For 3rd Quarter
Provided by: Office of National Statistics

From the Release: "There was a current account deficit of £7.7 billion in the third quarter of 2008, up from a deficit of £6.4 billion in the previous quarter. The third quarter deficit was equivalent to -2.1 per cent of Gross Domestic Product (GDP) compared with -1.8 per cent in the previous quarter. The higher current account deficit was mainly the result of falls in the surpluses on income and trade in services. The surplus on income was £7.5 billion, £0.8 billion lower than in the previous quarter, mainly due to a fall in the surplus on foreign direct investment; a fall in earnings on direct investment abroad outweighed a fall in foreign earnings on direct investment in the UK. The surplus on trade in services was £11.5 billion,
£0.6 billion lower than in the previous quarter; the fall was predominantly driven by increased imports of other business services and by lower exports of travel and insurance services. The deficit on trade in goods widened by £0.2 billion to £23.6 billion in the third quarter, while the deficit on current transfers narrowed by £0.3 billion to £3.1 billion."

For 2nd Quarter
Provided by: Office of National Statistics

From the Release: "There was a current account deficit of £11.0 billion in the second quarter of 2008, up from a deficit of £5.5 billion in the previous quarter. The second quarter deficit was equivalent to -3.0 per cent of Gross Domestic Product (GDP) compared with -1.5 per cent in the previous quarter. The higher current account deficit was a result of a fall in the surplus on the income account, which was down £6.0 billion, on the previous quarter at £4.5 billion."

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.

4th Quarter
Provided by: Office of National Statistics

Pre-Release: Last release, the 3rd quarter showed a record current account deficit of £20.0 billion, which is equivalent to -5.7% of the GDP. The 4th quarter will continue to see a big deficit, though it is expected to east back slightly to -£18.3 billion.

Post-Release: The current account deficit shortened faster than forecasted. The downside is that this is a result of foreign-owned banks struggling through the credit crisis. This brought down the direct-investment from abroad portion of the deficit. Trade of services widened its surplus while trade of goods remained mostly unchanged for the fourth quarter.