Download UK current account

Part A: UK
current account
Chart A.7 The UK current account deficit is high by historical and
international standards
Decomposition of the UK current account(a)
Sources: ONS and Bank calculations.
(a) Primary income mainly consists of compensation of employees and net investment income. Secondary income consists of transfers.
Chart A.8 Depressed mining and quarrying income is one factor
weighing on UK FDI earnings
Nominal earnings on outward FDI(a)
Sources: ONS and Bank calculations.
(a) The total is taken from latest ONS series published on 30 June 2016. The industrial split is based on data published alongside ONS article, ‘An analysis of the drivers
behind the fall in direct investment earnings and their impact on the UK’s current account deficit’, March 2016.
Chart A.9 Purchases of UK equities by foreign investors appear to have
fallen in the run-up to the EU referendum
Changes in non-resident net holdings of FTSE 100 shares(a)(b)(c)
Sources: S&P Global Market Intelligence and Bank calculations.
(a) Quarterly net changes in non-resident holdings of FTSE 100 companies’ shares, as listed on the index at 23 June 2016.
(b) The change in the holding of shares are weighted at each quarterly period by the price of the underlying stock. These data are updated on the date in which a change in
shareholding is formally registered, not the date when the transaction itself takes place, which may be earlier. Data are non seasonally adjusted.
(c) The S&P’s disclaimer of liability, which applies to the data provided, is available at www.bankofengland.co.uk/publications/Documents/fsr/2016/fsr16jul2.xlsx.
Table A.1 FDI and portfolio investment flows have been the main
sources of inward investment since 2011
Financing flows behind the current account deficit
Sources: ONS and Bank calculations.
(a) This is the change in UK foreign liabilities, less the change in UK foreign assets, for each category of investment. The total net inward financing flow is equal in magnitude
to the current account deficit (plus net errors and omissions).
(b) ‘Portfolio investment’ consists of debt securities (including government debt), equities and investment fund shares.
(c) ‘Other investment’ consists mostly of loans and deposits.
(d) The sum of the components may not equal the total, as financing flows for reserves and net derivatives are excluded..
Chart A.10 The United Kingdom’s external liabilities as a share of GDP
have fallen since the financial crisis
UK gross external liabilities by type (a)
Sources: ONS and Bank calculations.
(a) Derivatives are excluded.
Chart A.11 The United Kingdom’s net foreign asset position has been
improving
The United Kingdom’s net international investment position (NIIP)(a)(b)
Sources: ONS and Bank calculations.
(a) The UK NIIP measures the difference between the United Kingdom’s external assets and external liabilities. Data are non seasonally adjusted.
(b) Estimates of the United Kingdom’s NIIP are uncertain. The estimate published by the ONS does not incorporate revaluation effects on the foreign direct investment (FDI)
assets and liabilities. According to Bank calculations, updating the book value of FDI suggests that the United Kingdom’s NIIP may be large and positive. For further details
see the May 2014 Inflation Report, pages 22–23; www.bankofengland.co.uk/publications/Documents/inflationreport/2014/ir14may.pdf.