Brexit cost UK importers £500m in August

25 October 2022

Imports from the EU fell by £500m in August, highlighting the “teething troubles” of the “post-Brexit universe”.

UK imports from the EU fell by £500m in August to reach £26bn, representing a 2% decline in value according to the Office for National Statistics (ONS). Exports to the EU also dropped in August, by £300m. 

Meanwhile imports into the UK from non-EU countries rose by 13% to £3.5bn.

In 2019, the EU accounted for £374bn worth, or 52%, of the UK's total imports. In 2020 this figure stood at £301bn (50% of all UK imports) according to the House of Commons Library, representing a 20% decline in value.  

In 2021, the EU represented 45% of the UK’s total imports, showing a further decline in trade as the Brexit transition period came to a close. 

David Jinks, head of consumer research at delivery and logistics firm ParcelHero said: “UK importers sourcing stock and materials from the EU have suffered substantially.”

He added that the crisis at UK-EU borders is more than “teething trouble” and the latest ONS figures represent an “escalating problem”, with businesses reporting mounting transport costs, border disruption and increased customs duties.

“We live in a troubled post-Brexit universe where the combined loss of £300m in exports and £500m in imports equates to a £800m collapse in total UK-EU trade during August. We all know the government has enough financial troubles to deal with, but it cannot afford to neglect the deep problems caused by the flawed Brexit deal it signed up to.”

The ONS noted the main challenges impacting EU imports throughout 2021 included additional paperwork and changes in transportation costs and customs duties. “There is some evidence of a potential shift in supply chains for some commodities since the end of the EU exit transition period,” it said. 

Further research by the Economic and Social Research Group found imports from the EU to UK have fallen by 20% since the end of the transition period.

According to the group's report, How has Brexit changed EU-UK trade flows?Brexit has “substantially reduced” the UK's imports from the EU.

It found imports from Malta dropped most significantly at -46%, followed by Finland (-33%), Greece (-29%), the Netherlands (-29%) and France (-27%). It said overall the “majority of [EU] countries” saw a decline in exports to the UK following Brexit. 

However, the report noted some of the immediate declines in imports could be due to businesses stockpiling goods in the months prior to the December 2020 Brexit deadline, in anticipation of trade disruption. 

While this may account for some of the immediate declines in imports, it said “we can see that Brexit led to significant declines in trade across all months of 2021”. 

It added that, during this period, EU trade with the rest of the world had increased, in stark contrast to its imports to the UK. The UK’s imports from the rest of the world also “increased considerably”. 

The report concluded: “While it may not be possible to say that these will be the levels at which trade between the two stabilises, the extent of the initial impact and its variation across member states and trade margins is of considerable interest.” 

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