No balance in the payments  

This week’s poor balance of payments figures for last month revealed two worrying facts. Despite the sharp falls in the pound, there has been no surge in exports to show us gaining market share as we become more price competitive. At the same time, imports have increased sharply as destocking ends, with no sign that UK industry is about to replace imports with home produced goods. Trade volumes both ways are up as the world economy recovers a bit, but there is no encouraging sign that we are about to improve our relative position. After a decline of almost one quarter in the currency, you would expect both a surge in exports and a lively increase in import substitution. The absence of both so far implies several problems. First, a lot of capacity was clearly lost in the recession. Factories were closed, people were made redundant. The last twelve years have seen...