UK Q1 Current Account Deficit Exceeds Forecasts

The UK’s current account deficit narrowed to £22.1 billion (2.8% of GDP) in the first quarter of 2026 from an upwardly revised £27.2 billion in the previous quarter, but remained slightly wider than market expectations of a £21.5 billion shortfall. The primary income deficit decreased to £3.9 billion, or 0.5% of GDP, from £11.9 billion in the fourth quarter, as payments to foreign investors dropped by £1.5 billion to £111.0 billion, while receipts increased by £6.5 billion to £107.1 billion. In addition, the secondary income deficit narrowed to £3.5 billion from £3.8 billion in the previous period, remaining at 0.5% of GDP. Meanwhile, the goods trade deficit increased to £66.6 billion from £64.5 billion in the prior quarter, whereas the services surplus declined slightly to £51.8 billion from £53.0 billion.

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.