Hamish McRae: It takes more than a few summer hols at home to save the national accounts

Gone abroad for your hols, then? Reading this on-line on your laptop by the pool? Or, like so many other Britons, is this the year you've stayed close to home?

If you are spending sterling rather than foreign currency, you will be making a modest contribution to narrowing the balance of payments current account deficit. We spent some £38bn abroad last year but only received £20bn from foreign tourists over here, a deficit roughly four times the size of that on motor cars. We still import more cars than we export, but there the gap is narrower than it has been for more than a decade.

The gap in tourism seems to be narrowing this year too. The latest figures we have are the three months to the end of May, and during that time, spending by foreign visitors to the UK increased by 6 per cent to £4.1bn while spending by Britons abroad fell by 8 per cent to £7.9bn. So while there is still a big gap, it's smaller than it was a year earlier.

But last year's current account deficit actually showed a remarkable improvement – the gap was down to 1.7 per cent of GDP. What had appeared to be an unmanageable problem, contributing to what seemed to be an ever-weakening pound, looks under reasonable control.

The balance of payments numbers came out on Friday in the annual "Pink Book", so-called because it has a pink cover. It is a big, thick document detailing what has been happening to the balance of payments for the previous year. It is an absolute treasure trove because it gives you a feeling for the competitiveness of the entire economy, for the demand for different goods and services, and for the structure of how we pay for our way in the world.

Some big numbers first.

In physical trade in goods, we import an awful lot more than we export: £344bn vs £251bn. Against that, we export a lot more services than we import: £264bn against £237bn. So we earn more exporting services than we earn exporting goods – something many people find hard to understand. You have to deduct a net £10bn that the Government spends abroad, which includes fees to the EU and the cost of keeping troops abroad, but we have a net investment income of some £28bn. The overall result is a current account deficit of £25bn, which in the context of a £1.4trn economy is pretty much all right.

The balance of payments has to balance – that is an accounting fact – so the annual current account deficits are covered by capital inflows of some sort or other. We do have a lot of genuine inward investment; but if we sell gilts to overseas holders, that in accounting terms is an inward investment, too. By and large, we have covered our current account gap with real investment rather than attracting hot money inflows. The US, which has been running a much larger current account deficit than we have, has been relying on these inflows, with its government debt increasingly held by China and Japan.

In the detail of the figures can be found encouraging news and troubling signs. An encouraging bit of news is that the financial services industry had a larger export surplus last year than ever before: it was nearly £39bn, up from £32bn the previous year and some four times the level 10 years earlier. That is pretty amazing, isn't it? In the year of collapsing markets, nationalised banks, Lehman Brothers, and reports that the country will have to rely much less on the City for its earnings in the future, the Square Mile manages to bring in not just more foreign earnings that ever before, but much more.

But I have a worry. It is that last year was a year of two halves. The first half was the tail-end of the boom, with output only really collapsing in the third quarter onwards. Without a quarterly breakdown of the numbers, it is impossible to tell whether and to what extent financial earnings have been damaged by the market mayhem. We won't know for another year, but it would indeed be remarkable if the City's foreign earnings this year turn out to be as high as last.

There is a further issue. The surplus on our investment income last year, that £28bn noted earlier, was also an all-time record. Most of that comes from foreign direct investment, basically overseas subsidiary companies, rather than portfolio investment, so I suppose you might expect it to be more secure than investment in shares and bonds. But the collapse of world trade must surely have damaged these earnings, so they may not be too secure after all.

My take on all this is that the balance of payments last year was in much better shape than I had expected. Not only did the deficit narrow, but there was also a correction for 2007, which as a result showed a smaller deficit than previously thought. So what looked like a long-term alarming deterioration of the current account from a balance in 1997 to a deficit heading towards 4 per cent of GDP now looks pretty much OK.

That leads to two obvious questions. Will this improvement be maintained in the very different economic circumstances of this year? And has the much-criticised strategy, if you could call it that, of switching from manufacturing to services left the economy more exposed or less exposed to a global slump?

As far as the first is concerned, I don't think we can say. Financial markets seem to be recovering their cool, albeit from a high degree of panic a few months ago. A fair bit of corporate finance activity is going on. And a lot of money is around, much of it in foreign sovereign wealth funds, that has to be invested somewhere. Finance as an industry is not going to disappear. But in terms of employment, at least, it is a smaller industry now than six months ago. This year will be a real test; it is hard to be truly confident.

The other question will also take time to answer. I used to think the UK was taking an inherent risk in allowing itself to become so reliant on a single industry. We had too many eggs in one basket. But looking at those numbers, I feel somewhat comforted. If last year the surplus was bigger than ever before, then that's not bad. If this year the City thumps out another decent surplus, maybe smaller than last, it would suggest that while in theory no country should be too over-reliant on anything, in practice the danger may be less than feared.

Besides, this should surely be a world of both/and rather than either/or. The UK exported nearly twice as many cars last year as it did in 2001. When the industry recovers, there is no reason to believe that it will not carry on improving. And if these exports are helped by the more competitive pound, so be it – even if the pound makes more of us stay at home this summer. I shall spend this week in Scotland which, for now at least, uses pounds rather than euros.

Here's a very different global recovery – led not by the US, but by Asia

Anyone who had expected the US economy to bottom out in the second quarter seems to have been proved wrong. The preliminary numbers suggest it continued to contract, albeit at a much slower rate, just 1 per cent. That is annualised so the actual contraction was 0.25 per cent. That was somewhat better than the market had forecast so was greeted with mild relief. If you couple this news with signs that the US housing market is picking up at last you could say that the economy is probably bottoming out and that it ought to be growing again by the end of this year, maybe sooner. The big fiscal stimulus package is starting to kick in and you would expect consumers, while still battered, to start to take a little comfort if the housing market continues its modest recovery.

What should we make of this here? The first thing to say is that the recovery from this global downturn will not, unlike previous recoveries, be led by US consumers. Their debts are being paid off and they are saving again but this has been such a scarring experience that they won't snap out of it fast and go back to the big-spending days. Since some 70 per cent of the US economy is consumption, that means that US growth will be muted for a couple of years at least. On a long view, that is fine; indeed, it's a necessary adjustment. But from the point of view of the rest of the world, it means a slow recovery, led by Asia rather than the US. This will be the first global recovery ever to be driven by Asia.

That probably means a slower recovery for the UK and Europe and a faster one not just for most Asian economies but for raw-material producers too. As Asian demand continues to climb that will push up demand for energy and commodities, which will have the effect of damping demand in Europe and North America. In previous cycles, oil consumers benefited from a plunge in energy prices; this time, that looks less likely. All of this suggests that the general view is right: digging out of this one will be a slow business for the developed world, even if the emerging economies are racing ahead already.