While this partly reflects global trends, the UK has outperformed almost all other advanced economies in terms of the resilience of its services trade....
UK trade has, since the 2016 referendum, become a hotly debated subject. Which is not to say that it is simply a Brexit story; the uncertainties currently shaping UK trade are far from unique to the UK. Supply chain disruption associated with international conflicts, and a geo-political environment that is generally less conducive to trade, are impacting trade globally.
In the immediate years following Brexit, trade data was complicated by the Covid-19 pandemic and a significant rise in global energy prices following Russia’s invasion of Ukraine. 2023 data released by the Office for National Statistics provides one of the first opportunities to assess the UK’s post-Brexit trade performance in detail. This report uses these data to set out the key recent trends in UK trade, outline where uncertainties lie and what the policy implications are.
Following the referendum of 2016, trade became a political issue in a way it simply had not been beforehand. Partly, of course, this was because leaving the EU would mean the UK had to devise its own trade policy for the first time since 1973. Partly, too, given the way the referendum campaign had panned out, and the claims made by some Leavers as to what the UK could achieve outside the European Union, trade policy became a metric of the progress of Brexit.
...The UK’s post-Brexit trade performance marks a continuation of the trend of
the last two decades, with services becoming increasingly important relative to
goods. This has accelerated in recent years. Services trade as a proportion of GDP
rebounded quickly post-pandemic and surpassed pre-pandemic levels by the
latter half of 2022. Imports of services have increased 42% in nominal current
price terms, while exports of services have increased nearly 29% compared to
February 2020. While this partly reflects global trends, the UK has outperformed
almost all other advanced economies in terms of the resilience of its services
trade....
full paper
With thanks to Sam Lowe of Flint Global and Sally Jones of EY for their work on the report.
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