Since Brexit kicked in early this year, the UK’s trading has shrunk while the EU’s is thriving.
Since Brexit kicked in early this year, the UK’s trading has shrunk while the EU’s is thriving despite the British Government attempting to keep the many trade deals it had as a member of the European Union.
Since January 1, Liz Truss has assisted in establishing several deals, kicking off ambitious targets to cover 80 per cent of trade in the UK with free trade agreements by 2022.
However, Bank of England data reveals that, despite her efforts, trading in the UK is shrinking.
Data released on December 3 from the Bank of England has revealed the UK’s trading habits over the past 24 years, showing that at the beginning of the millennium the UK was almost level with the rest of the bloc with each reporting trade worth between 50 and 60 per cent of GDP.
A hole opened after 2011 when the EU began to grow exponentially and this continued between 2019 and 2021.12.10
When Brits voted in favour of Brexit in 2016, the UK’s trade flow stood at around 58 per cent while the EU’s was 72 per cent.
In 2019, British GDP from trade was at its highest since 2016, when it hit about 62 per cent. The EU also saw its highest recorded in history with 75 per cent.
Both underwent losses in 2020 due to the Covid pandemic, however, it is the EU that has recovered while the UK hasn’t seen its trade rebound since Brexit came into force in January 2021.
According to data from the Bank of England, trade as a percentage of GDP was around 54 per cent, down from near 56 per cent in 2020. This is at the same time that the EU has seen its trade grow almost to 2018 levels.
The bloc’s trade made up approximately 73 per cent of its GDP in 2021.
The data will be a blow for ministers working to get to 2022 targets, with experts also criticising the amount they will prospectively bring in.
Trade agreements with Australia, New Zealand and Japan that were negotiated by Ms Truss also haven’t done much to boost the UK’s imports and exports.
As a whole, they will barely even contribute to UK GDP, between zero and 0.16 per cent respectively.
At the most, the deals could bring in a further £3.4 billion but could take up to 10 years to be implemented.
The Government is now looking towards the US, however, the National Audit Office (NAO) has warned ministers not to rush into future agreements.
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