The first economic figures from the Office for National Statistics (ONS) since the end of the transition period – published today (12 March) – have revealed that UK exports to the EU dropped 40.7% in January, with imports from the EU falling 28.8%.
Overall, the UK economy shrank by 2.9% in the first month of the year, leaving it 9% smaller than before the beginning of the pandemic.
Biggest decline
According to the FT, the drop in exports represents the biggest decline since comparable figures began being counted in 1997.
Britain’s trade with non-EU countries did not fall to the same extent, leading the ONS to suggest that new rules for trade following the end of transition and stockpiling measures from the end of last year had a significant impact.
The largest decline in exports to the EU was in food products, which plunged 63.6% over the month.
Delays
Three quarters of firms polled in a recent survey by Make UK have faced delays with imports or exports to or from the EU as a result of the end of the transition period.
Ray Singh, managing director of Russel Finex, a London-based manufacturer of sieves and filters, told the Guardian his firm was still experiencing delays with exports to the EU.
“Eventually we manage to get the goods over, but it just takes a lot longer”, he said. “It’s not smooth like it was. There are additional checks and paperwork and it sounds like in a few months’ time that’s actually going to ramp up.”
Catherine Bedford, founder of cycle helmet manufacturer Dashel, said the disruption had tipped her business from profitable to struggling.
“We can’t predict delivery times as items are being held up at French customs, our entry point into Europe,” she said. “There is a massive backlog and items are being turned back despite up-to-date paperwork”.
Assessment
The government announced yesterday it will be releasing a report on the impact of Covid-19 and Brexit on UK trade on 28 April.