You can change your cookie settings at any time. Balances between inward and outward transactions, providing a net flow of transactions between UK residents and the rest of the world and reports on how that flow is funded. This is the latest release. View previous releases. Contact: Email Jamie Pritchard. Release date: 29 October Next release: To be announced.
Print this Statistical bulletin. Download as PDF. The coronavirus COVID pandemic has had wide-ranging impacts on the UK's international transactions with the rest of the world, including on trade, investment income and financial flows. The current account records international trade, cross-border income that is associated with the international ownership of financial assets, and current transfers for example, foreign aid or remittances. It captures the flow of transactions between the UK and the rest of the world.
Trade and investment income flows typically tend to explain movements in the UK's current account balance:. The coronavirus COVID pandemic has had wide-ranging impacts on the UK's international transactions with the rest of the world, including on gross and net transactions.
This reflects the effects of public health restrictions that have been in place around the world throughout The trade balance moved from a deficit of 0. The secondary income deficit increased from 1.
Figure 1: The coronavirus pandemic has led to large movements in trade and investment income flows Contributions to the change in the UK current account balance as a percentage of GDP, to Source: Office for National Statistics — Balance of Payments Download this chart Figure 1: The coronavirus pandemic has led to large movements in trade and investment income flows Image.
The UK recorded the second largest current account deficit, 2. The United States recorded the largest deficit, 2. There was a marked widening in the current account deficit in France from 0.
While Germany remains in a current account surplus, saw the lowest surplus, 6. The coronavirus COVID pandemic has had significant impacts on gross trade flows in , reflecting how the effects of public health restrictions have impacted upon domestic and foreign demand. There have also been impacts on global supply chains, which have likely had an adverse impact on trade flows.
The UK trade balance moved from a deficit of 0. The decline in gross UK trade because of the coronavirus pandemic has been significantly larger than the decline because of the global financial crisis of to Figure 3. It is also the case that there has been a relatively larger impact on services trade in the pandemic as imports declined by This is particularly the case for those services which are most dependent upon personnel who travel abroad to provide a service and consumers who travel to another country to purchase a service.
Figure 3: The coronavirus pandemic had a large impact on UK trade flows Total trade difference year on year, by percentage, to Source: Office for National Statistics — Balance of Payments Download this chart Figure 3: The coronavirus pandemic had a large impact on UK trade flows Image. Some of the main contributors to the slight narrowing in the trade in goods deficit Figure 4 were:. Figure 4: There have been movements in the net trade of semi-manufactured goods and oil Contributions to the trade in goods balance by commodity, to Source: Office for National Statistics — Balance of Payments Download this chart Figure 4: There have been movements in the net trade of semi-manufactured goods and oil Image.
With the national lockdowns imposed by the UK government through , temporarily closing some manufacturing sites across the country, UK production was impacted, and the amount of goods produced for export by UK manufacturers rapidly declined.
In the height of the first lockdown in April the Society of Motor Manufacturers and traders reported British car production down by This primarily reflected the restrictions placed on mobility, travel and transportation, leading to a sharp fall in the demand for oil. Figure 5: The pandemic led to large falls in the gross trade of finished manufactured goods and oil Contributions to the annual change in goods, by goods type, in Source: Office for National Statistics — Balance of Payments Download this chart Figure 5: The pandemic led to large falls in the gross trade of finished manufactured goods and oil Image.
Use our map to get a better understanding of what goods the UK traded with a particular country. Select a country by hovering over it or using the drop-down menu. Download the data. For more information about our methods and how we compile these statistics, please see Trade in goods, country-by-commodity experimental data: to Users should note that the data published alongside this release are no longer experimental.
These data are our best estimate of these bilateral UK trade flows. Users should note that alternative estimates are available, in some cases, via the statistical agencies for bilateral countries or through central databases such as UN Comtrade. This interactive map denotes country boundaries in accordance with international statistical classifications set out within Appendix 4 of the Balance of Payments BoP Vademecum PDF, 1.
Some of the main contributors to the increased surplus Figure 6 were:. Figure 6: The trade in services surplus increased in as imports decreased by more than exports Contributions to the trade in services balance by service type, to Source: Office for National Statistics — Balance of Payments Download this chart Figure 6: The trade in services surplus increased in as imports decreased by more than exports Image. Travel services saw the largest fall in gross trade flows in The national lockdowns, quarantine regulations and severe travel restrictions that were in place across the globe provide an explanation for the significant fall in international travel.
Transportation services also experienced significant falls over the year, particularly in sea and air transport. Restrictions on movement and travel bans imposed through the public health policy response of the UK and its trading partners explains the observed decline, causing planes to be grounded at airports and ships to remain in port around the world. The larger impact of the pandemic on trade in services compared with trade in goods observed in the UK is consistent with international analysis.
The value of exports of services in OECD countries declined in by Figure 7: There was an unprecedented decline in the trade of travel services Contributions to the annual change in the trade in services imports and exports, by service type, in Source: Office for National Statistics — Balance of Payments Download this chart Figure 7: There was an unprecedented decline in the trade of travel services Image.
Figure 8: There was a fall in the inflows and outflows of investment income in in response to the coronavirus pandemic Breakdown of UK primary income balance, as a percentage of nominal GDP, Source: Office for National Statistics — Balance of Payments Download this chart Figure 8: There was a fall in the inflows and outflows of investment income in in response to the coronavirus pandemic Image.
Interest rates were lowered across many countries in as part of monetary stimulus packages in response to the economic downturn, which could explain the falls in earnings on direct investment. It may also reflect how businesses aimed to maintain cash buffers by reducing dividend payments to their investors.
