In economic and financial terms, the last two years have been unlike anything I've seen in my life - medically-induced economic comas, massive fiscal deficit financed by equally massive monetary creation which has distorted financial asset prices beyond anything the global economy can justify.
At the root of all this are patterns of spending, saving and investment. And you can tell a lot about them from movements in country's current accounts.
You've got to treat UK trade numbers with caution, because there's a persistent track record of them being revised, often quite dramatically. We had this again today, when the current account deficit for the first half of the year was revised from £17.4bn to £24.8bn - that's £7.4bn worse than previously reported.
With that caveat, the 3Q deficit was reported at £24.4bn, up £11bn on the quarter, and equivalent to 4.2% of GDP. Strip out the volatile trade in precious metals, the deficit was up £6.7bn to £21.7bn, or 3.7% of GDP.
Where does that say about the UK's savings patterns? Well, the public sector had a deficit of £41.4bn during the quarter, so strip that out, and that leaves the private sector making net savings of £16.9bn. That's down £29.8bn qoq, and down nearly £50bn yoy. My bet is the bulk of savings remaining are corporate profits.
Overall, for the 12m, it means the UK is running a current account deficit of 3.3% of GDP (compared with an average since 2008 of 3.7%), with public sector borrowing of 9.1% of GDP, and a private savings surplus of 5.8% of GDP. In short, still a long way from anything approaching pre-covid 'normality'. That delayed encounter with normality will surely have to happen sometime, in the UK and elsewhere, and maybe it will become unavoidable in 2022?
