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Balance of Payments 1) The Balance of Payments is the resultant of all the goods (visible) and services (invisible) purchased and sold between the residents of the UK and the rest of the world. The transactions are calculated in to a sum called the balance of payments - this is calculated and should equal '0' - if not a small balancing amount is added. The country is defined a 'net lender to' or a 'net borrowing from' depending if there is more money (in terms of goods and services) going in or out of the country. If there is a deficit in the current account then this will mean that the UK is importing more than it is exporting to the rest of the world. Deficits lead to overseas debts, these debts increase with time because of interest. Even though debts are accumulated economic growth counteracts this as it is easier to combat...

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