Exports to the European Union (EU) fell by 40% at the start of the year as Brexit took effect.
The Office for National Statistics (ONS) said on Friday that exports to the EU fell by 40.7% in January 2021, equivalent to £5.6bn ($7.8bn) less trade with the bloc. The slump in exports was the main driver of a 19.3% fall in UK exports to the world at the start of the year.
Imports from the EU also suffered, declining by 28.8% or £6.6bn. The ONS recorded big declines in imports of cars, medicines and pharmaceuticals.
The ONS said the declines were the biggest monthly falls in both imports and exports from the EU since records began in 1997.
The slump came as Brexit occurred on 1 January. Britain officially left the single market, meaning new customs checks and trading rules took effect.
Businesses have complained of huge disruption as a result of Brexit. Manufacturers union Make UK this week said three quarters of its members had experienced delays exporting since the turn of the year, while the Institute of Directors said on Thursday that 1 in 5 of its members had given up on trying to export to the EU.
Seafood and shellfish businesses have been among the hardest hit by new rules. The ONS said exports of seafood to the EU slumped by 63% in January "because of stricter checks and certifications implemented by the EU at the end of the transition period." Trade that previously took less than 24 hours is now taking three days, the ONS said.
Businesses stockpiled goods ahead of the transition and the ONS said this surplus could have contributed to the decline in trade at the start of the year. A return to national lockdown may also have contributed and global supply chain issues could have played a part.
"Despite the slow start for trade in January 2021, data from the Business insights and impact on the UK economy suggests that importing and exporting began to increase towards the end of January," the ONS said.
Beyond the EU, UK exports rose by £200m in January while imports dropped by £2.4bn.
"The significant slump in 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," said Suren Thiru, head of economics at the British Chamber of Commerce.
“The practical difficulties faced by businesses on the ground go well beyond just teething problems and with disruption to UK-EU trade flows persisting, trade is likely to be a drag on UK economic growth in the first quarter of 2021."
The government on Thursday said it would delay the start of full post-Brexit border checks by six months to ease the transition. Thiru said there should be "a greater focus on long-term solutions to improving the flow of UK-EU trade."
Lord David Frost, the UK's cabinet minister in charge of European relations, said the decline in trading volumes was temporary.
Frost, who negotiated the Brexit deal, wrote on Twitter: "These effects are starting to unwind. The latest information indicates that overall freight volumes between the UK and the EU have been back to their normal levels for over a month now, ie since the start of February."
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