Explain the general trends and composition of the UK balance of payments in the last 30 years taking account of redefinition of accounts over this time

The UK balance of payments is a record of all the financial transactions between the UK and the rest of the world. It includes trade in goods and services, investment income, and transfers of money. Over the last 30 years, there have been several changes in the definition of accounts, which have affected the composition of the balance of payments.

One of the most significant changes was the adoption of the International Monetary Fund's (IMF) sixth edition of the Balance of Payments Manual in 1993. This led to a reclassification of some transactions, which had an impact on the balance of payments. For example, the reclassification of some financial transactions from capital to current accounts led to a reduction in the UK's current account deficit.

In the 1990s, the UK had a persistent current account deficit, which peaked at 2.8% of GDP in 1998. This was mainly due to a large trade deficit in goods, which was partially offset by a surplus in services. However, in the early 2000s, the UK's current account deficit narrowed, due to a combination of factors such as a weaker pound, higher oil prices, and increased demand for UK services.

In the aftermath of the global financial crisis of 2008, the UK's current account deficit widened again, reaching a record high of 5.8% of GDP in 2015. This was mainly due to a large trade deficit in goods, which was partially offset by a surplus in services and income. The depreciation of the pound after the Brexit referendum in 2016 helped to reduce the trade deficit in goods, but the current account deficit remains elevated.

In terms of composition, the UK's balance of payments has shifted towards services over the last 30 years. In 1990, services accounted for around 35% of total exports and 28% of total imports. By 2019, services accounted for around 45% of total exports and 35% of total imports. This reflects the growth of the UK's service sector, which includes industries such as finance, professional services, and tourism.

In summary, the UK's balance of payments has been influenced by changes in the definition of accounts, as well as by global economic trends and domestic factors. The UK has had a persistent current account deficit over the last 30 years, which has been driven by a large trade deficit in goods. However, the composition of the balance of payments has shifted towards services, reflecting the growth of the UK's service sector