Rolling coverage of the latest economic and financial news, including January’s UK GDP report
- Latest: Experts say UK-EU trade fall is staggering
- Seafood exports slump 83% year-on-year
- Exports of UK food and animals to EU slide 63%
- UK exports to EU fell 40% in January, imports down 29%
- UK GDP fell 2.9% in January amid Covid-19 lockdown
- Services output and industrial production fell
Trade body Scotland Food & Drink say today’s “grim” export statistics show the damage Brexit has caused to the country’s food and drink exporters.
Fundamentally important sectors within the food and drink industry for Scotland were among the hardest hit, they point out, with fish and shellfish, Scotland’s largest food export category, down by “a crippling 83%”.
“There is no sugar-coating these statistics, they are grim. We know Covid has reduced demand and there was stockpiling of products before the end of the year, however, right at the heart of this trade collapse is Brexit and the creation of huge, new, non-tariff trade barriers with our biggest export market.
“This simply can’t be talked away as a Covid issue. The crash in UK trade has not been seen in sales to non-EU markets, despite it being a global pandemic. Also, we did not see a fall like this at any point during the first lockdown.
“I do expect to see an uplift in the February and March figures, but the trade barriers now created are real and costly. The so-called teething problems are still with us and have cost the industry tens of millions so far. This has to act as a catalyst to open negotiations with the EU to recognise aligned food standards and reduce the red tape burden. Without that, these trade figures will never recover to anything like the levels before. EU supply chains will permanently restructure, and UK businesses and jobs will lose out.
“Of course, getting the EU to the table may now be much more difficult given that none of our EU counterparts will feel any real border friction until the end of the year. They will enjoy a grace period on border checks so wrongly denied to UK exporters. The Brexit dividend thus far has turned out to be a huge competitive disadvantage for Scottish food exporters.”
BREXIT TRADE: The UK/EU trade figures for Jan 2021 are out. They’re bad, really bad.
Stockpiling pre-Jan is a factor.
Covid is a factor.
‼️BUT this graph shows an export crash much deeper than anything during Covid in 2020.
And read on for the food export trade collapse… pic.twitter.com/Rv8E2ld1V7
Food industry exports to EU in Jan 2021:
Fish & shellfish exports down 83%
Meat exports down 59%
Dairy exports down 50%
Seafood is the UK’s biggest food export. To be clear, none of that was stockpiled & we haven’t seen that level of fall until Brexit hit.
A horror show.
As always, 1 month’s figures never tell the whole story.
But all we’ve heard from businesses of the pain of new trade barriers is in these figures.
Feb & Mar will show some pick-up in exports but, for the food sector, a restructuring of EU supply chains has begun, away from UK.
BREXIT STATEMENT
New UK/EU trade stats out.
There’s no sugar-coating these statistics, they are grim.
And, yes, it’s Brexit. pic.twitter.com/OFyWE7zPCg
The pound is having a poor day, as the financial markets end the week on an edgy note.
Sterling has dropped by over a cent against the US dollar, to $1.388.
The weaker pound is largely a function of higher yields pushing the U.S. dollar into positive territory.
“The market is looking to hedge inflation fears again by buying U.S. dollars.”
Pressuring equities is the resumption of the upward move in the 10-year U.S. Treasury yield which hit 1.6% earlier this morning following President Biden’s stimulus package. @ChrisJVersace and @EllesEconomy discuss: https://t.co/Shahp6ukgO