Balance of payments, UK: October to December 2024

• The underlying UK current account deficit excluding precious metals widened to £18.7 billion, or 2.6% of gross domestic product (GDP), in Quarter 4 (Oct to Dec) 2024; this is a change of £4.3 billion from the revised deficit of £14.5 billion for the previous quarter.

• The UK current account deficit, when trade in precious metals is included, expanded by £8.5 billion to £21.0 billion, or 2.9% of GDP in Quarter 4 2024.

• The total trade deficit, excluding precious metals, expanded to £10.2 billion from a revised £6.0 billion in the previous quarter, as the goods deficit widened to £59.5 billion, and the services surplus increased to £49.3 billion.

• The primary income account deficit narrowed to £3.5 billion, or 0.5% of GDP in Quarter 4 2024.

• There was a net financial inflow of £11.1 billion in Quarter 4 2024; portfolio investment moved to a net inflow and other investment moved to a net outflow.

• The preliminary estimate of the UK’s net international investment liability position on 31 December 2024 narrowed to £280.1 billion from £397.9 billion (revised from £836.7 billion) as of 30 September 2024.

• Data for all quarters from the start of 2023 have been open to revision in this release; the main revisions to the balance of payments (BoP) data are from incorporating corrected trade in goods and services data and estimates of improved quality from the FDI survey data.

FDI-related estimates

Following a temporary pause to full processing of Foreign Direct Investment (FDI) survey data, we have updated FDI-related estimates for all quarters in 2023 and Quarter 1 (Jan to Mar) 2024 based on fully processed survey data. However, FDI-related estimates from Quarter 2 (Apr to June) 2024 onwards remain subject to more uncertainty than usual, and users should be cautious when interpreting recent FDI data in the balance of payments (BoP) statistics.

Timing for incorporating revised estimates for each period will be in line with the latest National Accounts Revisions Policy. Revised estimates for all periods from 2021 will be completed in the 2025 edition of Pink Book and Blue Book. For more information about these periods, including pre-2023, see the subsection "Uncertainty around estimates in FDI survey data" in Section 8: Data sources and quality.

The UK’s current account balance is a measure of the country’s balance of payments (BoP) with the rest of the world in trade, primary income, and secondary income.

The underlying UK current account deficit excluding precious metals widened to £18.7 billion, or 2.6% of gross domestic product (GDP), in Quarter 4 (Oct to Dec) 2024; this is a change of £4.3 billion from the previous quarter when the deficit was £14.5 billion (revised from £20.0 billion).

Table 1 summarises the latest current account data for Quarter 4 2024.

Notes:

1. Sum of components may not sum to total because of rounding.
2. Current account and trade figures exclude trade in precious metals.
3. Foreign Direct Investment (FDI)-related estimates from Quarter 2 (Apr to June) 2024 onwards are subject to more uncertainty than usual, and users should be cautious when interpreting recent FDI data in the balance of payments (BoP) statistics. For more detail see the subsection "Uncertainty around estimates in FDI survey data" in Section 8: Data sources and quality.

Trade

The total trade deficit for goods and services increased to £10.2 billion, or 1.4% of GDP, in Quarter 4 2024. This was an increase from a revised £6.0 billion, or 0.8% of GDP in Quarter 3 (July to Sept) 2024. For more details of revisions to previous estimates, see Section 5: Revisions.

The trade in goods deficit increased by £4.8 billion from the previous quarter to £59.5 billion, or 8.2% of GDP. The trade in services surplus increased by £0.6 billion to £49.3 billion, or 6.8% of GDP.

Figure 3: Exports of goods fell in Quarter 4 2024

Changes in imports and exports of goods, excluding unspecified goods, £ billion, Quarter 4 (Oct to Dec) 2024 compared with Quarter 3 (July to Sept) 2024

The trade in goods deficit increased by £4.8 billion to £59.5 billion in Quarter 4 2024, mainly because of a fall in the value of exports of goods. Total goods exports fell by £3.5 billion from £89.9 billion in Quarter 3 2024 to £86.4 billion in Quarter 4 2024. The largest decreases in exports of goods were recorded in:

• finished manufactured goods (£1.8 billion)
• semi-manufactured goods (£1.2 billion)
• oil (£0.6 billion)
• other fuels (£0.3 billion)

Goods import levels increased by £1.3 billion, from £144.6 billion in Quarter 3 2024 to £145.9 billion in Quarter 4 2024. The largest increase was recorded in imports of food, beverages and tobacco products which increased by £0.5 billion in Quarter 4 2024.

The trade in services surplus increased by £0.6 billion in Quarter 4 2024 as exports of services increased more than imports.

Exports of services increased by £3.5 billion in Quarter 4 2024, the largest increases were recorded in exports of other business services (£1.8 billion) and financial services (£1.2 billion).

Imports of services increased by £2.9 billion in Quarter 4 2024. Imports of travel services recorded the largest increase of £2.4 billion to a record £24.7 billion in Quarter 4 2024, along with imports of insurance and pension services which increased by £0.6 billion to £3.6 billion.

Primary income

The primary income account records income that the UK receives and pays on financial and other assets, along with the compensation of employees.

