A method of compressing a video signal. The method comprises: for each of a plurality of image portions, transforming from a spatial domain representation into a transform domain representation; and for each of a plurality of target image portions to be encoded, determining a respective reference portion, determining a prediction of the target image portion based on the reference portion, and encoding the target image portion based on the prediction. The prediction comprises predicting a non-lateral motion of the target image portion relative to the reference portion based on processing of their transform domain coefficients. The encoding comprises generating an encoded bitstream comprising information about the non-lateral motion for use by a decoder.