UK: Expect small improvement in the current account deficit - Nomura

Analysts at Nomura see a small improvement in the UK’s current account deficit from £16.9bn in Q1 to £16.2bn in Q2.

Key Quotes

“The current account balance can be broken down into four distinct components: goods trade, services trade, incomes and transfers. Two of these we already know for the second quarter – the services trade surplus was unchanged from Q1 while the goods deficit improved by a modest £1bn. The incomes deficit is far more modest than it was a year ago, and that may continue to improve thanks to the global economic recovery leading to an increase in repatriated income. As a result we see a small improvement in the current account deficit from £16.9bn in Q1 to £16.2bn in Q2 (i.e. from 3.4% to 3.2% of GDP).”