The primary income account deficit decreased from a revised £5.6 billion in Quarter 3 2024 to £3.5 billion, or 0.5% of GDP, in Quarter 4 2024. This is because both credits and debits recorded a decrease.

UK receipts (credits) decreased by £1.5 billion from the previous quarter to £103.5 billion as earnings on other investment fell by £1.3 billion.

UK payments to foreign investors (debits) decreased by £3.7 billion from the previous quarter to £107.0 billion in Quarter 4 2024 because of decreased payments on direct investment and other investment which fell by £1.7 billion and £1.3 billion, respectively.

Secondary income

The secondary income account shows current transfers between residents and non-residents.

The secondary income deficit increased from £2.8 billion, or 0.4% of GDP, in Quarter 3 2024 to £5.0 billion, or 0.7% of GDP, in Quarter 4 2024. Payments (debits) by general government increased by £2.1 billion because of an increase in other payments by general government.

A current account deficit, which the UK has experienced each year since 1984, places the UK as a net borrower with the rest of the world, indicating that overall expenditure in the UK exceeds national income. The UK must attract net financial inflows to finance its current (and capital) account deficit. This can be achieved through either disposing of overseas assets to overseas investors or accruing liabilities with the rest of the world.

The financial account recorded a net inflow of £11.1 billion in Quarter 4 (Oct to Dec) 2024 after recording a revised net inflow of £34.0 billion in Quarter 3 (July to Sept) 2024.

Net acquisition of UK assets (investment abroad) represented a financial outflow of £6.9 billion in Quarter 4 2024. Compared with Quarter 3 2024, there was increased direct investment (£14.1 billion outflow) and other investment abroad (£55.5 billion outflow) as UK monetary financial institutions invested in foreign currency deposits overseas. Offsetting these outflows was a large inflow within portfolio investment (£62.1 billion) because of UK monetary financial institutions selling equity securities abroad.

Net incurrence of UK liabilities (investment in the UK) was an inflow of £18.0 billion in Quarter 4 2024 because of portfolio investment (£51.1 billion inflow) as foreign residents were investing in British government gilts. Slightly offsetting this was an outflow from other investment (£34.8 billion) as foreign investors withdrew sterling deposits along with paying off short term loans.

Further details are available in our Quarterly economic commentary article.

The international investment position (IIP) represents the UK’s balance sheet with the rest of the world. IIP measures the difference between the net stock of assets and liabilities at a point in time, which we report as the last day of each quarter. IIP estimates from 2023 onwards have been revised in this publication, bringing a reduction in the net liability position. This is from incorporating revised FDI data of improved quality following a temporary pause to full processing outlined in Section 8: Data sources and quality, and inclusion for the first time of a notable company restructuring.

The preliminary estimate of the IIP net liability position was £280.1 billion at the end of Quarter 4 (31 December) 2024, compared with a revised £397.9 billion at the end of Quarter 3 (30 September) 2024. The UK asset position in the three months to 31 December 2024 was valued at £14,516.5 billion. The value of the UK liability position with the rest of the world was valued at £14,796.5 billion.

The period open for revision in this release is Quarter 1 (Jan to Mar) 2023 onwards and revisions are mainly from incorporating corrected trade in goods and services data and estimates of improved quality from the FDI survey.

Balance of payments

The balance of payments is a statistical statement that summarises transactions between residents and non-residents during a period. It consists of the current account, capital account and financial account.

Current account

The current account is made up of the trade in goods and services account, the primary income account, and the secondary income account. The difference in the monetary value of these accounts is known as the current account balance. A current account balance is in surplus if overall credits exceed debits, and it is in deficit if overall debits exceed credits.

Capital account

The capital account has two components: capital transfers and the acquisition (purchase) or disposal (sale) of non-produced, non-financial assets.

Capital transfers are those involving transfers of ownership of fixed assets, transfers of funds associated with the acquisition or disposal of fixed assets, and cancellation of liabilities by creditors without any counterparts being received in return. The sale or purchase of non-produced, non-financial assets covers intangibles such as patents, copyrights, franchises, leases and other transferable contracts, and goodwill.

Financial account

The financial account covers transactions that result in a change of ownership of financial assets and liabilities between UK residents and non-residents. For example, the acquisitions and disposals of foreign shares by UK residents. The accounts are presented by the functional categories of direct investment, portfolio investment, other investment, financial derivatives, and reserve assets.

International investment position

The international investment position (IIP) is a statement that shows at the end of the period the value and composition of UK external assets (foreign assets owned by UK residents) and identified UK external liabilities (UK assets owned by foreign residents). The framework of international accounts stipulates that the IIP is also presented by functional category, consistent with primary income and the financial account.

Precious metals

In line with international standards, the Office for National Statistics’ (ONS’s) headline trade statistics contain the UK’s exports and imports of non-monetary gold. This trade can greatly influence the size and changes in the UK’s headline trade figures. This is because a substantial amount of the world’s trade in non-monetary gold takes place on the London markets.

Further information on precious metals and their impact can be found in our UK trade bulletin.

