6. Weekly Newsletter
UK-EU Exports
In 2019, the UK exported £294bn (43% of all exports) to the EU and imported an even larger £374bn (52% of all imports) back from the EU. This represents a £79bn trade deficit with the bloc but does feature a surplus of £18bn in services. However, the UK had a trade surplus of £49bn to non-EU countries with a strong £83bn surplus for the services sector which is set to grow due to post-Brexit opportunities such as the CPTPP. Fast-forward to today and the “teething problems” faced at the border have not yet been fully eradicated for cross-border businesses. The nation’s fishing industry has once again become a news headline with reports of 71 pages of paperwork being required for one lorry of fish and thus contributing to delays.
Data has also suggested that truck volumes between the UK and EU countries have fallen substantially for January with the first 20 days of the year down an estimated 29%. Trade experts have suggested this was due to the effects of the pandemic on manufacturing, previous stockpiling to avoid Brexit-related delays, and the cost of moving goods from France to GB rising 47% year-on-year. The media coverage over the past week has suggested hauliers are now returning to normal as the Port of Dover has stated UK-EU freight trade is back to 90% of usual levels.
Vaccine Rollout
On day 323 of the UK’s COVID lockdown there have now been almost 4m COVID cases but the case rate has been collapsed by 49% over the last fortnight. The reported deaths are now over 113,000 (also down 27%) with pressures upon the national health service (NHS) being reduced. The Health Secretary, Hancock, has revealed that 12.5m people have now had their first vaccine and an extra 0.5m have had their second vaccine. This puts the UK comfortably on track to meet the ambitious target of 15m vaccinations by the middle of February.
The new target for the Government is to have all over-50s vaccinated by May which would signal the lifting of lockdown restrictions and would be in time for the UEFA EUROs final at Wembley Stadium. However, the Chancellor (Sunak) fears that scientific advisors are “moving the goalposts” for easing lockdown as economic growth for the year has been downgraded, by NIESR, from 5.9% to 3.4%.
London’s Population & Tech Tax
During the pandemic the London population lost 700,000 foreign-born people (down 8%) which represents the first reduction in over 30 years. This would be included within the total 1.3m foreign-born people who left the UK during the year partially due to the hard-hit sectors like hospitality and tourism. The population shift out of London has also been attributed to the ‘work from home’ environment, fewer graduates moving to the capital and the reduced job opportunities. Further disappointing news for the city revealed London’s unemployment levels have risen faster than the rest of the country and now exceed 5%.
The Chancellor of the Exchequer, Sunak, is believed to be considering an ‘Amazon tax’- in order to cover pandemic borrowing- from some of the most successful businesses during COVID. Leaders of some of Britain’s largest firms (including Tesco, Pets at Home and Hammerson) have backed the potential move to create a “level playing field” tax. This latest development additionally led to a decline in the share price of online businesses such as Boohoo, down 4.7%, and ASOS, down 2.5%.
