By Paul Giles
The first ONS-based chart, below, was published in CfE’s Still European February last. Based on the past 30 years’ UK-EU goods export trends, it estimated a £126bn Brexit “hit” to date (end-2024) at 2022 prices for UK-EU goods exports, growing to £700bn (net of the DBT-estimated benefit of new non-EU FTAs) by 2035 if the consistent decline across the nine quarters since 2022 Q3 were to level out post 2024 Q4.
The second chart is updated to 2025 Q1. Although the quarter shows a small “uptick”, the trend remains strongly negative, the hit to date now estimated to have grown to £140bn and to be £800bn by 2035.
ONS data for April 2025 became available on 12 June. Although only the first month of Q2 2025, it shows a continuing decline.
It’s becoming impossible for this now 10-quarter decline routinely to be dismissed as due to factors other than the replacement of the EU single market by the greater-friction trade and cooperation agreement (TCA).
The nearest equivalent decline over the past 30 years was the 7-quarter 2007 Q3 to 2009 Q2 decline during the financial crisis. Trade then recovered strongly for the following 7 quarters to bring trade levels back close to 2007 Q2 levels. We see no signs of such recovery starting even three quarters later today.
And levelling out? Hopefully the “nightmare scenario” of the current 6.5% annualised decline continuing through to 2035 at the same rate will not occur! Should it do so, the level of UK-EU goods exports by 2035 would have fallen to a quarterly value of about £20bn, 40% of 2018 levels, and the cumulative hit to a staggering £1.3tn net of non-EU TCAs. All the same, we do not appear yet to have “levelled out”, let alone recovered, so by 2035 we’re looking at a cumulative hit in excess of £800bn.
As USA-UK trade tariffs were only announced from 5 April last they will not have influenced UK trade up to 2025 Q1.
It all makes following statement within the Rt Hon Kemi Badenoch’s keynote speech to the 2023 International Trade Week sound increasingly hollow:
“Contrary to some media reports and many pre-Brexit establishment voices, the data says Brexit has not had a major impact on UK–EU trade.”
Kemi Badenoch touts Brexit opportunities at DBT’s International Trade Week
