Trade between the UK and the EU is crashing after Brexit and damaging the British economy

Britain’s trade with the European Union collapsed in January when Britain’s departure from the bloc and widespread coronavirus restrictions dealt a double blow to the country’s struggling economy.

Exports of goods to the EU fell by 40.7% compared to a month earlier and imports fell by 28.8%, the Office for National Statistics said on Friday. The figures contributed to a decline of 2.9% from month to month in total economic output.

Britain left the European single market on 1 January, ending almost half a century of free trade and triggering tariffs, increased paperwork and border delays on both sides of the English Channel. While the fall in trade was magnified by storage before the new rules, economists said the extent of the downturn reflected disturbances caused by Brexit.

“The significant decline in UK exports of goods to the EU, especially compared to non-EU trade, provides an ominous indication of the damage to post-Brexit trade with the EU by the current border disturbance,” said Suren Thiru, chief economist for the UK Chambers of Commerce. “The practical difficulties for companies on the ground go far beyond just child problems.”

Overall, UK exports fell 19.3% and imports fell 21.6%, the biggest monthly decline since records began in 1997, ONS said. Shipments to countries outside the EU increased slightly and imports from countries outside the bloc decreased by about 8%.

Prime Minister Boris Johnson has backed Brexit, saying it would allow Britain to regain control of its laws, borders and fisheries, while helping Britain negotiate free trade agreements with countries outside the bloc.

But the EU is the UK’s closest and largest trading partner and accounts for more than 40% of exports. Brexit critics say it will be very difficult for trade with other countries to counteract the effects of increased trade barriers with the EU.

The government said on Friday that the figures for January do not reflect the current state of trade with the EU and that the total volume of goods has been back to “normal levels” since the beginning of February.

“Many companies have adapted well, and our focus now is to ensure that all companies that still face challenges receive the support they need to trade effectively with the EU,” the government said in a statement.

ONS said that preliminary data showed that trade began to improve at the end of January.

“It is too early for a final reading of the Brexit effect, with some evidence of storage before the deadline and signs of some recovery towards the end of the month indicating that the picture may be quite more positive after the first dust has settled,” Richard Hunter, marketing manager at Interactive Investor, said in a note to customers.


This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More