Balance of payments, UK: July to September 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.

This is not the latest release. View latest release

This is an accredited National Statistic. Click for information about types of official statistics.

Email Jamie Pritchard

Release date:
22 December 2021

Next release:
31 March 2022

1. Main points

  • The underlying UK current account deficit excluding precious metals widened to £21.7 billion, or 3.7% of gross domestic product (GDP) in Quarter 3 (July to Sept) 2021.

  • The UK current account, when precious metals trade is included, widened to £24.4 billion, or 4.2% of GDP in Quarter 3.

  • In Quarter 3 2021, the total trade balance excluding precious metals widened to £8.2 billion as imports increased and exports fell.

  • The primary income deficit widened to £7.1 billion or 1.2% of GDP in Quarter 3 2021 because of larger earnings on investment in the UK by non-residents.

  • The secondary income deficit was widened to £6.4 billion as the first full quarter of payments to the EU under the Withdrawal Agreement were recorded.

  • Net financial flows increased in Quarter 3 2021 with a net inflow to the UK of £11.3 billion, as increases in equity capital and loan liabilities were only partially offset by increases in direct investment and reserve assets.

  • The UK’s net international investment liability position widened to £523.3 billion.


Please note that all current account and trade figures are excluding non-monetary gold and other precious metals unless otherwise stated. This is because movements in non-monetary gold (NMG), an important component of precious metals, can be large and highly volatile, distorting underlying trends in goods exports and imports.

Back to table of contents

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 3 (July to Sept) 2021.


The total trade balance increased from a deficit of £4.5 billion in Quarter 2 (Apr to June) to £8.2 billion in Quarter 3. Import and export flows continue to fluctuate as global economies continue to adapt to the coronavirus (COVID-19) pandemic and changing processes following the UK leaving the EU. In Quarter 3 the trade in goods deficit widened as exports in semi and finished manufactured goods fell while imports of oil and other fuels increased. Trade in services surplus position, which increased to £35.2 billion in Quarter 3, was strengthened by an increase in other business and financial services exports.

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 to £7.1 billion in Quarter 3 2021 as dividend payments reached their pre-pandemic peak, increasing earnings on portfolio investment in the UK. A stronger return on direct investment abroad has increased UK earnings (credits) in Quarter 3 partially offsetting the larger debits.

Secondary income

The secondary income deficit widened to £6.4 billion as the UK made its first full quarter of payments to the EU, agreed as part of the financial settlement under the withdrawal agreement.

More about economy, business and jobs

Back to table of contents

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 net inflow of £11.3 billion in Quarter 3 (July to Sept) 2021.

Net investment in the UK (liabilities) increased by £122.5 billion in Quarter 3. Other investment saw the largest change in flows between Quarter 2 (Apr to June), a net outflow of £76.8 billion, and Quarter 3, a net inflow of £79.9 billion. Deposits from abroad increased in Quarter 3 by £20.6 billion after a withdrawal of deposits in the UK of £58.0 billion in the previous quarter. In Quarter 3 loans from the rest of the world increased by £40.2 billion after reducing loan liabilities by £19.1 billion in Quarter 2.

Net acquisition of UK assets increased by £111.2 billion in Quarter 3, mostly in direct, other investment abroad, and reserve assets. Direct investment abroad increased by £56.2 billion, and the UK financial sector made short term loans of £48.9 billion to the rest of the world. UK reserve assets increased by £20.6 billion as the International Monetary Fund (IMF) special drawing rights (SDR) allocation became effective in August 2021 and was allocated to participant countries in proportion to their existing quotas.

Back to table of contents

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 3 (July to Sept) 2021, the IIP recorded an increase in the value of its net liability position to £523.3 billion from £512.3 billion in Quarter 2 (Apr to June) 2021.

In Quarter 3 2021, the UK asset position increased by £218.5 billion while the UK liability position increased by £229.5 billion leading to the UK net liability position widening to £523.3 billion with both asset and liability positions recording positive revaluation affects.

Back to table of contents

5. Balance of payments data

Balance of payments
Dataset | Released 22 December 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 22 December 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 22 December 2021
Quarterly summary information on the size and direction of the revisions made to the data covering a five-year period, UK.

Back to table of contents

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. This trade can have a large effect on the size of and change in the UK’s headline trade figures because a significant 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 the UK trade release.

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, 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.

Back to table of contents

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 (ITIS) (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. 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 (Jan to Mar) 2021 onwards.

Effect 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 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.

Economic statistics governance after EU exit

Following the UK’s exit from the EU, new governance arrangements are being put in place that will support the adoption and implementation of high-quality standards for UK economic statistics. These governance arrangements will promote international comparability and add to the credibility and independence of the UK’s statistical system.

At the centre of this new governance framework will be the new National Statistician’s Committee for Advice on Standards for Economic Statistics (NSCASE). NSCASE will support the UK by ensuring its processes for influencing and adopting international statistical standards are world-leading. The advice NSCASE provides to the National Statistician will span the full range of domains in economic statistics, including the National Accounts, fiscal statistics, prices, trade and the balance of payments and labour market statistics. Further information about National Statistician’s Committee for Advice on Standards for Economic Statistics (NSCASE) is available.

Back to table of contents

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.

Back to table of contents

Contact details for this Statistical bulletin

Jamie Pritchard
Telephone: +44 1633 456106