ABSTRACT
In the social accounting system the rest of the world is treated as a sector alongside the domestic sectors. This chapter presents an account of the rest of the world's current transactions with the domestic sectors in National Income and Expenditure; and describes the United Kingdom balance of payments on current account. If the United Kingdom has a surplus on current account in any year foreigners through the ordinary processes of trade and transfer have on balance incurred debts with the United Kingdom. Thus the United Kingdom has on balance invested abroad. The difference between total receipts and total payments is the surplus on current account. In 1952 foreigners reduced their holdings of sterling and consequently the United Kingdom gold and dollar reserves declined. In 1953 and 1954 the reverse movement occurred and foreign currencies flowed back to the United Kingdom.
