Story · United Kingdom · 30 Sept 2026
UK underlying current-account deficit narrows to £11.3bn in Q2 2026
The UK underlying current-account deficit, excluding precious metals, narrowed to £11.3 billion in Q2 2026, equal to 1.4% of GDP, from £14.3 billion in Q1.
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£11.3 billion
Q2 underlying current-account deficit
1.4%
Underlying current-account deficit share of GDP
2.5%
Current-account deficit including precious metals share of GDP
Exam link: Trade → net exports → aggregate demand and the current account
Understand the storyExpand Close
The Office for National Statistics reported that the UK's underlying current-account deficit, excluding precious metals, narrowed by £3.0 billion to £11.3 billion in Quarter 2 2026. Including precious metals, the current-account deficit narrowed to £19.9 billion, or 2.5% of GDP. The total trade deficit excluding precious metals fell to £4.2 billion from £9.4 billion, as the goods deficit narrowed to £55.5 billion and the services surplus widened to £51.3 billion.
What happened
In Quarter 2 2026, the underlying current-account deficit excluding precious metals narrowed from £14.3 billion to £11.3 billion, or 1.4% of GDP. The headline current-account deficit including precious metals was £19.9 billion, or 2.5% of GDP. The trade deficit excluding precious metals narrowed to £4.2 billion as the goods deficit fell and the services surplus increased.
Why it matters
The narrowing deficit reduced the gap between the UK's receipts from and payments to the rest of the world. A smaller current-account deficit can reduce the amount of external financing required, but whether it represents an improvement depends on the cause: stronger exports are different from a deficit narrowing because domestic demand and imports have weakened.
Economic context
For A-Level Economics, this is direct UK evidence for the balance of payments, international trade and net exports. The current account includes trade plus income and transfers, so it is broader than the trade balance. Excluding precious metals can provide a clearer view of underlying trends because gold flows are volatile; when evaluating the figures, distinguish the underlying £11.3 billion deficit from the £19.9 billion headline deficit including precious metals.
All key dataExpand Close
- Q2 services trade surplus
- £51.3 billion
- Q2 underlying current-account deficit
- £11.3 billion
- Q2 trade deficit excluding precious metals
- £4.2 billion
- Underlying current-account deficit share of GDP
- 1.4%
- Q2 current-account deficit including precious metals
- £19.9 billion
- Current-account deficit including precious metals share of GDP
- 2.5%
Terms explainedExpand Close
Trade balance
The difference between exports and imports. A surplus means exports exceed imports; a deficit means imports exceed exports.
Use it in an examExpand Close
Evidence
The UK underlying current-account deficit, excluding precious metals, narrowed to £11.3 billion in Q2 2026, equal to 1.4% of GDP, from £14.3 billion in Q1.
Explain
The narrowing deficit reduced the gap between the UK's receipts from and payments to the rest of the world. A smaller current-account deficit can reduce the amount of external financing required, but whether it represents an improvement depends on the cause: stronger exports are different from a deficit narrowing because domestic demand and imports have weakened.
Evaluate
For A-Level Economics, this is direct UK evidence for the balance of payments, international trade and net exports. The current account includes trade plus income and transfers, so it is broader than the trade balance. Excluding precious metals can provide a clearer view of underlying trends because gold flows are volatile; when evaluating the figures, distinguish the underlying £11.3 billion deficit from the £19.9 billion headline deficit including precious metals.
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