UK economy shrank 2.9% in January lockdown, as trade with EU slumps – business live

Rolling coverage of the latest economic and financial news, including January’s UK GDP report

Latest: UK-EU trade slumped in JanuaryUK exports to EU down 40%, imports down 29%UK GDP fell in January amid Covid-19 lockdownServices and industrial production fellIntroduction: UK GDP, trade, eurozone factory production today

8.09am GMT

In the first month since Brexit on terms agreed by Boris Johnson’s government, official trade figures showed exports of goods to the EU plunged by 40.7%, or £5.6bn, my colleague Richard Partington writes.

The slump in trade with the EU, excluding gold and other precious metals, is a reflection of disruption at UK borders.

Related: Exports to EU plunge by £5.6bn in first month since Brexit

8.04am GMT

Trade between the UK and the European Union has plunged in January, according to the latest data.

According to the Office for National Statistics, UK exports of goods to the EU slumped by 40.7% in January, a truly precipitous decline

External evidence suggests some of the slower trade for goods in early January 2021 could be attributable to disruption caused by the end of the transition period.

November and December 2020 saw increasing imports and exports of goods, particularly in machinery and transport equipment and chemicals.

These increases were consistent with potential stockpiling of goods from the EU in preparation for the end of the EU exit transition period. UK goods imports from the EU also peaked in the weeks approaching previous Brexit deadlines in March and October 2019.

Some of the EU export data will become available slightly more slowly under the new system. There will be small difference in January export estimates although this is unlikely to influence the trend of the movements in January.

In January, Brexit finally happened and UK imports and exports slumped (by value and by volume). Imports from the EU fell by 28%, exports fell by 40%. ONS notes that some of this was down to “temporary factors” and that trade “began to recover” towards the end of the month.

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Source: UK economy shrank 2.9% in January lockdown, as trade with EU slumps – business live