Imports from the bloc fell 29% in January to £ 16.2 billion ($ 22.6 billion) compared to the previous month, when British companies stockpiled goods before the end of the Brexit transition period. The import and export figures do not include trade in gold and other precious metals.
The ONS said the operations with its largest trading partner led to the largest monthly decline in Britain’s overall imports and exports since 1997.
Since the UK completed its departure from the European Union on 31 December, British exporters have had to contend with new border controls and customs processes that have delayed shipping to Europe. Prime Minister Boris Johnson’s description of the problems as ‘dental problems’ has resulted in business groups pushing back.
“External evidence suggests that the slower trade in goods in early January 2021 may be due to the disruption at the end of the transition period,” the ONS said in a statement on Friday. Imports and exports increased by the end of the month, he added.
The ONS said trade ‘had not been typical over the past few months’ and insisted that the report be compared with recent data. At the beginning of January, the United Kingdom also undertook a new national coronavirus exclusion, which weighs on economic activity.
UK GDP fell by 2.9% in January compared to the previous month when it expanded, according to the US. GDP was 9% below the levels seen last February, before the coronavirus hit. The services sector had the greatest pressure on growth, while manufacturing suffered its first contraction since April 2020, the ONS said.
Brexit knocks fish, motors
One clear example of what Brexit meant to British companies comes from the fishing industry in Scotland, which was thrown into a crisis by a red tape after Brexit, meaning that fresh fish could not reach customers on time and in some cases had to be dumped.
“While the dip in exports and imports was not entirely due to Brexit, it does increase the chances that Brexit will have a longer lasting impact on trade flows,” said Paul Dales, chief economist at the UK Economy at Capital Economics.
According to the ONS, exports of food and live animals, including seafood, to the European Union decreased by almost 64% in January compared to the previous month.
Pharmaceutical products traded with EU countries experienced the largest decline in imports and exports, which was likely due to stock preparation for Brexit, the ONS said.