UK Q2 current account deficit 7.0 bln stg vs 8.7 bln in Q1

The UK balance of payments deficit in the second quarter unexpectedly narrowed as the trade gap with EU countries diminished, official figures showed today. The office of National Statistics said the current account deficit during the quarter stood at 7.0 bln stg against an upwardly revised deficit of 8.7 bln stg in the previous quarter. Analysts were expecting an 8.5 bln shortfall, up on the initially predicted 8.3 bln deficit in the first quarter. The statistics office said the second quarter deficit is equivalent to 2.2 pct of GDP, down from 2.8 pct of GDP in the fourth quarter of 2005. Compared with the first quarter, the current account showed lower deficits on both trade in goods and current transfers and a higher surplus in income, partially offset by a fall in the surplus on trade in services The UK has now recorded a current account deficit for every quarter since the third quarter of 1998. Against the EU, a deficit of 5.0 bln stg was recorded, compared with the 8.2 bln shortfall in the previous quarter. Meanwhile, the current account deficit with non-EU countries widened to 2.0 bln stg from 0.6 bln stg in the previous quarter.