Special drawing rights

Some International Monetary Fund (IMF) member countries have access to international reserve assets called special drawing rights (SDRs). A general allocation of SDRs, equivalent to approximately US $650 billion, became effective on 23 August 2021 and was allocated to participant countries in proportion to their existing quotas. The UK’s SDR allocation was equivalent to $19,318 million and was received in August 2021.

Net errors and omissions

Although the balance of payments accounts are, in principle, balanced, imbalances between the current, capital, and financial accounts arise from imperfections in source data and compilation in practice. This imbalance, a usual feature of balance of payments data, is labelled “net errors and omissions.”

For more detailed definitions of terms used in the balance of payments, see our glossary (PDF, 123KB).

Data sources

Balance of payments statistics are compiled from a variety of sources, produced in the national accounts sector and financial accounts (SFA) framework. Some of the main sources used in the compilation include:

• overseas trade statistics (HM Revenue and Customs (HMRC))
• International Trade in Services Survey (ITIS) (Office for National Statistics (ONS))
• International Passenger Survey (ONS); this was suspended between March 2020 and January 2021 because of the coronavirus (COVID-19) pandemic
• Foreign Direct Investment Survey (ONS and Bank of England (BoE))
• various financial inquiries (ONS and BoE)
• Ownership of UK Quoted Shares Survey (ONS)

Trade is measured through both exports and imports of goods and services. Data are supplied by over 30 sources, including several administrative sources, with HMRC being the largest for trade in goods. ITIS, conducted by the ONS, is the largest single data source for trade in services.

The main source of information for UK foreign direct investment (FDI) statistics is our FDI Survey. Separate surveys are used to collect data on inward and outward FDI. This is combined with data from the BoE on the banking sector.

The statistics in this bulletin are compiled using the asset and liability measurement principle, which uses residency as the main distinction between outward and inward investments.

Uncertainty around estimates based on Foreign Direct Investment survey data

Production of estimates from the FDI survey was temporarily paused at the end of 2023, because of previous challenges in processing FDI survey data. This pause has allowed us to review and revise procedures so that we can safeguard timely and quality FDI estimates in the future. We have now re-started processing, starting with historical time periods.

Regarding 2024 estimates in this publication, FDI estimates for Quarter 1 (Jan to Mar) 2024 are based on full processing of quarterly survey data. However, the estimates for all quarters from Quarter 2 (Apr to June) 2024 onwards are based on quarterly survey data, but with simpler processing than normal.

Estimates for quarters in 2023 are based on full processing of survey data and have been updated to reflect the latest data from the 2023 annual FDI surveys. Estimates for quarters in 2021 and 2022 are based on full processing of survey data but have not yet been updated to reflect the latest data from the 2021 and 2022 annual FDI surveys.

Timing for incorporating revised estimates for each period will be in line with our latest National Accounts Revisions Policy. Revised estimates for all periods from 2021 will be completed in the 2025 edition of Pink Book and Blue Book.

Changes affecting UK trade statistics

HMRC data feed correction

During our routine quality assurance, an error was identified in the data that HM Revenue and Customs (HMRC) delivered to the Office for National Statistics (ONS) relating to imports of goods from January 2023 to December 2024. HMRC has identified and resolved the cause of the error in the data feed and we have worked together to understand the impact and correct the data in our estimates of UK imports of goods. Further details of this error have been previously communicated in our UK trade: December 2024 statistical bulletin.

This correction mainly affected imports from non-EU countries, particularly imports of goods from China and Japan. There has been minimal impact on estimates of imports of goods from the United States.

ITIS correction

During further quality assurance, an error was identified in our International Trade in Services (ITIS) results processing system. This error affected our estimates of both imports and exports of services from 2023 onwards.

The correction to ITIS data has been made alongside other standard revisions to trade in services. This affected reference periods 2023 and 2024, including the benchmarking of our 2024 annual trade in services estimates, which were affected by this error.

While this error affected both imports and exports of services, our estimates of exports of services have seen larger corrections. A country breakdown of the services revisions will be available when our full data on trade in services are published in our UK trade in services by partner country release on 25 April 2025.

More details are available in our UK trade: January 2025 bulletin published on 28 March 2025.

Arrangements for how the UK trades with the EU have changed since the UK left the EU on 31 January 2020.

HMRC implemented data collection changes following Brexit, which affected statistics on UK trade in goods with the EU. We have adjusted our estimates of goods imports from the EU in 2021 and 2022 to account for these changes. However, a structural break remains in the full time series for goods imports from and exports to the EU from January 2021.

We therefore advise caution when interpreting and drawing conclusions from these statistics. More detail is provided in our Impact of trade in goods data collection changes on UK trade statistics: summary of adjustments and the structural break from 2021 article.

Quality and methodology

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in our Balance of payments quality and methodology information (QMI).

We will continue to produce our UK balance of payments statistics in line with the UK Statistics Authority’s Code of Practice for Statistics, and in accordance with internationally agreed statistical guidance and standards. This is based on the International Monetary Fund’s Balance of Payments and International Investment Position Manual: Sixth Edition (BPM6) (PDF, 3.0MB), until those standards are updated.