War, the deficits were relatively small. In the 1940s the UK was forced to liquidate many of its

Overseas assets and to borrow substantial sums to pay for the war. Since then the current balance

Has varied — falling towards deficit until the devaluation of the late 1960s when it recovered;

That was followed by the increase in the price of oil by OPEC in 1973, driving the account

into deficit; only to see it move sharply into surplus with the UK’s own oil discoveries. It fell

Into substantial deficit during the boom of the late 1980s, and recovered again in the early

S, even in fact when demand at home was strong. Table 10 shows the composition of the

Balance of payments of the UK.

The overall deficits or surpluses in the balance of payments are brought into balance by movements

In the gold and foreign exchange reserves or liabilities to non-residents. The transactions between foreigners

And residents are carried out, in the UK, through the exchange equalization account.

Table 14.2. UK’s balance of Payments

Current Account ￡ billion

Export of goods + 152.3

Import of goods -164.0

Visible balance -11.7

Trade in services (net balance):

Government -2.0

Transport -0.5

Travel -3.7

Financial and other services + 12.4

Total services +6.2

Other transactions (net balance):

Government -9.9

Other + 12.5

Current balance -2.9

Capital Account