Brexit blamed as UK misses global trade rebound

0

UK goods exports underperformed the rest of the world, which experts said was a sign that Brexit could limit the country’s trade performance.

The volume of UK goods exports fell 14% in the three months to January compared to the same period in 2020, before the pandemic, according to the World Trade Monitor published Friday by the Netherlands Bureau of Analysis. economic policy, known as the CPB. . This contrasts sharply with the global average of an 8.2% increase over the same period.

The data, which incorporates data from the Office for National Statistics for the UK, also showed that Britain compared poorly with the performance of all advanced countries where exports of goods increased by 5%.

The analysis also showed that the UK underperformed over the long term as it was the only country tracked by the CPB where exports of goods remained below the 2010 average.

“While most other advanced economies have seen a strong recovery in trade, UK exports remain below pre-pandemic levels,” said Jonathan Portes, professor of economics at King’s College London.

This week, the Office for Budget Responsibility warned that UK trade ‘has lagged behind the domestic economic recovery’ and has ‘missed much of the global trade recovery’. . . suggesting that Brexit may have been a factor”.

As a result, the UK has become a less trade-intensive economy, which is expected to lose 4% of its productivity over the next 15 years, he added.

The OBR noted that “none of the new free trade agreements or other regulatory changes announced so far would be enough” to have a significant impact on its forecast for UK trade. He estimated that leaving the EU would cause the UK’s total imports and exports to fall by 15% compared to if Britain had remained a member of the EU.

Trade intensity of GDP Trade to GDP ratio, 2019 = 100 Three lines G7 minimum excluding UK G7 maximum excluding UK The UK G0536_22X

Earlier in the month, Michael Saunders, an external member of the Bank of England’s monetary policy committee, said Brexit had “reduced the openness of the economy, in trade and labor mobility ‘work’, which reduced the extent to which capacity pressures could be alleviated by imports and immigration. .

A bi-weekly ONS survey released on Thursday showed more than half of UK businesses that had changed their supply chain had switched to more domestic sourcing since the end of the Brexit transition period in January 2021.

Paul Dales, chief UK economist at Capital Economics, said UK trade data was complicated by changes in methodologies, but “the bigger picture [was] who exports [were] are still struggling to recover from Brexit and the pandemic.”

Gabriella Dickens, an economist at Pantheon Macroeconomics, backed the OBR’s view that UK trade will remain “weak” over the medium term.

“Export growth is expected to remain slow,” she said, as UK exporters continued “to be slowly cut off from global supply chains, due to the additional administrative burden for European businesses to to supply goods to Great Britain”.

Newsletter Britain after Brexit

Keep up to date with the latest developments, post-Brexit, with original weekly insights from our public policy editor Peter Foster and the FT’s senior editors. register here.

Share.

Comments are closed.