11. Weekly Newsletter
UK Exports to the EU
British exports to the EU fell 40.7%, according to the ONS, in the month of January and imports declined 28.8% – representing the largest fall since records began in 1997. However, the net trade deficit with the EU was actually cut as the value of goods exported was reduced by £5.6bn in comparison to the £6.6bn lost from EU imports into the UK. The economy is believed to have shrunk by 2.9% for the month which leaves the entire economy now 9% smaller than at the start of the pandemic.
The ONS described these figures as “erratic” but fortunately the results comfortably beat initial forecasts of a 4.9% decline for January. Many have attributed part of this decline to the huge 63.6% contraction in the value of exports of food and live animals but the Head of Economics at the British Chambers of Commerce, Thiru, said the “significant slump in EU-UK exports of goods to the EU, particularly compared to non-EU trade, provides an ominous indication of the damage being done to post-Brexit trade with the EU by the current border disruption”. Despite the challenging circumstances and previous stockpiling: UK exports to non-EU nations increased by £200m for the month.
COVID
Over 25m Brits have now received their first vaccination and almost 1.7m of these have taken a second dose. This represents 39% of the population but the national percentage of ‘fully’ vaccinated citizens is comparatively lower than much of Europe due to differing strategies. However, much of the EU has now banned the Anglo-Swedish AstraZeneca vaccine due to 40 cases of blood clots after 17m jabs. PM Johnson has reassured the UK that the vaccine is safe to use and suggestions have been made that these bans were politically motivated.
COVID cases are at their lowest rate in 6 months and the easing of lockdowns continues to go ahead. From the 12th of April all shops, restaurants, pubs, gyms, self-contained UK holidays and weddings (up to 15 people) will be resumed in England but rules differ in Wales, Scotland and N. Ireland. There will also be the introduction of ‘test events’ such as the FA Cup Final, with 20,000 fans, and the early re-opening of nightclubs specifically in Liverpool: the birthplace of The Beatles.
Cost of Shipping
The Spring season is well underway and the public are already gearing up for an increase in spending as lockdowns gradually ease. However, the garden furniture industry is already warning of shortages and the ‘Leisure and Outdoor Furniture Association’ has even gone as far as to say ‘all’ of its 70 manufacturers and wholesalers are having problems. The Association has stated that members used to pay approximately $1,200 per container (from China or Indonesia) but this has now risen to between $7,000-10,000. This comes as part of a global shipping crisis which is now impacting businesses in the UK, USA and Europe.
The international shipping line CMA CGM has blamed the “yard and port congestion” in Britain’s busiest ports which has led to delays in shipping back empty containers to Asia. Another highlighted aspect is that airlines are not moving as much cargo due to the fewer passenger flights and that the railway from China to Germany has drastically increased prices further, too. At the BBC, the suggestion has also been that shipping lines are actively trying to drive down demand from British importers and so a potential rise in domestic production may now begin following more competitive costs.
