Topic / economics

Balance of Payments

Current-account flows, capital movements and a country's transactions with the rest of the world.

Core exam brief

Know the idea before you use the evidence.

Definition

The balance of payments records transactions between residents of one economy and the rest of the world, including the current and financial accounts.

Chain of analysis

A larger trade deficit worsens the current account unless offset elsewhere, while financial inflows can finance external deficits and affect the exchange rate.

Evaluation trigger

A deficit is not automatically harmful: judge its size, persistence, financing, productivity effects and the economy's external liabilities.

Latest verified coverage

30 Sept 2026 · United Kingdom

Balance of PaymentsTrade

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.

Read →

Container freight train on the West Coast Main Line

24 Sept 2026 · United States

Balance of PaymentsTrade

U.S. current-account deficit widens to $246.0bn in Q2 2026

The U.S. current-account deficit widened by $33.4 billion, or 15.7%, to $246.0 billion in Q2 2026, equal to 3.0% of current-dollar GDP compared with 2.7% in Q1.

Read →

Freight truck hauling an intermodal shipping container

Analysis and example bank

29 July 2026 · United Arab Emirates

15-marker25-marker

UAE keeps Base Rate at 3.65% under the dirham's US dollar peg

On 29 July 2026, the Central Bank of the UAE kept its Base Rate at 3.65% after the US Federal Reserve left its Interest on Reserve Balances rate unchanged. The decision is a direct exchange-rate case because the Base Rate is anchored to the Fed under the UAE's fixed dirham-dollar regime. CBUAE's operating framework also states that it intervenes in the foreign-exchange market around USD/AED 3.672-3.673 to maintain the peg.

Read →

Stacked freight containers at a container port

13 August 2026 · United Kingdom

15-marker25-marker

ONS reported that the UK's total goods-and-services trade deficit widened by £0.3bn to £8.0bn in Q2 2026

ONS reported that the UK's total goods-and-services trade deficit widened by £0.3bn to £8.0bn in Q2 2026. The headline hides a major contrast: a £60.7bn goods deficit was largely offset by a £52.7bn services surplus. This is a strong balance-of-payments example because it teaches students not to confuse the trade balance with the entire current account.

Read →

26 August 2026 · United States

15-marker25-marker

U.S. GDP growth slows to 1.5% annualised in Q2 2026

U.S. real GDP grew at a 1.5% annualised rate in Q2 2026, down from 2.1% in Q1. Yet private domestic final sales grew 4.2%, making this a strong example of why students should look beyond the headline GDP number.

Read →

Updated July 2026 · China / Global

25-markerTrade

China’s growth slows and weakens global demand

China’s real GDP grew 4.3% year on year in Q2 2026, down from 5.0% in Q1. First-half growth was 4.7%. The example shows how slower activity in a major economy can transmit to other countries through trade and aggregate demand.

Read →

A container ship docking at a marine terminal