This article, which continues an annual series, examines changes in external assets and liabilities recorded in 1987, and indications for 1988. In particular, the article considers the impact of changes in asset prices on the external balance sheet, showing that exchange rate movements accounted for most of the reduction in recorded net identified external assets during 1987. The implications of the balancing item for the net asset level and the current account are also addressed. Some international comparisons of recent trends in external wealth are drawn and recent capital flows and flows of interest, profit and dividends are also discussed.
The external balance sheet of the United Kingdom: recent developments