Exports to EU partially rebound after January slump – as wider economy returns to growth
Exports to the EU partly rebounded in February after a record slump to start the year while the wider economy also returned to growth, official figures show.
The Office for National Statistics (ONS) said goods sales to the bloc rose by £3.7bn, or 46.6%, having fallen by £5.7bn, or 42%, in January – though they were still well down compared to last year.
Imports from the EU, which also recorded an unprecedented decline at the start of the year, saw a much weaker recovery.
The data came as the ONS reported slightly lower than expected GDP growth of 0.4% in February.
Britain’s trading with the rest of the world at the start of this year has been affected by additional red tape and costs following the end of the Brexit transition period, with COVID-19 restrictions and wider global economic trends also having an impact.
The latest figures showed that UK goods exports to the EU, having been 41.4% down year-on-year in January, were 12.5% off 2020 levels in February.
Imports – which were 19.2% down on last year in January, were still 11.5% off in February.
The ONS said the UK economy in February remained 7.8% below its pre-pandemic level.
A slight pick up for wholesale and retail sales as well as improvements for the manufacturing and construction sectors helped overall gross domestic product (GDP) grow despite continued lockdown measures during the month.
But the expansion fell short of forecasts of around 0.6%.
Britain’s economy suffered its biggest slump for three centuries last year thanks to the coronavirus pandemic, with GDP shrinking by nearly 10%.
It is likely to have declined again over the first quarter of 2021 thanks to the latest lockdown measures though the reopening of businesses following the rapid roll-out of COVID-19 vaccines has added to hopes of a speedy recovery.
Pandemic restrictions took a heavy toll in January, when the ONS now estimates that the economy shrank by 2.2% – though that is an improvement on the initial measure of 2.9% contraction.
The ONS said: “The economy showed some improvement in February after the large falls seen at the start of the year but remains around 8% below its pre-pandemic level.
“Exports to the EU recovered significantly from their January fall, though still remain below 2020 levels.
“However, imports from the EU are yet to significantly rebound, with a number of issues hampering trade.”
Danni Hewson, financial analyst at AJ Bell, said: “Today’s GDP figures are the equivalent of pubs reopening in the middle of a snowstorm, welcome but chilly.
“There is also small comfort to be had in February’s trade figures.
“Exports to the EU which dropped so dramatically off a cliff in January have bungeed back up, though they are still £2bn down on pre-Brexit levels.”
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