Fact Service October 2019

Issue 40

Balance of payments deficit contracts

Britain’s trading position with the rest of the world improved slightly in the second quarter of the year, but was still in deficit, official figures show. 

The UK’s current account deficit was £25.2 billion in the April to June quarter, down by £7.9 billion from the revised deficit of £33.1 billion in the January to March quarter. 

The trade in services surplus was cut to £22.7 billion in the second quarter of the year, a decrease of £2.6 billion on the first quarter. This was down to negative growth in exports, which recorded a fall of £5.3 billion to £71.5 billion, along with a decrease in imports of £2.7 billion to £48.7 billion.

The trade in goods deficit shrank to £34.1 billion, compared with £48.1 billion in the previous quarter as exports fell by £4.6 billion, while imports fell by £18.6 billion. 

The deficit with the EU grew to £28.4 billion against £27.7 billion in the first quarter. The trade on goods deficit narrowed by £3.9 billion to £22.0 billion, as exports decreased by £4.8 billion to £40.7 billion, while imports decreased by £8.7 billion to £62.7 billion.

Meanwhile, the current account surplus with non-EU countries was £3.2 billion against a £5.3 billion deficit in the first quarter.