Thread by @BenChu_

Why *did* UK exports to the EU fall by 40% in January?

📈🚚

A thread..

Explanations from the government
-Covid lockdowns depressing export demand
-Stockpiling by firms ahead of end of Brexit transition
-“Adjustment” to new post-Brexit trade arrangements

...2/

Let’s take each in turn.

Covid lockdowns hitting demand?

Problems: demand for UK goods from *outside* the EU held up...2/

Also, as @DennisNovy has noted, intra-EU trade does not seem to have fallen anything like as sharply as UK-EU trade in January...3/

https://twitter.com/DennisNovy/status/1370341578548645898?s=20

@JohnSpringford’s modelling, using trade data on OECD countries, reinforces this...4/

https://twitter.com/JohnSpringford/status/1370343348813320193?s=20

What about stockpiling?

Stockpiling clearly visible in the data, as it was before previous Brexit deadlines....5/

But drop in January rather bigger than after previous stockpiling episodes making it implausible that it's all stock wind down we've seen in January...6/

And seems unlikely EU was stockpiling live UK animals....7/

Adjustment to post-Brexit trade?

Yes, but key here is: how much of trade collapse is permanent?...8/

Some @ONS survey evidence that reported trade stress on UK firms eased a bit in February.

But note that it still remains *much* higher than December...9/

ons.gov.uk/businessindust…

@The_IoD survey suggests that 8% of firms that stopped trading with EU in Jan think it’s permanent...10/

As @thom_sampson says, one volatile month of trade figures, in itself, does not prove or disprove anything...11/

https://twitter.com/thom_sampson/status/1370270991448965121?s=20

But what we can say is these latest official figures are consistent with predictions of trade economists that Brexit will, over the years, result in considerably less trade with our European neighbours than otherwise would have taken place...12/

More here for @indypremium 👇

ENDS

independent.co.uk/independentpre…

ADD: @uk_tpo verdict on Jan trade figs.

Covid only "a small part of the story"

"Some will be very long-lasting and was not inevitable consequence of the UK leaving the EU. It is inevitable consequence of the manner in which the UK has left the EU" 👇

blogs.sussex.ac.uk/uktpo/2021/03/…