The UK’s current account deficit widened to £91.6 billion in 2025, 3.0 per cent of GDP, from a revised £84.3 billion, the ONS said on Friday.
That is a rise of £7.3 billion in cash terms, from 2.9 per cent of GDP in 2024. The ONS said the UK recorded the second largest current account deficit of the G7 economies in 2025.
The trade balance, including precious metals, widened to a deficit of 1.3 per cent of GDP, from a revised 0.7 per cent in 2024. The ONS said it had moved silver, platinum and palladium bullion from the “semi-manufactured goods” group to a group for commodities and transactions not classified according to kind.
The rate of return on foreign investment in the UK fell to 3.7 per cent, and the rate of return on UK investment abroad fell to 3.4 per cent. The ONS linked both falls to lower interest rates in the UK and abroad.
The UK has run a current account deficit every year since 1984, so it must attract net financial inflows to cover it. The financial account recorded a net inflow of £85.6 billion, or 2.8 per cent of GDP, in 2025.
Inflows rose by £189.6 billion to £574.3 billion, and outflows rose by £198.0 billion to £488.7 billion. The ONS said the rise in outflows was mainly due to UK residents putting more into currency and deposits abroad.
Foreign currency deposits in UK banks drove the rise in inflows. They climbed from £252.6 billion in 2024 to £360.3 billion, lifting other investment liabilities from £273.5 billion to £400.9 billion.
Portfolio investment into the UK rose from £121.3 billion to £144.4 billion. Foreign investors moved from net sales of £5.7 billion of UK equity and investment fund shares in 2024 to net purchases of £34.7 billion.
The ONS said that may reflect comparatively strong performance in UK equity markets and portfolio diversification by international investors.
Net foreign purchases of gilts fell from an unusually high £102.0 billion in 2024 to £28.5 billion. Purchases by foreign residents other than central banks dropped from £78.7 billion to £37.6 billion, while foreign central banks were net sellers of £9.1 billion.
The UK’s net international investment liability position stood at £60.7 billion, or 2.0 per cent of GDP, at the end of 2025. A revised £40.9 billion, or 1.4 per cent of GDP, was recorded a year earlier.
The ONS said net financial inflows and larger price rises on UK liabilities than on UK assets widened that position. A stronger pound against the US dollar cut the sterling value of foreign assets by £175.7 billion.
Other changes not due to prices or exchange rates took a further £173.6 billion off assets, £153.6 billion of it in direct investment.
Later quarterly figures for 2026 show a smaller gap. The underlying deficit, excluding precious metals, narrowed to £11.3 billion, or 1.4 per cent of GDP, in April to June 2026. The previous quarter’s figure was £14.3 billion, or 1.8 per cent of GDP.
Including precious metals, the deficit narrowed by £1.2 billion to £19.9 billion, or 2.5 per cent of GDP. The ONS said lower earnings on direct investment in the UK since the end of 2024 were helping to narrow the deficit in 2026.
The ONS said the figures for all periods remain open to revision. Changes to the current account balance come from methods improvements and updated trade and foreign direct investment survey data.