Accordingly National Statistical Office (ONS), UK merchandise exports to the European Union fell 40.7 per cent in January. Imports decreased.
These are the first numbers since the introduction of new trade rules between the United Kingdom and the European Union. The BBC’s Office for National Statistics reported that the sharp drop in trade is likely due to temporary factors. Meanwhile, new data showed that the British economy contracted by 2.9% in January. It happened when the third lockdown went into effect. Consequently, the economy is 9 percent smaller than it was before the start of the epidemic.
The health sector makes up for the blows
According to the Office for National Statistics, the downturn in January was a great hit, but less than some had expected. All retailers, restaurants and hairdressers have been affected by the recent closure. “The manufacturing sector also saw a decline for the first time since April, with auto production in particular declining dramatically,” ONS’s Jonathan Atho said.
“Nevertheless, the increases in the health sector due to the introduction of vaccines partially offset the declines in other industries,” he continues. This increased economic activity in the healthcare sector by 8.7%.
Light at the end of the tunnel
Ato also pointed to a decline in imports from the European Union. The data showed that it was down by 28.8%. However, other data from the US indicates that trade levels will begin to recover at the end of this month. Companies have built up stocks in the run-up to the end of the Brexit transition period. They may have used these supplies in January rather than buying new goods.
The end of that transition period came at a time when a new type of Coronavirus appeared in the United Kingdom, forcing truck drivers to pass tests to cross the border at the canal.
Significantly, goods exports to the European Union decreased by 5.3 billion pounds in January. Imports fell again by 8.9 billion pounds. The latter occurred mainly in the import of automobiles, medical and pharmaceutical products, and chemical products and machinery. However, there is light at the end of the tunnel: Companies report that trade is starting to flow more smoothly.