Sunday, October 17News That Matters

Exports to EU partially rebound after January slump

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.

However imports from the EU, which also saw an unprecedented decline at the start of the year, recovered less than a fifth of the lost trade.

It came as the ONS also reported slightly weaker 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 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) despite continued lockdown measures during the month.

More from Business

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.

Those 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.”