Notable events in 1697:
* Peter the Great sets out to travel in Europe officially incognito as “Artilleryman Pjotr Mikhailov”.
* The Spanish conquest of the Yucatan is complete with the fall of the Itza Kingdom.
* Battle of Zenta: Prince Eugene of Savoy crushes the Ottoman army of Mustafa II.
* The use of palanquins increases in Europe.
* Britain starts recording trade data.The UK trade data for November has just come through and it’s not looking pretty. In fact, it’s looking like the biggest deficit since records began back in 1697 according to Reuters. From the Office for National Statistics:
The UK’s deficit on trade in goods and services was £4.5 billion in November, compared with the deficit of £3.9 billion in October.
The deficit on trade in goods was £8.3 billion, compared with the deficit of £7.6 billion in October.
Excluding oil and erratic items, the volume of exports was seven per cent lower and imports were a half per cent lower in November than in October.
So, we’d guess the government’s attempt to competitively devalue sterling and thereby boost the economy isn’t working.
JP Morgan economist Allan Monks, for one, seems to agree with us:
Prior to this report, the rapid depreciation in the currency had shown little evidence of lifting goods export volumes, with manufacturers opting to boost margins rather than market share. And despite the ongoing slide in sterling towards the end of last year, exports continued to fall sharply in November. The widening in the core goods trade deficit came from a sharp 6.8%m/m, sa decline in core export volumes in comparison to a more modest 0.7% drop in imports. Though we know little about how the rest of the demand side evolved in 4Q, this likely explains at least part of the sharp decline in manufacturing output seen in 4Q (chart).
1697, incidentally, was also the height of mercantilist thought — the rather protectionist economic theory where having a favourable balance of trade was the ultimate end of the State.
Coincidence? We think not.
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Related links:
Talking down sterling – FT Alphaville