Balance of payments deficit shrinks

The deficit on the UK current account was cut to £12.8 billion in the third quarter of 2012 from a revised deficit of £17.4 billion for the previous quarter.

There was, however, a deficit of £18.4 billion recorded with the EU in the third quarter, compared with a deficit of £16.4 billion in the previous quarter. This increase was due to higher deficits on income and on current transfers.

The current account with non-EU countries showed a surplus of £5.6 billion in the third quarter of last year, compared with a deficit of £1.1 billion in the previous quarter. This reversal of fortunes was due to a higher surplus on income and lower deficits on trade in goods.

The trade in goods deficit in the third quarter of 2012 was £25.6 billion, compared with £27.9 billion in the previous quarter. Exports rose by £1.5 billion while imports fell by £0.8 billion.

The trade in services surplus was £17.3 billion in the third quarter of 2012, an increase of £0.4 billion from the previous quarter.

Exports overall remained flat at £46.9 billion, with increases in other business services and royalties and license fees offset by decreases in financial services and personal, cultural and recreational services.

Imports decreased by £0.4 billion to £29.6 billion, due to a decrease in other business services and government services, partially offset by increases in travel and computer and information services.

www.ons.gov.uk/ons/dcp171778_287129.pdf