Current account (balance of payments): what it means
The UK's net position on trade in goods and services, plus income flows such as investment earnings and transfers with the rest of the world.
The current account is part of the balance of payments. It records the UK's trade in goods and services, plus primary income (such as earnings on investments and pay of cross-border workers) and secondary income (transfers such as contributions to international organisations and remittances). A current account deficit means the UK is spending and paying out more abroad than it earns, financed by flows in the financial account.
Why it matters when checking a claim
- Not the same as the trade deficit. The trade balance is only one component; investment income can widen or narrow the overall gap.
- Not the same as the budget deficit. The current account concerns the whole economy's dealings with the rest of the world, not government borrowing.
- Quarterly and revised. The ONS publishes it quarterly, usually as a share of GDP, and revises it often.
See what is the UK current account deficit.
Also searched as: current account deficit, balance of payments, current account meaning, primary income
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Related terms
- Balance of trade: The value of a country's exports minus its imports. A negative balance is a trade deficit.
- Nominal GDP: Gross domestic product measured at current prices, without adjusting for inflation. Used for debt-to-GDP and spending-to-GDP ratios.
- Revisions: Changes to previously published figures, made when more complete data, improved methods or updated seasonal factors become available. A normal part of official statistics.
More inflation, prices and the economy terms: CPI (Consumer Prices Index) · CPIH · RPI (Retail Prices Index) · Core inflation · Nominal GDP · Chained volume measure · Purchasing power parity (PPP) · Bank Rate · Quantitative easing (QE) · Quantitative tightening (QT) · GDP deflator · Output gap.