Exports of UK goods to the European Union dropped by more than two-fifths in January as the Brexit transition period came to an end.
New figures from the Office for National Statistics (ONS) show that overall exports from the UK fell by £5.6 billion – 19.3 per cent.
It was driven by a £5.6 billion, or 40.7 per cent, plunge in exports of goods to the EU, the ONS said.
Imports also fell, by £8.9 billion overall (21.6 per cent), while imports from the EU dropped £6.6 billion (28 per cent), the figures show.
GDP fell by 2.9% in January, remaining 9% below its pre-pandemic peak.
— Office for National Statistics (ONS) (@ONS) March 12, 2021
Services fell 3.5% (10.2% below), manufacturing fell 2.3%, (5.7% below) while construction grew 0.9% (2.6% below) https://t.co/CPS46SeCzV pic.twitter.com/W8b6LrCcEA
Transition period
The end of the transition period coincided with the spread of a new strain of Covid-19 in the UK, causing lorry drivers to need tests to cross the border at the English Channel.
Another national lockdown was also imposed at the beginning of the month.
Since then, other measures have shown that trade levels have in part recovered.
Companies had been stockpiling ahead of the end of the transition period, and may also have been using their stock instead of buying new goods in January.
Because the value of imports fell more than exports in January, the trade deficit for the month narrowed by £3.7 billion to £1.9 billion.
Economy ‘in reverse’
Meanwhile the UK economy as a whole shrank again in January as the latest round of national lockdowns and restrictions over the Covid-19 pandemic took hold.
Gross domestic product (GDP) declined by 2.9 per cent month on month in January, reversing a rise of 1.2 per cent between November and December, the Office for National Statistics (ONS) said.
GDP remained 9 per cent below its pre-pandemic levels in January.
The services sector took the brunt of the fall, shrinking by 3.5 per cent in January as rafts of hospitality and leisure firms were forced to shut due to new lockdown restrictions.
The sector is now 10.2 per cent smaller than it was in February 2020, before the impact of the pandemic was first fully felt.
Construction grew by 0.9 per cent during the month as its recovery continued and new work came in.
But the production sector fell by 1.5 per cent in January 2021, after manufacturing contracted for the first time since last April – down 2.3 per cent – according to the figures.
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