We estimate that leaving the single market and customs union had reduced UK trade by 11 per cent in March 2021. That is on top of a 10 per cent hit to trade between the referendum and leaving the single market.
Last month, our cost of Brexit model showed that leaving the single market and customs union had reduced the UK’s total goods trade by 5 per cent in February. Using the data for March, which was released today, we estimate that goods trade is now 11 per cent, or £7.7 billion, lower. There are two reasons why our estimate worsened between February and March. Trade growth in the countries that make up our ‘doppelgänger’ UK outstripped Britain’s, widening the gap with our modelled economy that stayed within the single market and customs union. The ONS has also revised February’s trade data downwards. It is important to remember that monthly trade data is volatile, so it will take several more months to be certain about the effect of Brexit on the level of UK goods trade, but it is becoming clearer that the impact cannot be dismissed as temporary.
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March 2021