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Ed Conway Profile picture
@EdConwaySky
Sep 30, 2020 • 12 tweets • 5 min read • Read on X
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Pointy-headed thread: Do you remember this tweet of mine from earlier this year? About how extraordinary flows of gold out of the UK are completely changing the picture of UK trade? Well, brief update: it's still happening. Big time.
In the past few quarters, the UK trade account has swung into positive territory for the first time since the 1990s. And not just positive territory: the biggest trade surplus EVER. £16.9bn in Q2 alone...
It's worth emphasising that even if you look at the trade balance as a % of GDP it's still one of the highest levels we've ever seen. Only one other quarter - Q1 1981 - had a higher surplus. And I don't think it's ever swung quite as dramatically as this...
And the story this time around - as last time around - comes largely back to gold. In the past year the amount of gold being "exported" from the UK has hit around £24bn. We "imported" about £15 billion of the stuff. This is totally unprecedented - and not a little odd
In fact if you were to count gold as a normal export it would be our third biggest export, just above pharmaceuticals (which we're a world leader in btw). But here's why I put it in inverted commas: it's not really an export. Indeed in most cases it doesn't even leave the country
London is the world's capital for the trade in physical gold. And when gold changes hands from a British owned institution or investor to a non-British one then that's counted as an export. Even though it usually doesn't even leave the vault!
How can we be sure this isn't gold leaving the country? Well for one thing these days the @bankofengland publishes data on how much gold it has in its vaults. And over this period it's actually risen a fair bit - the equivalent of £17bn or so bankofengland.co.uk/statistics/gold
I only mention all of this because this morning I found myself leafing through the ONS balance of payments data (as you do) and I struggled to make sense of it. Look: including gold the deficit is £2.8bn. Exclude gold and it's £12.1bn. That's a mind-boggling difference!
And unless I've missed something, save for that par 👆, @ONS still uses that distorted current account fig everywhere else. In its tables, its charts etc. That distorted figure is the one that'll go into IMF/OECD databases and be used to compare UK to other countries, I assume
I couldn't even find an official @ONS series for the underlying non-distorted current account, so I made one myself. It's the red line here. Black line is the "official figure". Yellow bars are the net balance of gold movements in and out of the UK which I've simply subtracted.
Why am I going on about this? Because the current account is one of the most important economic statistics. And thanks to the way we account for gold movements it's becoming a real mess. It is poss to adjust for this and the @ONS is trying hard but it's fighting an uphill battle
There are international statistical rules stipulating that we include these flows. So while @ONS includes plenty of small (and big) print, the official measures - the ones that most people pay attention to and are used for international comparisons - are increasingly meaningless.

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More from @EdConwaySky

Ed Conway Profile picture
Jul 20
🧵
80 years ago today, newspapers in Europe carried news of the unexpected death of a very important man, in a hotel miles from the nearest city.
A man who, said some, was helping the Allies win the war.
But there was a twist to the tale. The man in question wasn't actually dead Image
That man was John Maynard Keynes. The 61 year old economist was at the Mount Washington Hotel in New Hampshire for what became known as the Bretton Woods conference. And the day earlier he had indeed collapsed, following a heart attack. It was a moment of high drama. Image
The conference had already overrun.
It was supposed to be done in two weeks and there was talk that the delegates would soon be kicked out of the hotel. This was, to put it lightly, a problem.
After all, in the absence of an agreement there was a chance of yet another world war Image
Read 29 tweets
Ed Conway Profile picture
Jul 10
It says something about how confusing Labour's green investment policies are that seemingly even the Treasury has misunderstood them.
Contrary to what the picture in this press release👇 suggests, the National Wealth Fund has nothing to do with wind power or indeed green energy
Instead it's very specifically designed to focus on all the low or zero carbon technologies that AREN'T really to do with generating power.
- Green steel
- Hydrogen
- Clusters
- Gigafactories
Here's the sectors the institution will focus on 👇 Image
Simple way to think abt this:
Pretty much ALL heavy industry today emits carbon, directly or indirectly. The techniques we use to make stuff mostly date back to the industrial revolution. Getting to net zero involves redoing the industrial revolution! edconway.substack.com/p/yet-another-…
Read 7 tweets
Ed Conway Profile picture
Jul 5
🧵
How did Keir Starmer manage to win a landslide majority even though fewer people voted for him than for Jeremy Corbyn in either of his election bids?
A quick thread looking beneath the numbers.
Let’s start with swing…
Election nerds like to focus on two-party swing - essentially showing how voters shifted between the main parties.
And on this metric, Labour enjoyed a MASSIVE swing. 11%. Slightly more than Blair in 1997.
But there’s more to this chart than meets the eye… Image
Let’s take the same data, two-party swing, & break it down. Red bits of bars show change in Labour vote, blue bits show Tory change.
Now look again at that 2024 bar (on the far right).
The vast, vast majority of swing to Labour is in fact swing AWAY from the Conservatives. Image
Read 10 tweets
Ed Conway Profile picture
Jul 2
🧵THE STRANGE CASE OF THE YAKOV GAKKEL🧵
A thread about the energy story no-one wants to talk about.
About how UK companies are helping facilitate Russia, as it earns money to finance its war.
And about how the cost of living crisis didn't end quite how you prob thought it did…
But before all of that it's a story of a ship. A v unusual ship.
The Yakov Gakkel. A vessel that routinely passes these shores. As I type this it's somewhere north of Norway. But I first saw it in the English Channel.
And at first glance you might not think it all that special.. Image
But beneath that enormous blue hull is some incredibly advanced technology. Because the Yakov Gakkel is a cutting edge liquefied natural gas tanker, capable of holding vast amounts of natural gas at temperatures of approximately −163 °C.
These things are pretty incredible! Image
Read 21 tweets
Ed Conway Profile picture
Jul 1
🧵You know the idea, posited by @theIFS, that the main parties are engaged in a "conspiracy of silence" this election.
Their original point was about spending plans.
But I think you cld go much further.
I can think of at least 5 other areas where there's a conspiracy of silence
1⃣Taxes ARE going up under all the main parties' plans.
But they prefer not to talk about this, hiding instead behind the claim that tax rates on income tax, NICs and VAT won't rise. But they've still signed up to plans which will mean the AMOUNT of taxes we're paying will rise. Image
2⃣The magical tax avoidance money tree.
All the parties think they'll raise enormous sums clamping down on tax avoidance.
So much that they need not raise other taxes. This is v uncertain. But since they've all done the same trick they remain silent about its ridiculousness
Read 7 tweets
Ed Conway Profile picture
Jun 23
🧵
You've probably heard this claim - both from @rishisunak and more recently from @Nigel_Farage 👇
UK has leapfrogged others to become the world's fourth biggest exporter! And all after Brexit!
Unfortunately the reality is somewhat less impressive than this sounds.
Here's why: Image
First thing to say is that the bare bones of the claim are certainly true.
Between 2021 and 2022 the UK did indeed rise from 7th in the league table of the world's biggest exporters (counting both goods and services) to 4th.
We'll get to why this happened in a moment. But still Image
However here's some (very) important context.
It's not like the UK has only JUST hit fourth spot. In fact, it was in 4th place in 2020. And in 2015, 2014 and 2013.
Actually if you look at the modal average of our position in the past decade it was... fourth. Image
Read 12 tweets

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