What Might Be Driving the Need to Rebalance in the United Kingdom?

Abstract

Low national saving, a persistent current account deficit and the rapid expansion of balance sheets are potential reasons why the UK economy needs to rebalance. Global factors are likely to have been an important driver of these developments, but domestic factors have played an important role in the longer-term trends. This article looks at how the potential drivers of the need for rebalancing have evolved and how they fit together.