U.K. Export and Imports fell by 40.7% and 28.9% to E.U. in January 2021
As per the latest data shared by the Office for National Statistics (ONS), United Kingdom (U.K.), the exports to European Union (E.U.) fell by 40.7% in January 2021 and imports by 28.8%.
This is the biggest drop in export and import since records began in 1997. The value of goods exported from the UK. to the E.U. fell by £ 5.6 billion in January 2021 and imports from the E.U. dropped by £ 6.6 billion.
The new data also showed the UK economy shrank by 2.9% in January amid the third lockdown. The economy is 9% smaller than it was before the start of the Coronavirus (COVID-19).
Taking it to twitter, ONS tweeted,
GDP fell by 2.9% in January, remaining 9% below its pre-pandemic peak.
— Office for National Statistics (ONS) (@ONS) March 12, 2021
Services fell 3.5% (10.2% below), manufacturing fell 2.3%, (5.7% below) while construction grew 0.9% (2.6% below) https://t.co/CPS46SeCzV pic.twitter.com/W8b6LrCcEA
It further tweeted,
The underlying total trade deficit fell £3.7 billion to £1.9 billion in January:
— Office for National Statistics (ONS) (@ONS) March 12, 2021
▪️ goods exports fell £5.3 billion, with EU exports falling £5.6 billion
▪️ goods imports fell £8.9 billion, with EU imports falling £6.6 billion
➡️ https://t.co/XneHYpEn3B pic.twitter.com/TWTh4iBYsc
As per the ONS, the biggest drop in imports were seen in machinery, transport equipment and chemicals. Car imports, medicinal and pharmaceutical products were also affected.
According to the accountancy firm – KPMG, Brexit is the reason for this fall in trade. The end of temporary trading arrangement between the U.K. and the E.U., the complex export-import processes and the fear of new U.K. found COVID-19 strain, added to the woes. The lorry drivers had to take COVID-19 tests before crossing the border at the English Channel.
Fresh-food exporters were hit particularly hard by new border controls with the seafood industry witnessing a drop of 83% in sales to Europe. Besides, U.K.’s non-E.U. trade grew by 1.7% in the dame period. China, Japan and Singapore were its major trading partner.
This is the first time ONS has shared figures post-Brexit transition. However, the ONS said data showed that things had begun to pick up. Firms were reporting that trade was getting easier and trade levels started to recover towards the end of the month. The number of businesses saying they were unable to export between the middle and the final week of January had fallen by 5.4%. Traders saying they could not import had also dropped by 3%.
Speaking on the occasion, the Head of Economics at the British Chambers of Commerce – Suren Thiru said, “The significant slump in UK exports of goods to the EU, particularly compared to non-EU trade, provides an ominous indication of the damage being done to post-Brexit trade with the EU by the current border disruption”
He further added, “The practical difficulties faced by businesses on the ground go well beyond just teething problems and with disruption to UK-EU trade flows persisting, trade is likely to be a drag on UK economic growth in the first quarter of 2021.”
The Government, however, doesn’t seem to be too impressed with the data. A Government spokesperson said that this data does not reflect the overall E.U.-U.K. trading relationship post Brexit.
Some of the drop in both imports and exports may be attributable to firms on both sides of the channel stockpiling ahead of the end of the Brexit transition period.
