The latest balance of payments figures also showed that in 1992 Britain recorded its smallest surplus for 12 years on trade in services, such as tourism, transport, insurance and banking. Last year also saw a record deficit on travel and the lowest figure for overseas direct investment by British companies since 1985.
More cheering, the surplus on 'invisible' trade - services, transfers and investment earnings - was pounds 194m higher than first estimated, at pounds 794m in the fourth quarter. The current account deficit was pounds 3.56bn in the quarter and pounds 11.9bn in 1992 as a whole.
The value of Britain's overseas assets rose by pounds 137bn in the last three months of 1992 to end the year at pounds 1,199.2bn. These assets include foreign subsidiaries of British companies, British holdings of foreign shares and bonds, and money lent overseas by British banks and other institutions.
The value of foreign-owned assets in Britain rose by pounds 113.8bn to pounds 1,162.2bn. This left net assets of pounds 37bn, compared to pounds 13.8bn at the end of September. Net overseas assets peaked at pounds 100bn in 1986.
Without the boost to the sterling value of overseas assets from the pound's fall, Britain would have ended the year with net debt of pounds 3bn- pounds 13bn. Britain had a smaller debt in mid-1992 and at the end of 1990, but before then had been a net creditor since the 1940s.
British companies made direct overseas investment of pounds 8.6bn in 1992, the lowest figure since 1985. The 15 per cent fall in direct investment from 1991 reflected the reduced ability of recession-hit British companies to spend overseas. Direct investment in Britain fell from pounds 11.98bn in 1991 to pounds 10.9bn last year.
The figures also showed the Government paying back money it borrowed to defend the pound in the run-up to Black Wednesday - at higher cost because of sterling's fall. The Government reduced its overseas liabilities by pounds 8.8bn in the fourth quarter, having increased them by pounds 7.4bn in the third.Reuse content