An unusual anomaly in gold exports from the UK has triggered what one Conservative MP called a ‘record breaking year for UK exports’, though the reality appears to be somewhat different.
Liz Truss, MP for South West Norfolk and Minister for Women and Equalities tweeted the following on Tuesday:
📢Record breaking year for UK exports.
— Liz Truss (@trussliz) February 11, 2020
New @ONS data out today shows that in 2019…
💼UK businesses exported £689.0 bn of goods and services
⬆This is a 5.0% increase on 2018
📈Exports of goods to non-EU countries grew by 13.6%https://t.co/YRerqQGXw7
The data refers to the fact that, in two-month periods, the UK has had near-zero exports of gold for the past 20 years, with a rough average figure of around £126 million (not a small sum, but in an economy of billions…). In November & December last year however, this figure rose to £12 billion. As Ed Conway, the Economics Editor for Sky News, flagged up in his Twitter thread about the topic, this is a sum larger than the GDP of Jamaica.
Concerns have arisen this week over the figures due to their impact on the UK’s trade balance, which for the first time on record is in surplus. The reality is that it isn’t, because London is one of the main gold markets in the world and trading is to be expected in the city.
Conway highlighted Ms Truss’ tweet as an example of misreading the statistics:
Every bullet point in her tweet is wrong if you strip out gold exports:
— Ed Conway (@EdConwaySky) February 14, 2020
💼UK biz exported £674bn of goods & services (not £689)
⬆A 2.9% increase on 2018 (lowest since 2016; not 5.0%)
📈We don't know how much exports to non-EU countries rose; @ONS hasn't worked them out ex-gold
The big question is who has ‘exported’ this gold? Central bank gold, such as holdings at the Bank of England for Poland and Romania, do not count in the export statistics, so this must be a private transaction. Conway’s guess is that its unallocated gold becoming allocated and, given the quantity and valuation, it probably belongs to an international bank. This would mean no gold has actually been exported, but rather the documentation of said gold was amended on a spreadsheet.
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