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Economy

Steep fall in EU exports as Brexit deal creates difficulties for companies

British exports of goods to the European Union plunged by more than 40 per cent in the first month since the UK’s official departure from the bloc.

International trade figures released by the Office for National Statistics (ONS) show that EU exports fell by 40.7 per cent or £5.6 billion in January 2021.

Imports from the continent were also down by 28.8 per cent or £6.6 billion.

The development will heighten fears that the deal negotiated by Boris Johnson at the end of last year has weakened the UK’s ability to trade with EU countries.

Headline exports to all countries were down by £5.3 billion (19.3 per cent) month-on-month, while imports fell by £8.9 billion (21.6 per cent).

This reflects the broader challenges to international trade as a result of the coronavirus pandemic.

The EU export market for food and live animals was particularly badly affected, falling by 63.1 per cent in January.

The ONS says this is potentially because of stricter checks and certifications implemented by the EU at the end of the transition period.

The UK’s total trade deficit widened by £6.7 billion to £12.8 billion in the three months to January 2021.

The widening is due to the fact that imports from all countries increased by £2.4 billion (1.7 per cent), while exports decreased by £4.3 billion (3.1 per cent).

Jonathan Walker, director of policy, North East England Chamber of Commerce said: “The latest national international trade figures are extremely worrying and echo what we are hearing from our members in the North East. Falls in UK exports to the EU are down by over 40 per cent.

“This is the biggest monthly drop in trade figures since the statistics were first recorded in 1997.

“The impact of Brexit has created difficulties for companies in a number of different ways including the need for them to stockpile to avoid supply chain problems.

“Lockdown measures both here and in Europe have also harmed the way businesses are able to traditionally trade.

“Our businesses need Government to provide more support to help them navigate new trading regulations and the Brexit agreement which was implemented, in effect, with only a few days’ notice.”