UK Q3 Current Account Gap Smallest in Nearly 3 Years

The UK’s current account deficit narrowed to £12.1 billion (1.6% of GDP) in Q3 2025, down from a downwardly revised £21.2 billion in Q2 and well below expectations of a £21.3 billion shortfall. This marked the smallest deficit since Q4 2022, driven primarily by a sharp improvement in the primary income balance. The primary income deficit narrowed significantly to £1.9 billion from £8.4 billion, as credits rose by £5.5 billion while payments to foreign investors declined by £1.1 billion. Additionally, the goods trade deficit narrowed to £58.9 billion from £60.0 billion. Meanwhile, the services surplus increased to £52.8 billion from £51.3 billion, as exports grew by a larger amount than imports. Exports of services rose by £2.2 billion to £137.9 billion, driven primarily by transport and intellectual property services. On the other hand, the secondary income deficit widened slightly, rising by £0.1 billion to £4.1 billion (0.5% of GDP), up from £4.0 billion (0.5% of GDP) in Q2.

The UK’s current account deficit widened to £28.9 billion (3.8% of GDP) in Q2 2025, up from a downwardly revised £21.2 billion in Q1 and well above expectations of a £24.9 billion shortfall. This was the largest deficit since Q2 2023, driven primarily by a sharp deterioration in the primary income balance. The primary income deficit widened to £16.8 billion from £9.1 billion, as credits decreased while debits increased—receipts declined by £2.1 billion, while payments to foreign investors rose by £5.6 billion. Additionally, the goods trade deficit widened to £61.7 billion from £55.5 billion, as imports fell by £0.7 billion while exports declined by £6.5 billion, mainly due to lower shipments of semi-manufactured goods, finished goods, and oil. Meanwhile, the services surplus increased to £53.8 billion from £48.3 billion. On the other hand, the secondary income deficit fell slightly, decreasing by £0.7 billion to £4.2 billion (0.6% of GDP), down from £4.9 billion (0.7% of GDP) in Q1.

The UK’s current account deficit widened to £23.5 billion (3.2% of GDP) in Q1 2025, up from £21.0 billion in Q4 2024 and well above expectations of a £19.75 billion shortfall. It was the largest deficit since Q2 2024, driven primarily by a sharp deterioration in the primary income balance. The primary income deficit widened by £2.9 billion to £6.4 billion, as credits fell more than debits—receipts declined by £6.7 billion, while payments to foreign investors fell by £3.8 billion. Meanwhile, the services surplus narrowed by £1.4 billion to £47.8 billion, with services imports rising by £5.4 billion and outpacing a £4.0 billion increase in services exports. In contrast, the goods trade deficit shrank by £4.1 billion to £55.3 billion, largely due to a £6.2 billion increase in goods exports, while goods imports rose by £2.0 billion. The secondary income deficit also narrowed slightly, falling by £0.3 billion to £4.7 billion (0.6% of GDP), down from £5.0 billion (0.7% of GDP) in Q4 2024.