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UK trade deficit wider on illegal drug imports - ONS

Published 17/09/2014, 21:38
UK trade deficit wider on illegal drug imports - ONS

LONDON (Reuters) - Britain's trade deficit widened by 4 billion pounds due to imports of illegal drugs in 2012, equivalent to more than 10 percent of the country's trade shortfall that year, according to new figures from the Office for National Statistics.

The ONS is revamping how it calculates the size of Britain's economy and the way it measures British trade, bringing them into line with the latest international standards.

It published new estimates of British trade data for 2010 to 2012. The latest revisions show little change to Britain's overall trade deficit in 2012 which is now estimated at 34 billion pounds ($55.5 billion) rather than 33 billion as previously thought.

But there are some big changes behind the headline number.

As Britain now measures illegal drugs activity in its national accounts, Wednesday's ONS report showed the import of drugs increased Britain's trade deficit by 4 billion pounds - more than a tenth of the total.

Remote gambling also increased the trade deficit in 2012 by 2 billion pounds, the ONS said.

However, these revisions were offset by new incoming data for the 2012 trade balance.

The ONS said earlier this month that Britain's economy has grown at a stronger rate than previously estimated over the last few years because of the new changes to the way it measures economic output.

These changes have led to some eye-catching findings.

Illegal drugs and prostitution have probably added around 10 billion pounds to Britain's economic activity each year - or about 1 percent of total economic output.

© Reuters. Cocaine from Britain's largest ever cocaine seizure is displayed by UK Border Agency staff in London

As there is little data on drugs and especially prostitution available, the ONS has said its calculations will require a number of assumptions, based on various international and government research.

(Reporting by Andy Bruce; Editing by William Schomberg and Hugh Lawson)

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