Cost of living crisis hits household confidence; UK trade with Germany falls –

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UK firms have missed out on a rebound in trade with Germany last year, as Brexit frictions and the pandemic continue to weigh on the economy.

New data from the Federal Statistical Office shows that imports from the UK into Germany tumbled by 8.5% during 2021, the first year since the Brexit free trade deal was agreed in late December 2020, to €32.1bn.

But other countries did much better. Total goods imports into Germany surged by 17.1% during the year to €1,202bn, as the easing of lockdown restrictions and vaccine rollouts spurred the global economic recovery last year.

That included a 16.8% rise in imports from Germany’s fellow European Union members, and a 20.8% rise in imports from China last year.

In December alone, German imports from the UK were down 18.2% year-on-year — as there was a rush of stockpiling in December 2020 as firms prepared for possible Brexit disruption.

The EU introduced checks on goods from Britain entering the bloc as soon as the Brexit deal came into effect, with experts warning that UK firms were losing their competitiveness.

The UK delayed its checks on goods coming in until 2022. But even so, German exports to the UK fell by 2.6% during 2021, to €65.4bn. Total German exports rose by 14% in the year, even as the pandemic continued to cause disruption to global supply chains.

Destatis says:

Compared with the same month last year, exports to the United Kingdom dropped by 7.6% to 5.0 billion euros in December 2021. Imports from the United Kingdom were down 18.2% to 2.6 billion euros.

In contrast, Germany’s exports to the US jumped by 18.0% during 2021, as the recovery in America’s economy spurred demand for industrial supplies, machinery and consumer goods.

This chart shows the details:

Destatis also reports that overall German exports were up by 0.9% month-on-month in December, with imports rising 4.7% compared with November 2021.

After calendar and seasonal adjustment, exports were 6.8% and imports 23.5% higher than in February 2020, the month before restrictions were imposed due to the Covid-19 pandemic in Germany.

In 2021 as a whole, exports increased by 14.0% and imports by 17.1% compared with the previous year. Exports were 3.6% and imports 8.9% above the level of the pre-Covid year 2019.

This data rather chimes with the message from a group of MPs this morning, that the main impact of Brexit on UK firms had been “increased costs, paperwork and border delays”.

There could be worse to come as new import controls are introduced.

The cross-party Public Accounts Committee (PAC) reported that Brexit red tape has…