cause in its turn new growth of concerns over UK economy’s dependence on foreign investments on the eve of referendum in June.
According to report released on Thursday, UK GDP rose by 0.6% in Q4 and it is a final assessment. Annual growth was fixed at 2.4%. Preliminary data showed growth of GDP by 0.5 QoQ and by 1.9% YoY.
Better revision of this index was mainly due to strong fall of industrial production against preliminary assessment and higher services indices. Besides, there was fixed a growth of government and private spending, which helped to level negative impact from weak non-domestic trading.
Annual GDP in 2015 was revised up to 2.3%, up by 0.1% from the previous assessment.
However, there is a serious problem with payment deficit which reflects a difference between non-domestic earnings of the country and payments for non-residents. Level of this indicator rose to 32.7 billion pounds in Q4, up from 20.1 billion pounds in Q3. Current deficit has taken around 7% of total government earning, reaching its maximum since 1955.
Growing deficit means the UK will be forced to take foreign borrowings or involve new foreign investors to cover non-domestic debt. However, it is hard to attract investors because of forthcoming referendum that does not contribute to free investments in British economy. Supporters of Brexit think that current concerns are overestimated and the UK will cover the whole debt.