Last week’s National Accounts showed that the economic recovery had plenty of wind in its sails in the fourth quarter. However, there remains one cloud hanging over the recovery which has yet to be blown away; namely, the current account deficit.
Whilst there are still reasons to be optimistic that the deficit will be eroded in time, it is perhaps one of the more significant risks to the UK’s growth outlook. Indeed, a messy election outcome, or concerns about the UK’s membership of the European Union, are just two possible triggers which could see investors running scared in the near term.
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