The current account
The current account records flows between a country and the rest of the world in terms of payments for goods and services, income flows relating to the international ownership of financial assets, and current transfers between UK residents and non-residents. The current account balance is an indicator of whether an economy is a net lender to, or borrower from the rest of the world.
The overall balance for the 3rd quarter of 2018 in terms of the deficit or surplus as a % of GDP was 4.9%.
The Current Account 2000 to 2018 as a % of GDP
Trade balance, 1997 to 2019 (£bn)
Balance with EU and non-EU countries
The UK’s defict with the EU in the second quarter of 2018 stood at £26 billion compared with a surplus of £6.0 billion with non-EU countries.
The UK’s current account deficit in the 3rd Quarter of 2016 (July – September) was £25.5 billion, which equated to 5.2% of GDP, up from 4.6% in Q2. The increase in the deficit was largely due to a weakening trade account, specifically an increase in the goods deficit. This was partly offset by an increasing surplus on the services. The financial account saw a net inflow on £22.6 billion.
The UK’s current account deficit was £17.5 billion in the third quarter of 2015. The deficit was equal to 3.7% of GDP, which was slightly down from the previous quarter.
The latest statistics released by the ONS reveal that the UK’s deficit on the current account balance, in percentage terms, increased in the fourth quarter of 2014 to 6.2%, the highest on record.
The figures show that the trade in goods deficit, caused largely by a deficit on manufactured goods, was partly offset by improvements in the balance on oil and semi-manufactured goods. There was also a deficit on transfers (secondary income). The financial account, which partly offsets the current account, recorded a net inflow of £62.6 billion compared with a net inflow of £49.1 billion in 2012.
See more on the current account