UK has witnessed a biggest shortfall in its balance of payments in 24 months during July to September period and recorded a fall in business investment prior to Brexit, according to a data released on Friday (21).
The UK’s current account deficit widened by £6.6 billion to £26.5bn in the third quarter of 2018, or 4.9 per cent of gross domestic product (GDP), the largest deficit recorded since third quarter of 2016 in both value and percentage of GDP terms, said UK’s Office for National Statistics (ONS).
All of the main components contributed to the worsening current account balance, with worsening primary income, trade and secondary income balances.
The primary income balance deficit worsened by £3.6bn to £11.1bn in the third quarter of 2018, driven by an increase in the profits generated by overseas investors on their UK foreign direct investment (FDI).
UK’s business investment was estimated to have fallen by 1.1 per cent to £46.9bn between second and third quarter of 2018 and third quarter of 2018; this is the third consecutive quarter-on-quarter fall in business investment and the first time this has happened since the economic downturn of 2008 to 2009.
UK’s GDP in volume terms was estimated to have increased by 0.6 per cent between second quarter and third quarter of 2018, unrevised from the first quarterly estimate of GDP, ONS added.
