This article, another in a series of explanatory articles designed for the general reader, describes and analyses the contribution of the services account to the UK balance of payments.
- Since the late 1960s, services have been replacing interest, profits and dividends as the major contributor to the 'invisibles' surplus.
- Growth of the services surplus was particularly rapid from 1973 to about 1978, reflecting in part buoyant overseas incomes and trade and sharply improving UK price competitiveness. Financial and 'other' services made a significant contribution to this growth, as did the combined travel and civil aviation surplus up to 1977.
- Subsequently, the surplus has risen more moderately, and this slower growth may continue for the next few years.
- 'Other' services have continued to grow strongly since 1978, but the surplus on travel and civil aviation halved between 1978 and 1980.
- The sea transport account has remained, perhaps fortuitously, remarkably close to balance.
- In real terms, the surplus has recently been contracting.
Services in the UK balance of payments