The UK has run an unexpectedly small balance of payments deficit in the first three months of the year. BBC News Online explains the problems in measuring the UK's trade with other countries, and why it matters.
What is the trade deficit, and why does it matter?
The trade deficit measures the difference between the value of goods Britain imports from abroad and the value of British exports.
Traditionally Britain runs a deficit in its trade in goods, but that is balanced by extra income from trade in services (like insurance, shipping and music royalties) and investments overseas.
However, the trade deficit has been getting worse in recent months, as UK consumers buy more goods made overseas.
UK exports overseas, meanwhile, have been hit by the high value of the pound, which has made them more expensive, and also hit by the slowdown in our main export markets in the United States and Europe.
In the long run, a growing trade deficit puts pressure on the pound, and may force the Bank of England to raise interest to prevent it weakening too much.
What is the balance of payments, and how is it different?
As well as trade in goods, the UK economy receives other income from abroad.
It buys and sells services, such as accountancy, insurance, shipping and banking.
The deficit in goods and services together is the current account deficit.
And when British companies invest abroad, they receive profits from their foreign activities which returns to the UK
Likewise, UK shareholders who buy foreign stocks also receive investment income from abroad.
The total of all these payments is known as the balance of payments, the widest measure of the UK's financial balance with the rest of the world.
However, the balance of payments is only compiled every three months, compared to the monthly measurement of the trade deficit, which just measures manufactured goods.
Why has it suddenly improved?
The main reason for the sharp improvement in the UK's balance of payments is the huge rise in investment income - which increased by £5.5bn in the quarter, compared to a goods trade deficit of more than £7bn.
UK firms have increasingly been investing abroad, and chose to return their profits in that quarter.
And UK shareholders, especially the pension funds, have also turned to investing abroad, anticipating changes in the rules governing where they must keep their funds.
However, the figures on investment income tend to be erratic - and it may be that some firms have chosen to move the money back into their UK accounts in January this year rather than later in the year.
So it may only become clear at the end of this year how much UK investment income has improved overall.
How could it affect the value of the pound?
The Bank of England is worried about the UK trade deficit, which it believes may be unsustainable in the long term.
It says it is a symptom of the imbalances in the UK economy, with a strong domestic economy but a weak, internationally exposed manufacturing sector.
The Bank is worried that eventually this could cause a run on the pound - which would raise the cost of imported goods and cause inflation.
That is one reason it plans to keep interest rates on hold over the next few months.
The strong investment income is a sign that the strategy has at least temporarily worked - attracting investment back into the UK through high interest rates.
However, any sign of a fall-off in investment income could lead to more pressure on the currency, and could force the Bank to raise rates later in the year.