This article continues the annual series of estimates, in sterling terms, of the United Kingdom's external assets and liabilities, and gives figures for the end of 1976. The compilation and presentation of the estimates follow the pattern of last year's article: both sterling and foreign currency items are included; assets and liabilities are classified as 'public sector' or 'private sector', according to the status of the domestic creditor or debtor; private sector items are grouped under the headings of 'investment' and 'banking and commercial'; and public sector items are treated as in the balance of payments accounts, where reserves and official financing transactions are shown separately from other official assets and liabilities.
Previous articles have emphasised the inevitable limitations to an inventory of this nature, arising from difficulties in valuing investments and from problems of identification. There are, for example, no estimates for UK-owned property abroad, or for foreign-owned property in the United Kingdom, and the estimates of portfolio investment are no more than broad indications of magnitude. Such limitations have been highlighted this year by the revisions subsequently made to the figures published in last year's article - particularly those for direct investment. Although small in relation to total assets and liabilities, the former were revised downwards and the latter upwards, turning a net surplus in 1975 into a net deficit. However, for the reasons given above, this apparent turn-round should be treated with caution: total identified assets and liabilities each amount to some £125 billion, and the margin of error is clearly considerable.
An inventory of United Kingdom external assets and liabilities end-1976