Thread by @JohnSpringford

My latest estimate is out, using the March data published this morning. It's worse than in February (trade was 5% lower than our old friend doppelganger UK then). 1/

https://twitter.com/CER_EU/status/1392434381101277189

That's because trade in the countries that make up the doppelganger grew more quickly than the UK's, and because the ONS revised February's trade data downwards. 2/

As a reminder, my estimate compares UK trade and other economic indicators to 22 advanced economies, and an algorithm selects a subset of those whose performance best matches the UK. 3/

The algorithm picks the countries whose data, when combined, forms the minimum difference with the UK data. These are the US, Germany, Canada, New Zealand, Australia, Greece, Iceland (in that order, largest to smallest). 4/

This method lets us put together an estimate of UK trade performance if it had not been hit with trade barriers with the EU in January. 5/

The other countries did not erect trade barriers with their biggest trade partners that month, and because their historical economic performance has been similar to the UK's, they give us a counterfactual, 'doppelganger' UK to compare Britain's real performance to. 6/

I use total goods trade (imports plus exports) with the entire globe, not just the EU. That's because total trade is what matters economically - if EU trade falls but ROW trade rises to the same degree, the UK economy is just as open as it was. That's not happening so far. 7/

Monthly trade data is volatile and subject to revisions, but it's becoming more obvious that the hit to UK trade since January cannot be dismissed as teething troubles. 8/

For more information on the model, take a look at the first edition in this series. cer.eu/insights/cost-…
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