In January, the first month after Brexit, exports of goods from the UK to the European Union dropped by nearly 41%, the biggest monthly fall in Britain’s imports and exports trade since 1997.
Statistics from the Office for National Statistics (ONS) show that overall exports from the UK fell by £5.6bn – 19.3%, caused by 40.7% fall in exports of goods to the EU.
According to the figures, imports also dropped, by £8.9bn overall (21.6%), while imports from the EU dropped by £6.6bn (28%). Even a 1.7% or £200m rise in non-EU exports could not make up for the decline within the bloc.
Food and live animal exports was hit the hardest by Brexit, with exports dropping by 63.6 percent in January.
Experts believe the magnitude of the drop in January trade is unlikely to be irreversible because evidence suggests companies stockpiled goods ahead of the Brexit deadline, reducing the need to send as many shipments as usual in January. The ONS said there were signs of trade picking up at the end of the month.
The end of the transition period of Brexit also coincided with the spread of a new variant of Covid-19 in the UK as another national lockdown was imposed at the beginning of the month. Since then, other measures have shown that trade levels have in part recovered.
Brexit have also undoubtedly affected cross-border trade. Business experts are warning that lengthier delivery times and higher costs are likely to happen. The government was also forced to postpone the implementation of additional post-Brexit import checks by six months on Thursday.
A UK government spokesman said a “unique combination of factors” such as Covid lockdowns across Europe, stockpiling last year and business adjusting to the new trade relationship made it inevitable that exports to the EU would be dropping this January.
“This data does not reflect the overall EU–UK trading relationship post Brexit and, thanks to the hard work of hauliers and traders, overall freight volumes between the UK and the EU have been back to their normal levels since the start of February,” he said.
British Chambers of Commerce (BCC) head of economics Suren Thiru said: “While changes in data collection limit historic comparisons, 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 also said, the challenges faced by companies on the ground go well beyond teething issues, and trade is likely to be a burden on UK economic growth in the first quarter of 2021 if disruption to UK-EU trade flows persists.
