UK current account deficit holds at near record levels

The UK's current account deficit came in at a near record £32.6bn ($43.9bn,€39.4bn) at the end of the first three months of the year, said the Office for National Statistics (ONS).

The reading represents 6.9% of gross domestic product (GDP), just below the all-time high of 7.2% set in the fourth quarter of 2015. Economists had expected the deficit – the difference between money coming into the UK and money sent out – to stand at around £28bn.

Analysts at the Royal Bank of Scotland described the size of the deficit as "whopping".

Separately, the ONS also said the British economy grew by 0.4% during the first quarter, unrevised from earlier estimates.

Both of these figures do not take in the full impact of the UK's shock Brexit vote on 23 June, with many economists expecting the British economy to enter a significant slowdown.

Joe Grice, chief economist at the ONS, said: "There is very little evidence of a 'referendum effect' in the data, though the vote was not called until more than halfway through the quarter."

However, IHS Global Insight chief UK economist Howard Archer said: "Another horrible current account performance as the deficit remained as high as £32.6bn, 6.9% of GDP, in the first quarter of 2016. This was only slightly down from the record shortfall of £34bn, 7.2% of GDP, in the fourth quarter of 2015."

The vote to leave the EU last week has raised concerns about Britain's current account, with economists warning that foreign investors may be less willing to finance the shortfall by investing in the UK.

Bank of England Governor Mark Carney has described this as Britain's increasing reliance on "the kindness of strangers".

Chancellor George Osborne also warned during the referendum campaign that leaving the EU could trigger a balance-of-payments crisis. Uncertainty surrounds the UK's future trade terms with the EU – the destination for almost half of British exports.