LONDON (Dow Jones)--The U.K.'s current account deficit narrowed in the first quarter of 2009 as the overseas operations of U.K. banks returned to profitability.
The Office for National Statistics Tuesday said the current account deficit for the first three months of the year narrowed to GBP8.5 billion from GBP8.8 billion in the final quarter of last year. That latter figure was revised wider from GBP7.6 billion.
The deficit was wider than expected, with economists surveyed last week having estimated it at GBP6.9 billion.
As a share of economic output, the deficit rose to 2.5% of gross domestic product from 2.4% of GDP.
The surplus on investment income rose to GBP3.5 billion from GBP0.2 billion in the fourth quarter, while the deficit on the trade in goods fell to GBP20.8 billion from GBP22.3 billion.
The rise in the income surplus was largely due to the overseas operations of U.K. banks, which were largely responsible for a GBP8.2 billion increase in the earnings businesses generated outside the U.K.
"The increase was largely due to the subsidiaries of monetary financial institutions making profits in the first quarter, following large losses in the previous quarter," the ONS said.
The U.K. operations of overseas investment banks also returned to profitability, leading to a GBP2.0 billion increase in the income foreign businesses derived from their activities in the country.
The ONS said the U.K. attracted record amounts from overseas investors in the first quarter, with GBP122.2 billion flowing into its debt and equity markets, up from GBP38.2 billion in the fourth quarter.
Debt markets attracted the bulk of those funds, a total of GBP96.9 billion, including a record high of GBP58.9 billion in short-term securities.
Partly offsetting the rise in the surplus on income and the narrowing of the trade deficit, the surplus on the trade in services fell to GBP12.6 billion from GBP16.3 billion.
-By Paul Hannon, Dow Jones Newswires; +44 20 7842 9491; paul.hannon@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=vtgt79XbJ%2FTpTPxxSJGGtQ%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
June 30, 2009 05:43 ET (09:43 GMT)
Copyright 2009 Dow Jones & Company, Inc.
The Office for National Statistics Tuesday said the current account deficit for the first three months of the year narrowed to GBP8.5 billion from GBP8.8 billion in the final quarter of last year. That latter figure was revised wider from GBP7.6 billion.
The deficit was wider than expected, with economists surveyed last week having estimated it at GBP6.9 billion.
As a share of economic output, the deficit rose to 2.5% of gross domestic product from 2.4% of GDP.
The surplus on investment income rose to GBP3.5 billion from GBP0.2 billion in the fourth quarter, while the deficit on the trade in goods fell to GBP20.8 billion from GBP22.3 billion.
The rise in the income surplus was largely due to the overseas operations of U.K. banks, which were largely responsible for a GBP8.2 billion increase in the earnings businesses generated outside the U.K.
"The increase was largely due to the subsidiaries of monetary financial institutions making profits in the first quarter, following large losses in the previous quarter," the ONS said.
The U.K. operations of overseas investment banks also returned to profitability, leading to a GBP2.0 billion increase in the income foreign businesses derived from their activities in the country.
The ONS said the U.K. attracted record amounts from overseas investors in the first quarter, with GBP122.2 billion flowing into its debt and equity markets, up from GBP38.2 billion in the fourth quarter.
Debt markets attracted the bulk of those funds, a total of GBP96.9 billion, including a record high of GBP58.9 billion in short-term securities.
Partly offsetting the rise in the surplus on income and the narrowing of the trade deficit, the surplus on the trade in services fell to GBP12.6 billion from GBP16.3 billion.
-By Paul Hannon, Dow Jones Newswires; +44 20 7842 9491; paul.hannon@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=vtgt79XbJ%2FTpTPxxSJGGtQ%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
June 30, 2009 05:43 ET (09:43 GMT)
Copyright 2009 Dow Jones & Company, Inc.
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