Balance of payments, UK: April to June 2021

A measure of cross-border transactions between the UK and rest of the world. Includes trade, income, capital transfers and foreign assets and liabilities.

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Release date:
30 September 2021

Next release:
22 December 2021

1. Main points

  • The underlying UK current account deficit excluding non-monetary gold and other precious metals widened to £10.2 billion, or 1.8% of gross domestic product (GDP) in Quarter 2 (Apr to June) 2021.

  • In Quarter 2 2021, the total trade balance excluding precious metals switched from a £3.6 billion surplus in Quarter 1 (Jan to Mar) 2021 to a small deficit of £0.9 billion as imports increased more than exports.

  • The primary income deficit widened to £5.5 billion or 0.9% of GDP in Quarter 2 2021 from £1.1 billion in Quarter 1 2021; this was because of a decrease in earnings from UK investments abroad.

  • The secondary income deficit was broadly unchanged at £3.8 billion even as payments to the EU resumed under the Withdrawal Agreement with effect from Quarter 2 2021.

  • Financial flows decreased in Quarter 2 2021 with a net inflow to the UK of £11.6 billion, as UK monetary financial institutions withdrew deposits placed overseas.

  • The UK’s net international investment position liability widened by £14.9 billion to £581.3 billion as foreign investors continued to invest in UK debt securities.


Please note that all current account and trade figures are excluding non-monetary gold and other precious metals unless otherwise stated.

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2. Current account

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

Table 1 summarises the latest current account data for Quarter 2 (Apr to June) 2021.


The total trade balance switched from a surplus of £3.6 billion in Quarter 1 (Jan to Mar) to a small deficit of £0.9 billion in Quarter 2 (Apr to June). Import and export flows continue to fluctuate as global economies adapt to the coronavirus (COVID-19) pandemic and following the UK leaving the EU.

Primary income

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

The primary income deficit widened in Quarter 2 2021 as UK earnings on direct investment abroad decreased, returning to normal levels after a strong Quarter 1, while foreign earnings on UK assets increased slightly.

Secondary income

The secondary income deficit widened slightly to £3.8 billion as the UK started to make payments to the EU agreed as part of the Financial Settlement under the Withdrawal Agreement.

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3. Financial account

A current account deficit 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, which 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 decreased net inflow of £11.6 billion in Quarter 2 (Apr to June) 2021, from a net inflow of £16.0 billion recorded in Quarter 1 (Jan to Mar) 2021. The net inflow was mostly because of UK investors decreasing investment overseas in most asset classes partially offset by a return to buying foreign equities and debt securities.

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4. International investment position

The international investment position (IIP) examines the UK’s balance sheet with the rest of the world, measuring the difference between the net stock of assets and liabilities.

In Quarter 2 (Apr to June) 2021, the IIP recorded an increase in the value of its net liability position to £581.3 billion from £566.4 billion in Quarter 1 (Jan to Mar) 2021.

In Quarter 2 2021, the gross asset position decreased by £5.6 billion while the gross liability position increased by £9.3 billion leading to the UK net liability position widening to £581.3 billion. The small movements in the gross values reflect large offsetting changes across the functional categories.

Both assets and liabilities recorded positive revaluation impacts as global equity markets rose, but these gains were partially offset by the continued fall in financial derivative positions.

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5. Balance of payments data

Balance of payments
Dataset | Released 30 September 2021
Quarterly summary of balance of payments accounts including the current account, capital transfers, transactions, and levels of UK external assets and liabilities.

Balance of payments time series
Dataset | Released 30 September 2021
Quarterly summary of balance of payments accounts including the current account, capital transfers, transactions and levels of UK external assets and liabilities.

Balance of payments -revision triangles
Dataset | Released 30 September 2021
Quarterly summary information on the size and direction of the revisions made to the data covering a five-year period, UK.

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6. Glossary

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') headline trade statistics contain the UK's exports and imports of non-monetary gold. Because a significant amount of the world's trade in non-monetary gold takes place on the London markets, this trade can have a large impact on the size of and change in the UK's headline trade figures.

Further information on precious metals and their impact can be found in the UK trade release.

Net errors and omissions

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

A more detailed glossary (PDF, 123KB)of terms used in the balance of payments is also available.

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7. Measuring the data

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 (Office for National Statistics (ONS))

  • International Passenger Survey (ONS) - this was suspended from 16 March 2020

  • 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, HMRC being the largest for trade in goods. The International Trade in Services Survey (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 the Annual 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. In line with the FDI development plan published in April 2021, we have reviewed and developed the population and sampling frame of FDI businesses. These changes have been introduced for reference periods from Quarter 1 (January to March) 2021 onwards.

Impact of coronavirus on data quality

Since the start of the coronavirus (COVID-19) pandemic and various lockdown restrictions we have faced numerous challenges in producing the UK balance of payments estimates, including lower than usual response to surveys that feed into the estimates.

Given the uncertainties in estimating the impact of the pandemic on the accounts, users should be aware of potentially larger revisions than usual. UK balance of payments data and international investment position (IIP) estimates since Quarter 1 (Jan to Mar) 2020 are therefore subject to more uncertainty than usual because of these data collection challenges. More information on the challenges faced is available in Coronavirus and the effects on the UK balance of payments.

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8. Strengths and limitations

Quality and methodology

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Balance of payments 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 (IMF's) Balance of Payments Manual sixth edition (BPM6) (PDF, 3.0MB), until those standards are updated.

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Contact details for this Statistical bulletin

Jamie Pritchard
Telephone: +44 1633 456106