Brexit deal impact 'worsening', economists say

A report from Aston University Business School highlights the deteriorating trade relationship between the UK and EU since the Brexit deal was signed three years ago. The analysis reveals a significant decline in UK goods exports to the EU, which fell by 27%, while imports dropped by 32%. Notably, the variety of exported goods has decreased, with 1,645 fewer types of British products being sent to EU countries. The hardest-hit sectors include agriculture, clothing, and wood and paper manufacturing, with some sub-sectors experiencing export value reductions exceeding 50%. The most dramatic decline was seen in edible fruit and nuts, which plummeted by 73.5%. The report indicates that smaller and more distant EU countries have been particularly affected by the trade disruptions, as many British producers have ceased exporting small quantities due to the complexities introduced by post-Brexit trade regulations. In contrast, trade with larger and closer EU nations has been less impacted. While the service sector has shown resilience, the overall trade landscape has worsened, with 2023 marking a notable decline compared to previous years. In response to these challenges, a government spokesperson emphasized the commitment to enhancing trade and investment relations with the EU, aiming to eliminate unnecessary barriers. However, they acknowledged that a return to the single market or customs union is not on the table. Business representatives have been engaged in discussions with the government to explore ways to reset the trade relationship, focusing on economic security. However, substantial progress is not anticipated until the new European Commission is established next year, alongside the UK’s completion of its new industrial and trade strategies.