Current account gap at 24-year high

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Britain’s current account deficit ballooned to its widest since 1989 in the third quarter, suggesting its strong recovery is vulnerable to weak growth overseas and highlighting concerns that the economy remains unbalanced.

Data yesterday showed growth earlier this year and in 2012 had been stronger than previously thought, pushing up the annual growth rate to 1.9 per cent in the June-September period from an earlier estimate of 1.5 per cent.

Gross domestic product rose 0.8 per cent from the preceding three months, in line with previous estimates, the Office for National Statistics said.

Figures yesterday nevertheless showed the government borrowed more in November than in the same month last year. Britain has been one of the global economy’s surprise success stories this year, turning itself from a laggard to one of the fastest-growing industrialised nations, with particularly strong jobs growth.

However, it is still catching up with rather than outperforming other big economies which suffered similar sharp falls in output due to the 2008 financial crisis.