Diary Day 327: we are not in sunny uplands. The service sector appears to have slowed. What Lord Heseltine said. 

My # Remainer’s Diary Day 327: I spent time poring over new bulletins from the Office for National Statistics. It helpfully provides a list of main points. On UK trade, June 2017, the main points included these: 

  • Between Quarter 1 2017 and Quarter 2 2017, the total trade deficit (goods and services) widened by £0.1bn to £8.9bn.
  • The UK’s total trade deficit (goods and services) widened by £2bn between May and June 2017 to £4.6bn, due to increases in imports of both goods and services.
  • Comparing Quarter 2 2017 with Quarter 2 2016, UK goods export and import prices rose by 8.2% and 7.8% respectively and sterling depreciated 8.7% over the same period.
  • Despite higher trade prices and weaker sterling, there were similar increases in export and import volumes of goods, by 5.0% and 4.8% respectively, in Quarter 2 2017 compared with Quarter 2 2016. 

The ONS also produced its index of production for June 2017 and highlighted these main points: 

  • In Quarter 2 2017, the index was estimated to have decreased by 0.4% compared with the previous 3 months, due mainly to a fall of 0.6% in manufacturing.
  • The largest contribution to that fall in manufacturing came from transport equipment, which fell by 2.2%. 
  • In June 2017, total production was estimated to have increased by 0.5% compared with May 2017, due mainly to higher oil and gas production.
  • Manufacturing monthly growth was flat in June 2017; the largest downward contribution came from transport equipment, which fell by 3.6%, partially offset by an increase of 4.0% in other manufacturing and repair.
  • Total production output for June 2017 compared with June 2016 increased by 0.3%, with manufacturing providing the largest upward contribution, increasing by 0.6%; energy supply partially offset the increase in total production, decreasing by 4.6% due largely to warmer temperatures.

There was a bulletin on construction too. It was not cheery. 

A table of short-term indicators was published as well. Deputy National Statistician Jonathan Athow commented: 

“Manufacturing has been broadly flat with recent falls due to dropping car production offsetting growth earlier this year. On the other hand, oil production increased as the usual summer maintenance shutdowns failed to materialise.

“Construction again declined after a strong start to the year with public and commercial building and repair work all falling.

“Meanwhile, the UK’s trade balance was little changed in the second quarter with the import and export of chemicals and services all increasing.” 

There were scathing comments in the FT on the spin put on reporting of this news by the Telegraph and by Brexit buffs. One commentator, going by the name VanHaarlem, wrote that the supposed boost from a rock bottom sterling had led to the biggest trade deficit in eight months. “Brexit sunny uplands, the biggest farce in a generation.” 

The National Institute of Economic and Social Research (NIESR) published its monthly estimate of GDP growth. Amit Kara, Head of UK Macroeconomic Forecasting at NIESR, said: “We estimate that economic growth decelerated to 0.2 per cent in the three months to July, compared with 0.3 per cent in the second quarter of 2017. The service sector, which was the main driver for economic growth in the second quarter, appears to have slowed.” 

That doesn’t seem like a sunny upland either. 

Lord Heseltine, who was sacked from an advisory post by Theresa May in March, gave an interview on the political situation to Business Insider and said: “It’s an unprecedented situation… Brexit is trans-party. It means a long period of uncertainty and all the adverse consequences that flow from that.”

He says Boris Johnson, David Davis, and Liam Fox are “the right people to prove the job can’t be done… It was the only political answer I could see — to let the Brexiteers prove that their policies work. Patently they don’t. There are no policies.

“They are just floundering along and I’m afraid, they must be allowed to continue to do that until the public opinion gets the message. It’s an impossible task, there is no upside to this negotiation.” 

He said: “Public opinion will become disenchanted and Parliament may not be prepared to support Brexit. These are very difficult predictions and I don’t give any degree of certainty to them, but I do detect that opinion is moving.

“People who were certain are now talking about a growing period of transition. A concluded agreement with a transitional arrangement would leave the thing for grabs in a general election campaign.” 

So uncertainty is growing but precious little else. 

One thought on “Diary Day 327: we are not in sunny uplands. The service sector appears to have slowed. What Lord Heseltine said. 

  1. I think that the penny has dropped. A cynical genius is at large in the PMs office advising her on all of the wrong decisions. Everything, everything, that the Tories have tried to do has been a disaster and I would agree with Heseltine that the choice of Davis, Fox and Johnson was definitely inspired … by a remainer, maybe.

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