Balance of payments, UK: October to December 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:
31 March 2022

Next release:
30 June 2022

1. Main points

  • The underlying UK current account deficit excluding precious metals narrowed to £11.4 billion, or 1.9% of gross domestic product (GDP) in Quarter 4 (Oct to Dec) 2021, from £26.1 billion in the previous quarter.

  • The UK current account, when trade of precious metals is included, narrowed to £7.3 billion, or 1.2% of GDP in Quarter 4 2021.

  • In Quarter 4 2021, the total trade deficit, excluding precious metals, narrowed to £10.3 billion as service exports grew more strongly than imports.

  • The primary income account recorded a surplus position of £4.7 billion, or 0.8% of GDP, the first time a surplus has been recorded since Quarter 4 2011 (£0.4 billion).

  • Net financial flows increased in Quarter 4 2021 with a net inflow to the UK of £13.1 billion, as investors sold securities assets and the issuance of UK government bonds to non-resident investors increased.

  • The UK’s net international investment liability position narrowed to £741.6 billion.


Please note that all current account and trade figures exclude non-monetary gold (NMG) 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.

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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 4 (Oct to Dec) 2021.


The total trade balance decreased from a deficit of £13.7 billion in Quarter 3 (July to Sept) 2021 to £10.3 billion in Quarter 4 2021. Import and export flows continued to fluctuate as global economies adapted to the coronavirus (COVID-19) pandemic and changing processes following the UK leaving the EU. Trade in services surplus position, which increased to £32.4 billion in Quarter 4 2021, was strengthened by an increase in exports of transport, intellectual property, and business services.

In Quarter 4 2021, the trade in goods deficit was almost unchanged from the previous quarter as increases in wholesale oil and gas prices affected both exports and imports of oil and other fuels.

Primary income

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

The primary income account recorded a surplus position of £4.7 billion or 0.8% of GDP. UK investments abroad saw higher returns than their foreign counterparts did on their investments in the UK, the first time since Quarter 4 2011. There was a strong return on UK direct investment abroad (credits) as companies reported a more profitable environment. Changing dividend schedules resulted in lower dividend payments to the rest of the world (debits) on equity securities in Quarter 4 2021.

Secondary income

The secondary income deficit widened to £5.8 billion as the UK continued to make payments to the EU, agreed as part of the financial settlement under the withdrawal agreement.

More about economy, business and jobs

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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. 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 £13.1 billion in Quarter 4 (Oct to Dec) 2021.

Net investment in the UK (liabilities) increased by £88.2 billion in Quarter 4 2021. The UK increased its liabilities to the rest of the world as non-residents invested in UK government gilts and placed deposits with UK monetary financial institutions. Direct investment in the UK fell by £10.5 billion as loans from the rest of the world decreased.

Net acquisition of UK assets increased by £75.1 billion in Quarter 4 2021. Direct investment assets abroad increased as earnings were reinvested into foreign affiliates, strengthening equity positions. Portfolio investment assets decreased as investors sold equity and debt securities, while deposits of foreign currency and sterling abroad increased in other investment.

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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 4 (Oct to Dec) 2021, the IIP recorded a decrease in the value of its net liability position to £741.6 billion from £743.4 billion in Quarter 3 (July to Sept) 2021.

In Quarter 4 2021, the UK asset position increased by £106 billion as investors retained profits in direct investments abroad. Strong foreign stock market performance boosted the value of equity assets, and deposits with the rest of the world increased.

The UK liability position increased by £104.1 billion as non-residents invested in UK equity, government gilts and increased their deposits with UK monetary financial institutions.

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5. Balance of payments data

Balance of payments
Dataset | Released 31 March 2022
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 31 March 2022
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 31 March 2022
Quarterly summary information on the size and direction of the revisions made to the data covering a five-year period, UK.

UK Economic Accounts: all data
Dataset | Released 31 March 2022
This is released at the same time as the UK balance of payments and provides supplementary tables for the balance of payments. The UK Economic Accounts also provides users with the perspective of the rest of world looking into the 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. This trade can have a large effect on the size of and change in the UK’s headline trade figures. This is 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.

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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 (ITIS) (Office for National Statistics (ONS))

  • International Passenger Survey (ONS) - this was suspended between March 2020 and January 2021 because of coronavirus (COVID-19)

  • 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 our Developing foreign direct investment statistics: 2021 article, 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.

Making our published spreadsheets accessible

We have published a sample version of a balance of payments table in an annex to our main tables, prepared following the Government Statistical Service (GSS) guidance on releasing statistics in spreadsheets. It is essential that we aim to improve the usability, accessibility and machine readability of our published statistics so that everyone can make use of them. We have published these one-off sample tables to help communicate the changes we will be making to the balance of payments tables in June 2022. If you have any questions or comments on these sample tables, please email

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. This includes lower than usual response to surveys that feed into the estimates.

Given the uncertainties in estimating the impact of the coronavirus 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. This is because of these data collection challenges. More information on the challenges faced is available in our Coronavirus and the effects on the UK balance of payments article, released 23 June 2020.

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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 our 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