UK exports to EU rebound partially after January’s slump

Trade between the UK and EU partially recovered in February, after a steep drop in January following Brexit.

Official figures show exports to the EU jumped 46.6%, although that followed January’s 42% slump as firms struggled with new trade rules.

Imports from the EU, too, picked up, albeit by a weaker 7.3%, after falling 29.7% in January.

Separate figures from the Office for National Statistics (ONS) showed the UK economy grew by 0.4% in February. However, the ONS said the economy was still 7.8% smaller than a year earlier, before the impact of the pandemic. Covid restrictions remained in place to varying degrees across all four nations of the UK during January and February.

“The economy showed some improvement in February after the large falls seen at the start of the year but remains around 8% below its pre-pandemic level,” an ONS spokesperson said.

“Exports to the EU recovered significantly from their January fall, though still remain below 2020 levels. However, imports from the EU are yet to significantly rebound, with a number of issues hampering trade.”

The ONS said it was too early to make any conclusions about the impact of the new trading arrangements with Europe.

After a 42% plunge in January in sales to the EU, February’s bounce back of 46.6% is the more the kind of figure the government would like associated with Global Britain’s new trading era.

But just as the earlier figures weren’t conclusive evidence that the new arrangements for trading with Europe posed a widespread sustained problem, the latest ones don’t mean it’s back to business as usual either.

Many companies avoided sending goods across the border in the previous month, for fear of disruption or delay, having shipped orders ahead of time where they could. Both January’s fall and February’s rebound were led by non-perishable items – chemicals, machinery – which are easily stockpiled . That trade resumed in February, while many other exporters managed to get to grips with the new formalities.

But export levels remain below where they were for much of 2020, and anecdotal evidence suggests some exporters – particularly those of fresh foods – remain overwhelmed by the new checks and forms. They are urging the government to help simplify processes. Meanwhile the pandemic continues to weigh on demand.

With the EU typically buying more than two-fifths of British exports, tackling remaining issues will be instrumental to getting the economy back on its feet.

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