UK exports to the EU collapsed by £20bn in the first full year after Brexit, official figures show, as businesses grappled with delays, extra costs and new red tape.
Sales to the trading bloc fell much more sharply last year than exports to the rest of the world, the Office for National Statistics (ONS) reported.
Exports to the EU crashed 12 per cent between January and December last year compared with 2018, while non-EU exports were down 6 per cent.
Analysts said the UK continued to lag behind competitors, thanks in part to new trade barriers.
Total exports fell by more than 10 per cent in Britain’s first year outside the single market compared to 2018 – the last period before Brexit and Covid-19 caused huge disruption to international trade.
Imports from the EU also fell 17 per cent to £222bn – the lowest level in five years. The amount of goods bought from EU nations fell below imports from the non-EU countries for the first time since comparable records began in 1997.
Meanwhile imports from non-EU countries rose from £206bn in 2020 to £254bn last year, the most on record.
The trade deficit – the gap between imports and exports – is widening, and hit its highest point on record last year.
The UK imported £15bn more in 2021 than it exported, an increase of 20 per cent on the year before and up significantly compared to previous years.
Part of the reason for this yawning deficit is that UK services exports, once a powerhouse of economic growth, remain 4.6 per cent down on 2018 levels at £24.9bn.
Further changes to the trading regime due to come in later this year threaten to cause more upheaval.
From July there will be new physical checks on plants, health certificates will be needed for animal products and all imports will need safety and security declarations.
James Smith, research director at the Resolution Foundation think tank, said: “While the economy is at pre-pandemic levels, UK trade continues to lag many of its main competitors. While Covid has undoubtedly damaged trade, so too has the introduction of fresh trade barriers with the EU.
“As well as facing up to the cost of living challenge, the government also needs to redouble efforts to boost trade as part of a new economic strategy for the 2020s.”