UK trade with the EU has bounced back from its historic post-Brexit and lockdown-driven setback in January, according to new economic data published today (13 April).
Exports to the EU increased by £3.7bn compared to January, new figures from the Office for National Statistics have shown, while imports from the EU were up by £1.2bn.
Post-Brexit
This follows the unprecedented 40% drop in exports to the trade bloc in the month following the end of the transition period.
As of New Year’s Day, firms trading between the UK and EU have been required to complete customs declarations and other formalities as a result of the UK leaving the EU customs union.
The figures
The highlights for UK trade in February 2021 (compared with January) include:
- Overall exports up by 9.9% to £24.3bn
- Overall imports up by 8.8% to £35bn
- Exports to the EU increased by 46.6% to £11.6bn
- Imports from the EU rose 7.3% to £17.1bn
- Exports to non-EU markets declined 10.5% to £12.7bn
- Imports from non-EU markets increased by 10.2% to £17.9bn
(Source: ONS)
LSE trade academic Thomas Sampson tweeted that overall UK-EU trade recovered by 20% in February, but reminded followers that figures are still 12% down annually for the month.
Non-EU trade was down by only 1% over the same period.
Health warning
According to the Guardian’s economics editor, Larry Elliott, the figures come with a health warning.
“A combination of Covid-19 and Brexit means it is impossible to draw any firm conclusions about the trend from a single month’s data,” he said.
Exports to the EU remain down 7% on 2020 figures for February, reflecting the difficulties some exporters – especially small businesses – are facing with increased bureaucracy, he concludes.
Normalising
The Telegraph, however, reports analysis by French customs officials claiming that the level of goods moving between the UK and France was “back towards normal in March”.
Imports from Britain to France climbed to 107% of typical levels, once Covid-19 effects were taken into account, the research found. French exports to the UK were back at 96% of normal levels.
Wider growth
Regarding the wider economy the FT reports that UK output was up by 0.4% in February, which is a return to growth albeit by less than the 0.6% expected by economists.
However, with a rapid vaccine rollout ongoing, as well as shops and pubs reopening yesterday, there could be a rapid rebound in the spring.
“We’re looking for a 4-5% bounce in GDP in the second quarter,” said James Smith, economist at ING.
According to the BBC the latest ONS figures show that the economy is 7.8% smaller than a year ago, before the impact of the pandemic.