EU will 'respect' Brexit decision says Sir John Redwood
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Trade between the UK and the European Union plummeted in January, according to the Office for National Statistics (ONS). The new data shows exports to the EU fell by 40.7 percent in January, while imports of EU goods dropped by 28.8 percent. Mr Peston described the statistics as “truly shocking”, but suggests there may be an explanation behind the vast change in activity.
He wrote on Twitter: “A big question about today’s truly shocking figures on January’s collapse in trade with the EU is whether the underlying cause is symmetrical or not between the UK and EU: the UK imported less in large part because of stockpiling in the weeks before the end of the transition; but was stockpiling as strong in the EU or have EU businesses started to buy from businesses in other nations?
“This is a vitally important question for our prosperity.”
The ONS states trading levels in recent months have been atypical due to the “practical challenges and temporary factors” of Brexit.
They note November and December 2020 saw an increase in imports and exports of goods, which coincides with Mr Peston’s assumption stockpiling increased in the months leading to Brexit.
The report states: “November and December 2020 saw increasing imports and exports of goods, particularly in machinery and transport equipment and chemicals.
“These increases were consistent with potential stockpiling of goods from the EU in preparation for the end of the EU exit transition period.
“UK goods imports from the EU also peaked in the weeks approaching previous Brexit deadlines in March and October 2019.”
The ONS also points out data from the Business insights and impact on the UK economy bulletin suggests that importing and exporting began to increase towards the end of January.
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It states: “The proportion of businesses reporting that they were unable to export decreased by 5.4 percentage points between the reporting periods 11 January to 24 January and 25 January to 2 February.
“Similarly, the proportion of businesses reporting they were unable to import decreased by 3.0 percentage points between the same reporting periods.
The data, published this morning, shows the 40.7 percent drop in exports to the EU equated to £5.6billion in trade.
The fall in imports saw £6.6billion lost.
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The experts note the fall in goods imports and exports is the largest monthly fall since records began in January 1997.
The fall in imports largely affected machinery, transport equipment and chemicals.
Total imports of machinery and transport equipment fell by £3.3 billion (21.9 percent) in January 2021, driven by a £2.6 billion (30.0 percent) fall in imports from the EU.
Similarly, imports and exports of chemicals fell by £1.7 billion (30.1 percent) and £1.2 billion (25.2 percent) respectively in the same month.
Both of these are attributed to stockpiling ahead of the end of the EU transition period on December 31, 2020.
But the ONS said firms were reporting that trade was getting easier.
It said the number of businesses saying they were unable to export between the middle and the final week of January had fallen by 5.4 percent and those saying they could not import had dropped by 3 percent.
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