BREXIT has started to hit the UK economy
Withdrawal from the EUBrexit is hitting the UK economy that hard
Great Britain's final exit from the EU and its economic consequences for the United Kingdom and the international community have lost public attention - also because of the corona pandemic. Retail, tourism and gastronomy have almost come to a standstill and many factories are not working at full capacity. “The negative economic effects are currently being overshadowed by the corona crisis,” confirms a study by the Landesbank Baden-Württemberg. "In addition, British exporters are currently not getting any tailwind from a weak pound."
Many companies, on the other hand, can hardly ignore the post-Brexit reality. Anyone who purchases goods from mainland Europe or wants to transport them there must overcome various hurdles. Customs forms, permits, evidence of the origin of goods, compliance with special import requirements and their control are just a few of them.
This has consequences: According to a survey by Make UK, an association of the manufacturing industry in the United Kingdom, around three out of four companies have experienced delays and interruptions in trade with the EU since the end of the transition phase. More than half of the respondents also reported higher costs, and a third complained about lost sales.
Brexit is affecting the UK's industries
The UK trade balance paints a similar picture. According to the statistics agency, British exports to the EU fell by just under 41 percent from December to January, imports by 29 percent - that corresponds to a total of 12.2 billion pounds. Although this development is also due to the corona-related delivery difficulties, trade outside the EU accounts for a significantly lower share. For comparison: exports outside the EU increased by 1.7 percent in January - imports fell by almost 13 percent.
Monthly UK exports (in millions of pounds)
The cuts in each sector of the UK economy are even greater. In isolated cases, companies have therefore already started to relocate parts of their production to mainland Europe, including some food producers and pharmaceutical companies.
Food and beverage manufacturers
Around a third of all food in the UK comes from the EU. Agriculture recorded an export decline of around 59 percent (to 323 million pounds) for food and live animals compared to the same month of the previous year. The British Association of Food and Beverage Manufacturers expects the food industry to experience an even greater drop in exports in EU business. According to the association, manufacturers recorded a drop of 75 percent in January, and exports to some countries such as Germany and Italy even fell by 80 percent. The Brexit effect is also particularly evident in the case of individual foods. Simplified controls were in place for food deliveries from the EU to Northern Ireland until March 31, and the UK unilaterally extended them to the end of October at the beginning of March. Nevertheless, many British companies complain about the complicated and sometimes impossible transports - sometimes even supermarket shelves remain empty.
For a long time, London was considered the financial center of Europe, but with Brexit, the capital has lost its importance. As the largest stock market in Europe, Amsterdam has overtaken the city. One reason for this postponement: The British financial sector is largely excluded from the trade agreement with the EU - that is why the same regulations have been in place for Great Britain as for third countries since January 1st. The financial sector felt the possible consequences of Brexit long before the final exit from the EU. Around £ 1.2 trillion in assets and 7,500 jobs left London between the 2016 referendum and the end of the transition period. The trading volume of the equities business has also shrunk by £ 5.6 billion to £ 7.4 billion.
The British meat industry is one of the hardest hit by the consequences of Brexit. In the first six weeks after the final exit from the EU, meat exports have halved. Anyone who transports goods to mainland Europe also has to plan up to three days more time. The first companies such as the British sausage producer Helen Browning’s Organic have therefore already switched from British to Danish suppliers. The industry also expects export losses between a fifth and half of the previous volumes. Trade with the EU is also becoming significantly more expensive financially. According to the British Meat Processors Association, it could cost British meat producers between £ 90 million and £ 120 million a year.
The auto industry is also suffering from the exit from the EU. In January, the industry association SMMT recorded a production decline of 86,000 vehicles. This corresponds to a minus of 27.3 percent compared to January 2020. The corona-related standstill in production and the uncertainty of many manufacturers in view of the expiring transition phase had already throttled car production last year. The industry has suffered a loss of £ 11.3 billion since the pandemic started in March 2020. In contrast to other industries, the car manufacturers have so far been able to benefit from a grace period until the end of the year. During this time, cars and auto parts are exempt from the declaration requirement. The auto industry accounts for just over a tenth of UK exports, according to the SMMT.
- How vulnerable is China's middle class
- What do you collect as souvenirs
- Why do I dream of giraffes
- Why should we stop cell phone addiction
- What exactly fits the Adobe employee 401k
- What is a private investment in public equity
- Why can't I remember what I read?
- Can dogs say your names
- How much does a nurse earn
- How do I sell shares in buyback
- What tariff passed the Congress in 1828
- How do you build a global company
- What does OTIS mean in an elevator
- How do you feel about domestic violence?
- Are donuts gluten free
- What caused the Greek dark age
- Will Japan exceed GDP of 5 trillion again
- Where does the term silverware come from?
- Why don't Australians like Americans
- Do you lose hope in humanity
- What ten things make a narcissist unhappy?
- Are you sure there is Allah?
- How did ThisisWhyImBroke get traction
- Is it a racist word to call someone pale?