A Financial Perspective on the UK Current Account Deficit

Philip Lane

National Institute Economic Review, 2015, vol. 234, issue 1, F67-F72

Abstract: A drop in net FDI investment income has been the primary factor in the recent deterioration in the measured UK current account balance, with the trade balance relatively stable. We argue that financial engineering (with little net impact on the underlying international investment position for the UK) may have contributed to the decline in net FDI investment income, such that the headline current account balance cannot be interpreted as a sufficient indicator of the state of the UK's external position. A more granular analysis of cross-border financial linkages than is possible with currently-published data would be required in order to provide a comprehensive assessment of external sustainability.

Keywords: current account; financial globalisation; international investment income (search for similar items in EconPapers)
JEL-codes: E01 F20 F40 F62 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://ner.sagepub.com/content/234/1/F67.abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:niesru:v:234:y:2015:i:1:p:f67-f72

Access Statistics for this article

More articles in National Institute Economic Review from National Institute of Economic and Social Research Contact information at EDIRC.
Bibliographic data for series maintained by SAGE Publications ().