UK Balance of Payments deficit reduces in the last months of 2019.

writer

The UK Balance of payments deficit is how we measure the value of trade between the UK and the rest of the World.

What is a deficit?

There is usually a deficit. This means that we buy more from the rest of the World than we sell back.
The size of the deficit is measured and for the last three months of 2019 this figure has reduced, which would mean we are selling more and importing less.
But there is a catch to the story.

What does this cover?

The Balance of Payments covers trade in manufactured goods; services such as legal, financial, technology; and investments.
The total amounts for all imports and exports are added up and the imports are subtracted from the exports. If the total imported is more than the total exported, we have a deficit.

This does not mean we ‘owe’ this money to the rest of the World, but it does mean that we buy more in than we sell.
• The deficit reduced to from £19.9 billion to £5.6 billion
• But most of this was due to transactions in Gold
• Because London is one of the World’s largest trading centres for Gold
• If we remove the Gold sales, the deficit still reduced but by a smaller amount from £19.9 billion to £17.1 billion.

Note that this data is for 2019, the most recent available for the UK’s Balance of Payments, and dates from before the recent health pandemic.

Sources

This data comes from the Office National Statistics, which is the official government agency for this data.

https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/bulletins/balanceofpayments/octobertodecember2019#main-points