1) The UK current account is one of the main categories in the Balance of payments.
The current account measures the flow of expenditure on goods and services. This gives a generally idea of the country income accumulated and lost from trading.
It includes:

1:Balance of trade in goods
This is the difference between the domestic output and domestic demand.
The difference between what goods a country produces internally and what it buys from foreign markets. It measures the value of goods exported minus the value of goods imported. It is expressed in a country's own currency.

2:Balance of trade in services
This is the difference between the domestic output of services and domestic demand.
Services are now more important than manufactured goods. The UK has strong services in the areas of: finance, ICT services and Insurance. However some of our services are not internationally transferable.

3:Net income flows
Investment in capital from multinational companies. This means money can invest in capital in other countries, which is an outward capital flow.

4:Net current transfers

2) The balance of trade has changed in recent years due to the development of oil and gas fields in the north seas the UK has been a net exporter of oil. However soon as the fields are depleted we will be a net importer of oil and gas again. The UK exports more services than it imports. However a large amount of services that were previously produced domestically are being imported.

3) Long-Term capital flows are dividable into direct investment which involves the acquisition of real productive assets such as factories located in other countries. This includes mergers and takeover.
The other section is Portfolio investment flows which involve the purchase of financial assets e.g. documents instead of physical assets.

4) Capital flows involve the enlargement of stock of capital assets located in other countries. Outward capital flow generates inward investment.
Net income flows show the difference between inward and outward profit flows resulting from capital investment.
The UK's net income flows can be derived from the capital flows. If money flows to make more profitable assets overseas. When the investment is complete the capital runs in the opposite direction. There has to be a capital flow of investment to reach income flows.

9) A deficit means the UK is investing more than it is saving and is using resources from other economies to meet its domestic consumption and investment. For example, let us say an economy decides that it needs to invest for the future (to receive investment income in the long run), so instead of saving, it sends the money abroad into an investment project. This would be marked as a debit in the financial account of the balance of payments at that period of time, but when future returns are made, they would be entered as investment income (a credit) in the current account under the income section.

The deficit could also signify increased foreign investment in the local market, in which case the local economy is liable to pay the foreign economy investment income in the future.
a deficit could also stem from a rise in investments from abroad and increased obligations by the local economy to pay investment income . Investments from abroad usually have a positive effect on the local economy because, if used wisely, they provide for increased market value and production for that economy in the future. This can allow the economy eventually to increase exports and, again, decrease its deficit.

A deficit is not necessarily a bad thing for an economy, especially for an economy in the developing stages, an economy sometimes has to spend money to make money. To run a deficit intentionally, however, an economy must be prepared to finance this deficit through a combination of means that will help reduce external liabilities and increase credits from abroad.

10) Paying off deficits is usually through capital flows, short term capital flows for small deficits but these do not produce enough income flow for large deficits for large deficits, and long term capital flows are income for the future. Therefore money needs to found by investment from other countries. High interest rates will attract foreign investors and they will reduce demand in the economy.

11) It shows the shape of the trend of the trade balance following a devaluation.