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Analysis

UK's external financing needs

by Ben Robinson

Fri 3 Jun 2016

UK's external financing needs Enlarge Chart loading Image

After a vote to leave the European Union, fulfilling the UK’s external funding needs would be a challenging task says Moritz Kraemer, global chief rating officer, sovereign ratings, at S&P Global. Britain’s annual current account deficit, at almost £100bn, is the world’s second largest, after that of the US. At over 5% of GDP, it’s the highest British deficit since 

One way of measuring vulnerability is to analyse an economy’s annual gross external financing needs, defined as maturing long-term debt and the stock of short-term debt of the private and public sectors, including the banks, as a share of current account receipts and official gold and foreign exchange. The UK score is 755%, the highest among all 131 sovereigns rated by S&P Global Ratings. Among the G7 leading advanced economies, the US and France, with the next least favourable rankings, have scores of 318% and 316% respectively.