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Exports to EU bounce back easing fears of a Brexit trade crisis

Exports to EU bounce back: Revival in shipments of cars and fish eases fears of a Brexit trade crisis

British exports to the European Union are bouncing back – easing fears that Brexit has done permanent damage to trade.

Official figures showed goods exports to the EU rose by 8.6 per cent to £12.7billion in March, close to the £13.6billion recorded in December and above the £7.9billion seen in January after the UK finally left the bloc.

The rise was driven by a revival in the exports of cars and live animals – including fish and shellfish – as businesses adjusted to life post Brexit. 

Brexit boost: Official figures showed goods exports to the EU rose by 8.6 per cent to £12.7bn in March, close to the £13.6bn recorded in December and above the £7.9bn seen in January

The Office for National Statistics, which published the figures, said exports to the EU ‘are now almost back to their December level’.

Matt Hughes, statistician at the ONS, said: ‘There’s been a recovery in February and March. Businesses have got used to the border requirements, namely trade documentation and additional paperwork. The car market recovery has helped.’

The report undermines claims that Brexit has caused permanent damage to trade between the UK and EU.

However, in a sign of ongoing disruption, the ONS said imports of goods from the rest of the world are now higher than from EU countries for the first time since records began in 1997.

Imports from non-EU countries totalled £54.7billion in the first quarter of the year, while imports from the EU were worth £50.7billion.

Ruth Gregory, an economist at Capital Economics, said the trade figures showed ‘the UK’s goods export values to the EU have now almost reversed January’s 43.2 per cent plunge after the Brexit transition period ended’. 

But she added: ‘Imports from the EU have continued to lag behind.’

The recovery in export figures helped boost the economy, with output rising by 2.1 per cent in March.

It was the strongest month of growth since last August, when spending was fuelled by Chancellor Rishi Sunak’s Eat Out to Help Out discount meals scheme.

It means that GDP shrank by only 1.5 per cent over the first quarter.

The economy now looks poised for a spectacular bounce-back over the summer as huge sectors of the economy return to life.

The recovery in exports and GDP, driven by the coronavirus vaccine, suggests that the UK is back on track after a difficult start to the year.

The UK signed a Brexit deal with the European Union in the final moments of December last year and, amid the fallout, trade between the two blocs plummeted in January. 

At the time fears quickly mounted that Brexit had done irrevocable harm as a result of extra customs checks, paperwork and border delays businesses faced.

Industry groups and politicians took to the airwaves to denounce the upheaval.

Rachel Reeves, then shadow Cabinet Office minister and now Shadow Chancellor, called for an economic impact assessment of the EU trade deal.

But there were more moderate voices, notably the Bank of England which said in March that pre-Brexit stockpiling was to blame for January’s figures and that trade would then return to normal.

Welcoming the latest figures yesterday, Brexit minister Lord Frost said he was ‘very encouraged by the continued growth in the value of goods trade between us and the EU.

‘Striking that goods exports to the EU now exceed average levels from 2020.’