Balance of payments, UK: July to September 2024

• The underlying UK current account deficit excluding precious metals widened to £20.0 billion, or 2.8% of gross domestic product (GDP), in Quarter 3 (July to Sept) 2024; this is a change of £2.1 billion from the previous quarter.

• The UK current account deficit, when trade in precious metals is included, narrowed by £5.9 billion to £18.1 billion, or 2.5% of GDP in Quarter 3 2024.

• The total trade deficit, excluding precious metals, expanded slightly to £6.8 billion, as the goods deficit narrowed to £51.2 billion and the services surplus decreased to £44.4 billion.

• The primary income account deficit widened to £10.5 billion, or 1.5% of GDP in Quarter 3 2024.

• Net financial flows increased by £3.3 billion from the previous quarter, with the UK recording a net inflow of £19.1 billion in Quarter 3 2024.

• The preliminary estimate of the UK’s net international investment liability position on 30 September 2024 widened to £836.7 billion from £732.7 billion as of 30 June 2024.

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 £20.0 billion, or 2.8% of gross domestic product (GDP), in Quarter 3 (July to Sept) 2024. This is an increase of £2.1 billion from Quarter 2 (Apr to June) 2024 when the deficit of £17.9 billion was 2.5% of GDP.

Table 1 summarises the latest current account data for Quarter 3 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. Because we have temporarily paused full processing of Foreign Direct Investment (FDI) survey data, recent FDI-related estimates 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 over estimates in FDI survey data" in Section 8: Data sources and quality

Trade

The total trade deficit for goods and services increased to £6.8 billion, or 1.0% of GDP, in Quarter 3 2024. This increased from a downwardly revised £6.2 billion, or 0.9% of GDP, in Quarter 2 2024. For more details of revisions to previous estimates, see Section 5: Revisions.

The trade in goods deficit narrowed by £1.8 billion from the previous quarter to £51.2 billion, or 7.2% of GDP. The trade in services surplus decreased by £2.4 billion to £44.4 billion, or 6.2% of GDP.

Figure 3: Imports of all commodity types decreased in Quarter 3 2024

Changes in imports and exports of goods, excluding unspecified goods, £ billion, Quarter 3 (July to Sept) 2024 compared with Quarter 2 (Apr to June) 2024

The trade in goods deficit narrowed by £1.8 billion to £51.2 billion in Quarter 3 2024, because of a fall in the value of imports of goods that occurred in all commodity types. Total imports fell by £4.3 billion, from £144.5 billion in Quarter 2 2024 to £140.1 billion in Quarter 3 2024. The value of goods exports also decreased in Quarter 3 by £2.5 billion from the previous quarter. The largest decreases in both imports and exports were recorded in the value of trade in oil, which fell because of decreasing crude oil prices.

The trade in services surplus decreased by £2.4 billion to £44.4 billion in Quarter 3 2024. This is because exports of services fell by £1.8 billion, led by a decrease in exports of other business services of £1.7 billion. Imports of services recorded a small increase of £0.6 billion in Quarter 3 2024, with imports of travel services recording the largest increase of £0.3 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 increased by £2.7 billion to £10.5 billion, or 1.5% of GDP, in Quarter 3 2024. This is because both credits and debits recorded an increase. UK receipts (credits) rose by £2.7 billion, as UK earnings on direct investment increased by £2.5 billion from the previous quarter. The increase in earnings was offset by a larger increase of £5.0 billion in UK payments (debits) to foreign investors on their direct investments in the UK.

Secondary income

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

The secondary income deficit decreased from £3.8 billion, or 0.5% of GDP, in Quarter 2 2024 to £2.7 billion, or 0.4% of GDP, in Quarter 3 2024.

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 £19.1 billion in Quarter 3 (July to Sept) 2024. This was after recording a downwardly revised net inflow of £15.8 billion in Quarter 2 (Apr to June) 2024.

Net acquisition of UK assets (UK investment abroad) in Quarter 3 2024 had an outflow of £119.7 billion. UK investors increased investments abroad in portfolio investment (£52.6 billion), investing in debt securities (£42.6 billion), and equity securities (£10.0 billion). Other investment increased by £83.4 billion, as UK residents increased investments in short-term loans with monetary financial institutions (banks) in both sterling loans and foreign currency loans.

Net incurrence of UK liabilities (investment in the UK) recorded an inflow of £138.8 billion in Quarter 3 2024, as foreign investors increased foreign currency deposits in UK banks and investments in 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.

The preliminary estimate of the IIP net liability position was £836.7 billion at the end of Quarter 3 (30 September) 2024, compared with a revised £732.7 billion at the end of Quarter 2 (30 June) 2024. The UK asset position in the three months to 30 September 2024 was valued at £13,678.7 billion. The value of the UK liability position with the rest of the world was valued at £14,515.4 billion.

Users should be aware that recent IIP estimates are subject to more uncertainty than normal because full processing of our Foreign Direct Investment (FDI) survey data has been temporarily paused. This is explained in the Uncertainty over estimates in FDI survey data subsection of Section 8: Data sources and quality. Estimates for periods from Quarter 3 (30 September) 2023 onwards are based on simpler processing of quarterly survey data than usual. Estimates for 2021 and 2022 do not incorporate the latest annual FDI survey data yet.

The period open for revision in this release is Quarter 1 (Jan to Mar) 2023 onwards.

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. Because we have temporarily paused full processing of Foreign Direct Investment (FDI) survey data, recent FDI-related estimates 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 over estimates in FDI survey data" in Section 8: Data sources and quality

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 sets out 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 have a large effect on the size of and change 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 over estimates in 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 allows us to review and revise procedures so that we can safeguard timely and quality FDI estimates in the future.

The estimates for all quarters since (and including) Quarter 3 (July to Sept) 2023 are based on quarterly survey data, but with simpler processing than normal. 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.

Full FDI survey processing has started to resume, beginning with annual FDI survey data. Annual FDI estimates for 2022 were published in our Foreign direct investment involving UK companies: 2022 bulletin on 8 October 2024. We have also announced that annual FDI estimates for 2023 will be published in our Foreign direct investment involving UK companies: 2023 bulletin on 14 January 2025. We will then turn to updating quarterly estimates.

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

Changes affecting UK trade statistics

The arrangements for how the UK trades with the EU changed, since the UK left the EU on 31 January 2020.

HMRC implemented some 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.