In Q1, the current account deficit increased by GBP6.3bn to -GBP30bn or -5.6% of GDP, the highest level since the Brexit referendum. The widening in the shortfall was mainly due to the trade deficit which more than doubled in Q1 to a record of -GBP20.3bn or -3.7% of GDP (above -3% for the first time since 2002). Import growth reached a record high of +6.8% q/q in Q1 (in volume terms) on the back of contingency stockpiling by companies and households in terms of semi-manufactured goods, finished manufactured goods, food, beverages but also from accelerating gold imports which are not a reserve asset at the Bank of England. Looking at the financial account, direct investments have registered the largest net outflow since Q3 2017 (-GBP139.7bn) while portfolio investments registered their highest net outflow since Q3 2012. We expect the Brexit-related uncertainty to increase in Q3 ahead of the 31 October deadline which will accelerate contingency stockpiling and capital outflows. The current account deficit should remain above -5% of GDP in 2019.