Pink Book 2026: wider trade gap lifts UK external deficit to 3.0% of GDP
Victoria Shinder2 min readThe Office for National Statistics published the 2026 Pink Book, its annual review of the UK balance of payments, on 30 October. It puts the UK current account deficit at £91.6 billion in 2025, or 3.0% of GDP, widening slightly from a revised £84.3 billion, or 2.9%, in 2024. All periods were open to revision, and the ONS attributes the changes to the current account to methods improvements and updated trade and foreign direct investment survey data.
The trade balance, including precious metals, widened to a deficit of 1.3% of GDP from 0.7%. The primary income deficit narrowed to 1.2% of GDP from 1.6%, as the direct investment surplus widened, and the secondary income deficit was unchanged at 0.6%. The rate of return on foreign investment in the UK fell to 3.7% and the return on UK investment abroad to 3.4%, which the ONS links to lower interest rates at home and abroad.
On the financial side, the account recorded a net inflow of £85.6 billion, or 2.8% of GDP. The UK's net international investment liability rose to £60.7 billion, 2.0% of GDP, at the end of 2025, from a revised £40.9 billion. In the G7 comparison, the UK deficit was the second largest after the US at 3.8%, while Japan ran the largest surplus at 4.8%.
What it means
The UK funds its deficit by selling assets or borrowing from abroad each year, and the Pink Book is where that shows up in full. The shift in 2025 came from trade, not income: the income account actually improved. That matters for sterling because a deficit driven by trade needs continuing inflows of £80 to £90 billion a year, and the net liability position, still small at 2% of GDP, is moving in the direction that makes those inflows more sensitive to confidence.