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The Impacts of EU Exit and Coronavirus (COVID-19) on UK Trade in Services: July 2021
The Office for National Statistics (ONS) have produced a report recently showing a noticeable change in UK trade, much of which is likely to be due to the fall in world trade and disruption to global supply chains as a result of the coronavirus pandemic and global recession.
There may also be some impact from EU exit and related uncertainty, although it should be noted that these are only initial post-transition period estimates; it is too early for any conclusions to be reached about longer term trends or impacts.
We will need to wait for further analysis as the Pandemic unfolds. Key points highlighted are:
- UK service exports and imports have declined since Quarter 1 (January to March) 2019, with trade with EU countries falling more than trade with non-EU countries
- The share of total service imports from EU countries fell by around 9 percentage points to 37.9% in the two years to Quarter 1 2021, while the share of total service exports fell by around 1.3 percentage points to 36.5% over the same period
- The proportion of businesses citing coronavirus (COVID-19) as a challenge increased in mid-2021 compared to the beginning of 2021, while the proportion citing EU exit fell over the same period; this is also reflected in the results of the International Trade in Services Survey, which suggests coronavirus had a bigger impact on falling trade in services
- Service types that are reliant on the movement of people, such as travel, transportation, manufacturing, maintenance and repair, and construction were impacted most by the coronavirus pandemic
- Exports of legal, accounting and management services to non-EU countries increased in Quarter 1 2021 when compared with Quarter 1 2019, driven by trade with the United States, while exports to the EU fell over the same period
- EU imports of financial services fell to 25.3% of world total financial services in Quarter 1 2021 compared with Quarter 1 2019, while the composition of exports remained stable
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