According to July’s release of the Government’s Office for National Statistics (ONS), the UK’s economy shrank by 0.5% and imports also fell by 0.4%.
Nevertheless, one bright light among the gloomy data is mentioned by the international delivery expert Parcel Hero. It is a 4.4% growth of the UK’s goods exports to the European Union (EU) (after taking inflation into account).
According to David Jinks, Parcel Hero’s Head of Consumer Research, Britain’s July exports to the EU soared by £0.5 billion over June, to £15.3bn. However, exports to non-EU countries decreased by £0.2bn (-1.3%). Does it mean that the Brexit-imposed restrictions are now having less impact?
The results can be compared only taking into account the pre-Brexit, pre-pandemic Britain of 2019: comparing July 2019 and July 2023’s results, there has actually been a £1.6bn rise in the value of Britain’s monthly EU exports (without considering inflation).
The Bank of England’s inflation calculator shows that July 2019’s EU exports of £13.7bn were actually worth around £16.6bn today in real terms, but this comparison doesn’t take into account changes in the relative value of the euro, for example.
The fact that Britain’s EU exports have actually fallen year-on-year is more concerning.
However Britain’s exports of fuels grew up by a £0.4bn due to increased exports of crude oil to the Netherlands and France and refined oil to Belgium.
Another example of Britain’s economy doing heavy lifting was a £0.2bn increase in exports of machinery and transport equipment to the EU, mainly contributed by the increase in mechanical power generators and mechanical machinery sales to the Netherlands.
According to Parcel Hero’s analysis, trading issues are setting down for larger exporters shipping to the EU, in spite of new red tape and Customs fees, particularly for products whose components (eg microchips) are sourced outside of the UK.
Nevertheless, the full impact of all the expected Brexit border regulations hasn’t been fully seen yet. There is hope for reaching a pragmatic solution to some of these issues for both the EU and the UK. The scrapping of plans for the controversial “UKCA” CE-replacement mark, on the majority of products, should serve as a good model for the future.
Obviously, a strong concern was caused by July’s drop in exports to non-EU countries, with the USA remaining the UK’s single largest individual overseas market. Despite some significant hurdles in US trade, the UK’s trade with this country has not suffered a similar upheaval.
Tariffs of 0% to 37.5%, with the typical rate being 5.63% are still applied to most UK goods exported to the US that are valued at over $800 (the US import tax threshold).
Source Link