Brexit: British exports to Europe fell 41% in January

by



[ad_1]

The UK exported goods worth £ 8.1bn ($ 11.3bn) to the EU in its first month completely outside the bloc, a drop of 41% compared to December, according to the Office for National Statistics. The trade decline is similar compared to January 2020, according to ONS data.

Imports from the bloc fell 29% to 16.2 billion pounds ($ 22.6 billion) in January from the previous month, when UK companies stockpiled goods before the end of the transition period of Brexit. Import and export figures do not include trade in gold and other precious metals.

The fall in activity with its largest trading partner has resulted in the largest monthly declines in Britain’s goods imports and exports since 1997, the ONS said.

“UK trade data for January paints a clear picture: While the free trade agreement for goods that the UK and the EU signed at the end of last year, for the most part put end with four and a half years of uncertainty, it is not holding a candle to free trade without paperwork and other non-tariff barriers the UK once enjoyed under the single market, ”said Kallum Pickering, senior economist at Berenberg .

Since the UK completed its departure from the European Union on December 31, UK exporters have faced new border controls and customs procedures that have delayed shipments to Europe. Prime Minister Boris Johnson’s description of the difficulties as “startup problems” prompted business groups to rebel.

US-UK trade truce means cheaper whiskey for Americans

“External evidence suggests that part of the slowdown in merchandise trade in early January 2021 may be attributable to disruptions caused by the end of the transition period,” the ONS said in a statement Friday. Imports and exports started to increase towards the end of the month, he added.

The ONS said trade has “not been typical in recent months” and called for caution when comparing the report with recent data. The UK also entered a new national coronavirus lockdown in early January, which weighed on economic activity.

Britain’s GDP fell 2.9% in January from the month before, during its expansion, according to the ONS. GDP was 9% lower than levels seen last February, before the coronavirus hit. The service sector was the main drag on growth, while the manufacturing sector suffered its first contraction since April 2020, the ONS said.

Brexit hits fish, cars

A vivid example of what Brexit meant for UK businesses came from the Scottish fishing industry, which was plunged into crisis due to post-Brexit paperwork that meant fresh fish couldn’t reach customers on time and had to be discarded in some cases.

“While the drops in exports and imports are not entirely due to Brexit, they increase the chances that Brexit will have a more lasting influence on trade flows,” said Paul Dales, UK chief economist at Capital. Economics.

According to the ONS, exports of food and live animals, including seafood to the European Union, fell by almost 64% in January compared to the previous month.

Auto trade has also fallen sharply, linked to lower demand, reduced manufacturing and global supply chain issues. Automakers have been hit by a severe shortage of computer chips, leading to temporary production shutdowns and plant closures.

Pharmaceuticals traded with EU countries suffered the largest overall declines in imports and exports, which was likely a consequence of stockpiling for Brexit, the ONS said.

[ad_2]

Source link