This article continues the annual series of estimates of the external assets and liabilities of the United Kingdom and gives provisional figures for the end of 1979. These show a net external asset position somewhat larger than a year earlier.
The compilation and presentation of the estimates, which are set out in detail in Table E, are on basically the same lines as in previous articles. There are, however, two noteworthy changes: these are the introduction, for the purpose of these estimates, of a different method of valuing gold in the official reserves (consistent with the methodology used for other assets), and the inclusion for the first time of inward and outward direct investment by banks.
It is important to emphasise the inevitable limitations of an inventory of this nature. First, the coverage of external assets and liabilities is still incomplete. For example, no estimates exist for either inward or outward investment in real estate. Second, where some data are available, difficulties of valuation and problems of identification entail considerable margins of error; indeed, some of the estimates are no more than broad orders of magnitude. Furthermore, some of the estimates are particularly liable to revision.
An inventory of UK external assets and liabilities end-1979