UK trade, a zero sum game
So the latest trade figures for the UK show that trade with the EU is down by 12% compared to February last year; by comparison trade with the rest of the world is down by 1%.
The fact that exporters and importers are coming to terms with the obstacles, red tape and costs that the British government has thrown in their way is not surprising. Neither is it a shock that trade with the EU is still bound to take a hit.
There is absolutely nothing in the Brexit deal with the EU that makes trade easier or cheaper, absolutely nothing. The short term hit that we have seen and are likely to continue to see is a direct result of that but perhaps more worrying are the longer term consequences.
That is because there is absolutely nothing in that trade deal which makes it more likely that foreign firms will invest in the UK. The deal makes it more attractive for business to set up in the EU and sell into the UK, rather than to set up in the UK and sell to the EU. This matters because the most productive sectors of the British economy are often foreign owned, so not only will making the UK a less attractive place to do business hit the trade balance, it will hit productivity and growth.
Attempts by the Government to boost growth and level up the economy are already starting with one hand tied behind their back.
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