Trade between Britain and the European Union partially recovered in February after falling at a record pace at the start of the year, official figures show.
Exports to the EU rose by 46.6 per cent to £11.6 billion after a record 42 per cent fall in January when the end of the Brexit transition period disrupted trade. Imports from the EU also rose by a weaker 7.3 per cent, after a fall of 29.7 per cent in January.
A spokeswoman for the Office for National Statistics said: “Exports to the EU recovered significantly from their January fall, though still remain below 2020 levels. Imports from the EU are yet to significantly rebound, with a number of issues hampering trade.”
Trade suffered a big hit in January after the Brexit deal came into effect. Both exports and imports suffered the largest monthly slumps since records began in 1997 as companies grappled with new customs paperwork. British exports were hit harder than imports as the UK offered grace periods to many EU importers.
The latest figures suggest that some of those problems may have been temporary. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “This indicates that Brexit disruptions to goods trade have been overcome quickly.” However, some businesses, such as fresh food exporters, are still reporting considerable disruption.
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Economists said that the improvement in February also reflected a rebalancing in demand after companies brought forward their orders in December to beat the Brexit deadline.
Philip Shaw, economist at Investec, said the latest improvement confirmed “our suspicion that the drop-off in trade at the start of the year reflected firms having brought forward their shipments to avoid possible delays”.
Although trade with the EU has partly recovered, the latest figures show that goods exports to the EU, excluding non-monetary gold and precious metals, are 12.5 per cent below their February 2020 level. Imports, which dropped 19.2 per cent in the year to January, are 11.5 per cent below their February 2020 levels.
Growth in exports to the EU was partly offset by a deterioration with the rest of the world. The UK’s goods export volumes to non-EU countries fell by 7.5 per cent, while imports rose by 14 per cent. The trade deficit widened from £3.4 billion to £7.1 billion.
James Smith, economist at ING, said: “These latest figures suggest that the UK-EU trade situation improved in February. The recovery in exports tallies with what we saw in other data, including traffic across the Dover-Calais crossing. But just as the collapse in trade in January wasn’t totally down to Brexit disruption, we’d caution that the latest rebound in UK shipments to the EU probably doesn’t tell us it was business as usual for firms.”
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Global rebound keeps China’s motor running
China’s exports grew at a robust pace in March as global demand picked up alongside progress in Covid-19 vaccination, while import growth rose to the highest in four years (Robert Miller writes).
The data suggests the world’s second largest economy will continue to gather momentum as it emerges from 2020’s pandemic-led slump, although a lagging consumer rebound and resurgence in coronavirus cases in many countries have raised outlook risks.
Exports in dollar terms rose by 30.6 per cent last month from a year earlier, but at a slower pace from a record 154.9 per cent growth in February.
China posted a trade surplus of $13.8 billion in March compared with February’s $37.9 billion. The country’s trade surplus with the United States slipped to $21.37 billion in March from $23.01 billion in February.
The economist Nie Wen at Hwabao Trust, a subsidiary of China Baowu Steel Group, said: “Strong foreign demand is likely to be sustained throughout the second quarter as the global economy further recovers.”
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The latest figures also show total imports rose 38.1 per year-on-year, the fastest pace since February 2017, on high commodity prices.