There was a fall in portfolio investment income flows in , particularly on those investments held by foreign investors in the UK. This decline is largely because of lockdown restrictions imposed as part of the government's pandemic response package adversely impacting corporation profits.
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This is not the latest release. View latest release. Contact: Email Jamie Pritchard. Release date: 30 October Next release: To be announced.
Print this Statistical bulletin. Download as PDF. The UK current account deficit widened to 4. The primary income deficit widened to 1. The total trade deficit expanded slightly to 1. The categorical breakdown of the current account is used to better understand the flow of transactions between the UK and the rest of the world.
Figure 1 focuses on the following three categories:. The UK's current account deficit widened from 3. Another contributing factor to the expanding current account deficit was the slight widening to the trade balance, from 1.
The secondary income balance remained consistent with the previous year at a deficit of 1. Figure 1: Current account deficit widens as the deficits on primary income and total trade deteriorate Contributions to the change in the UK current account balance as a percentage of nominal GDP, to Source: Office for National Statistics — Balance of Payments Download this chart Figure 1: Current account deficit widens as the deficits on primary income and total trade deteriorate Image.
Since , the secondary income balance has remained at a consistent deficit between negative 1. Over the same period, primary income and trade balance movements have been more varied and so tend to play a larger role on current account movements. The UK continued to record the largest current account deficit of the developed economies in the G7 in , with the United States and then Canada recording the next largest deficits, as shown in Figure 2. Germany, with its manufacture-based economy continued to record a sizeable surplus equivalent to 7.
Figure 2: The UK continues to run the largest current account deficit as a percentage of nominal gross domestic product in the G7 Current account balances of the G7 economies , as a percentage of nominal gross domestic product Source: Office for National Statistics and Organisation for Economic Co-operation and Development Download this chart Figure 2: The UK continues to run the largest current account deficit as a percentage of nominal gross domestic product in the G7 Image.
The total trade deficit the difference between exports and imports widened to 1. The widening of the trade deficit was because of a larger contraction of the trade in services surplus than the trade in goods deficit. The trade in services surplus narrowed from 5.
This is the lowest since when it was 5. Figure 3: The total trade deficit widened in as the services surplus and goods deficit decreased UK trade balance as a percentage of nominal GDP, by trade type, to Source: Office for National Statistics — Balance of Payments Download this chart Figure 3: The total trade deficit widened in as the services surplus and goods deficit decreased Image.
Some of the main contributors to the changing deficit were:. Figure 4: Narrowing deficits on finished manufactured goods and other fuels improved the trade in goods deficit in Contributions to the trade in goods balance by commodity, to Source: Office for National Statistics — Balance of Payments Download this chart Figure 4: Narrowing deficits on finished manufactured goods and other fuels improved the trade in goods deficit in Image.
Some of the main contributors to the increase were:. Use our map to get a better understanding of what goods the UK traded with a particular country. Select a country by hovering over it or using the drop-down menu. Download the data. You can also explore the trade in goods data by commodity, for example, car exports to the EU and UK tea or coffee imports. Some of the main contributors to the narrowing surplus were:.
Imports of services from France, Luxembourg, Spain and Sweden accounted for much of the increase. Figure 5: The trade in services surplus narrowed in as imports increased substantially more than exports Contributions to the trade in services balance by service type, to Source: Office for National Statistics — Balance of Payments Download this chart Figure 5: The trade in services surplus narrowed in as imports increased substantially more than exports Image. Figure 6: Declines in telecommunication and financial services partially offset the increases experienced in other business, transport and travel services in Contributions to the annual change in the trade in services exports in , by service type Source: Office for National Statistics — Balance of Payments Download this chart Figure 6: Declines in telecommunication and financial services partially offset the increases experienced in other business, transport and travel services in Image.
Figure 7: The majority of services contributed to the large increase in the import of services particularly other business services Contributions to the annual change in the trade in services imports in , by service type Source: Office for National Statistics — Balance of Payments Download this chart Figure 7: The majority of services contributed to the large increase in the import of services particularly other business services Image. FDI has been the only functional category to have consistently run a surplus and provided a positive impact to the primary income balance, as shown in Figure 8.
Figure 8: Increasing deficits on portfolio investment and other investment widen the primary income deficit in Breakdown of UK primary income balance, as a percentage of nominal gross domestic product, to Source: Office for National Statistics — Balance of Payments Download this chart Figure 8: Increasing deficits on portfolio investment and other investment widen the primary income deficit in Image.
We can analyse investment performance from the point of view of rates of return. The rates of return for both investments in the UK and those abroad reduced slightly in , as shown in Figure 9. The rates of return earned on investments in the UK decreased from 2.
Figure 9: The rate of return earned on investments by non-residents in the UK continued to outperform those earned by UK residents overseas in Rate of return: UK assets and liabilities, percentage, to Source: Office for National Statistics — Balance of Payments Notes: Rates of return are estimated for direct investment, portfolio investment and other investment only.
Rates of return are calculated using the average of opening and closing stock positions. Download this chart Figure 9: The rate of return earned on investments by non-residents in the UK continued to outperform those earned by UK residents overseas in Image.
The value of FDI credits and debits both decreased in compared with This was the largest decrease in the FDI debits data series, which started in on a consistent basis. Earnings on FDI are an important component of the current account, influencing the balance of payments.
As Figure 10 showed, FDI has positively contributed to the UK current account balance since consistent estimates began. Part of the movement in the FDI surplus has been because of non-residents consistently acquiring UK businesses from and building their investment in the UK Figure A larger stock position should, if all else is equal, lead to larger earnings and hence the narrowing of the surplus from to
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