By John Elliott and Erica Wong Min of the Bank's Monetary and Financial Statistics Division.
The United Kingdom's external balance sheet currently records assets and liabilities of more than £3.5 trillion. Both sides of the external balance sheet grew sharply during 2003, continuing the marked expansion that has been recorded since the early 1990s. This article examines recent trends within the balance sheet components with reference to the associated financial flows and income. There is a particular focus on data reported by monetary financial institutions. The article discusses some of the problems involved in compiling an external balance sheet, examining two key issues through the estimation of a breakdown of revaluations to outstanding stocks and a discussion of foreign direct investment data. We also report on current domestic and international initiatives aimed at further improving the quality of external statistics.