In the red
For decades the UK has been consuming more than it produces. And now it is running out of road.
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In the red
For decades the UK has been consuming more than it produces. And now it is running out of road.
FIND OUT MORE
In the red
For decades the UK has been consuming more than it produces. And now it is running out of road.
CLICK HERE
Explore Further
What is the UK’s Current Account?
The Current Account is one side of the Balance of Payments. Like a personal current account, is where regular income arrives and payments are made. Most of these relate to imports and exports, but they also include dividends and interest coming in from UK investments abroad and going out from foreign investments in the UK.
If the Current Account is so massively in the red, how are we paying for it?
That’s the other side of the Balance of Payments, called the Capital and Financial Accounts. It’s where money comes from abroad in loans and capital investment.
Capital investment sounds good. What does that mean?
Not good at all! It means that we're selling everything that isn't nailed down (and quite a lot that is) to foreigners to pay for our overspending. That includes everything from high-end flats in London to high street brands, football clubs, water companies, railways, the Royal Mail, our airports and much of our energy system (and much else besides).
That’s a lot! We must be running out of things to sell!
Quite possibly! And the loss of these assets also comes with a huge catch. Because when foreigners invest in the UK they expect a return such as rent, interest or dividends. These come out of the Current Account, which causes the UK’s debts to increase still further. This sets up a vicious cycle, with more assets having to be disposed of to pay the returns due on assets previously sold.
What is the UK’s Current Account?
The Current Account is one side of the Balance of Payments. Like a personal current account, is where regular income arrives and payments are made. Most of these relate to imports and exports, but they also include dividends and interest coming in from UK investments abroad and going out from foreign investments in the UK.
If the Current Account is so massively in the red, how are we paying for it?
That’s the other side of the Balance of Payments, called the Capital and Financial Accounts. It’s where money comes from abroad in loans and capital investment.
Capital investment sounds good. What does that mean?
Not good at all! It means that we're selling everything that isn't nailed down (and quite a lot that is) to foreigners to pay for our overspending. That includes everything from high-end flats in London to high street brands, football clubs, water companies, railways, the Royal Mail, our airports and much of our energy system (and much else besides).
That’s a lot! We must be running out of things to sell!
Quite possibly! And the loss of these assets also comes with a huge catch. Because when foreigners invest in the UK they expect a return such as rent, interest or dividends. These come out of the Current Account, which causes the UK’s debts to increase still further. This sets up a vicious cycle, with more assets having to be disposed of to pay the returns due on assets previously sold.
What is the UK’s Current Account?
The Current Account is one side of the Balance of Payments. Like a personal current account, is where regular income arrives and payments are made. Most of these relate to imports and exports, but they also include dividends and interest coming in from UK investments abroad and going out from foreign investments in the UK.
If the Current Account is so massively in the red, how are we paying for it?
That’s the other side of the Balance of Payments, called the Capital and Financial Accounts. It’s where money comes from abroad in loans and capital investment.
Capital investment sounds good. What does that mean?
Not good at all! It means that we're selling everything that isn't nailed down (and quite a lot that is) to foreigners to pay for our overspending. That includes everything from high-end flats in London to high street brands, football clubs, water companies, railways, the Royal Mail, our airports and much of our energy system (and much else besides).
That’s a lot! We must be running out of things to sell!
Quite possibly! And the loss of these assets also comes with a huge catch. Because when foreigners invest in the UK they expect a return such as rent, interest or dividends. These come out of the Current Account, which causes the UK’s debts to increase still further. This sets up a vicious cycle, with more assets having to be disposed of to pay the returns due on assets previously sold.