As well as these current transactions, there are flows of money for investment purposes.
This includes funds from both the public and private sectors and long-term and shortterm
monetary movements.
Long-term capital transactions include:
● overseas investment in the UK (e.g. purchase of shares, acquisition of real assets, purchase
of government securities by non-residents);
● UK private investment overseas, where UK residents buy shares, acquire real assets,
etc., in overseas countries. The capital account does not include interest, dividends or
profits but only flows of money for investment purposes. A capital transaction can
give rise to a current flow in the future. If a non-resident bought shares in a UK company,
the initial amount would appear on the capital account. The resulting flow of
dividends paid in the future would be recorded as a flow on the invisible account;
● official long-term capital, i.e. loans from the UK government to other governments.