The outlook for UK trade is positive this month. Exports of goods from the UK to EU are reaching new highs, and UK is forging strong trade alliances with Australia, Japan, and the US.
Goods exported from the UK to the European Union (EU) reached its highest level since October 2019 in May this year. After the UK left the EU’s single market in January 2021, a huge slump in exports leaving the UK followed. Experts are hoping this is the reversal of the drop British exporters saw in the first half of 2021.
The pickup began in February with both British and European economies reopening. Despite the growing British presence in the European market, organisations such as the British Chamber of Commerce don’t yet consider it stable, stating that market position was not yet strong enough. Exports to the EU are recovering but are still behind sales in the rest of the world. British business owners have said they have found there is still extra red tape to navigate when trying to sell to the EU because of Brexit.
According to the ONS, (Office National Statistics) exports to the EU (excluding precious metals) grew to £14 billion in May 2021, almost double January’s figures. Total exports (excluding precious metals) came to $27.9 billion, which was the highest since January 2020, before the disturbances caused by Brexit or Covid hit.
Mid-year, imports into Britain from the EU have risen following a decline at the start of the year, caused by Covid and increased disruption to traffic crossing the English Channel. While imports from the EU are on the rise, imports have been growing at a much quicker pace from other countries with China replacing Germany as UK’s biggest import market.
The UK left the EU in January 2020 but stayed within the EU’s Customs Union and the single market for another 11 months while Trade Agreement and Exit Negotiations took place. Soon after the UK left the Customs Union and Single market, the Covid pandemic began to severely disrupt trade. Consequently, it has been difficult to quantify the full extent of the impact caused by Brexit.
The Bank of England expects a long-term decrease in trade between EU countries and the UK, with the UK turning to other regions such as Asia and the USA for trade deals. In this quarter, British exports outside of the EU rose by 8%, and exports to the EU rose by 5%. Imports from countries outside of the EU have risen by 19%, significantly higher than those of the EU.
To read the full publication of the UK’s trade outlook for May 2021, follow this link:
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