This paper analyses the operation and interaction of a STATCOM and a VSC HVDC link located in close electrical proximity in an AC system, taking into consideration of various controller configurations and operating conditions for both components. It is identified that the dynamic behaviour of one component can be substantially affected by a parametric event in the control of the other component whereas little interaction is shown between the two components for an AC system short circuit event. Results also indicate that the operating point of the DC link can deteriorate the transient performance of both the STATCOM and VSC. The study is performed based on a multi-machine dynamic GB system developed from a real reference load flow case to achieve higher fidelity.