First quarter current account was the lowest in more than 3 years. It was less of a drag on the GDP, as its proportion was -2.4% in Q1 compared to -3.5% in Q4 of 2007. A surplus in the income account helped narrow the current account gap. Earnings losses from foreign owned banks operating in the UK was resulted by the recent financial turmoil. Meanwhile, earnings on direct investments abroad remained high. Also, a narrowing of goods trade deficit was offset by a narrowing of services trade surplus. 

From the release: The lower current account deficit was a result of a rise in the surplus on the income account, which was up £2.2 billion, on the previous quarter at £9.0 billion. The main contributory factor behind the rising surplus on income account was a fall in the deficit of other investment from £8.3 billion in the fourth quarter of 2007 to a deficit of £5.1 billion in the first quarter of 2008. This is the lowest deficit on other investment since the fourth quarter of 2005 and largely reflects a fall in net interest payments made by UK banks.