UK Current Account Deficit Widens in Q4

The UK’s current account deficit widened to £18.4 billion (2.4% of GDP) in the fourth quarter of 2025 from a revised £10.7 billion in the previous quarter but was below market expectations of a £23.4 billion shortfall. The primary income deficit increased to £2.7 billion, or 0.3% of GDP, from £0.7 billion in the third quarter, as payments to foreign investors rose by £2.6 billion to £111.1 billion, outpacing the £0.7 billion increase in receipts to £108.4 billion. In addition, the goods trade deficit expanded to a record £65.5 billion from £59.4 billion in the prior quarter, whereas the services surplus decreased slightly to £53.3 billion from £53.5 billion. Meanwhile, the secondary income deficit narrowed to £3.6 billion (0.5% of GDP) from £4.1 billion (0.5% of GDP) in the previous period.

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.