UK business suffers due to Brexit, pandemicEuropost
UK industry and trade showed evidence of serious distress as consequences from country’s exit from the EU mounted on top of slowdown caused by the Covid-19 pandemic. Official data quoted by Reuters showed alarming sighs related to the UK economy.
Manufacturers and services firms have been hit hard by supply chain and export disruption, according to data company IHS Markit. British factories reported the steepest increase in supplier delivery times among the six “flash” preliminary Purchasing Managers’ Index (PMI) surveys published by IHS Markit last week for France, Germany, Japan, Australia and the United States as well as the United Kingdom. “This was almost exclusively linked to both Brexit disruption and a severe lack of international shipping availability,” IHS Markit said.
Under a deal struck last month, trade between Britain and the European Union remains free of tariffs and quotas but a new full customs border means goods must be checked and paperwork filled in. Using a phrase that has angered many business owners, Prime Minister Boris Johnson described the disruption as “teething problems” which have been exacerbated by the Covid-19 pandemic. Trade experts think some of the extra cost and bureaucracy will be permanent. Proponents of Brexit say Britain will benefit in the long run by striking its own trade deals and forming its own regulations outside the EU. Brexit disruption in the first quarter of 2021 was likely to reduce British economic output by around 1%, International Monetary Fund Chief Economist Gita Gopinath elaborated.
Services companies - which account for the bulk of the British economy and generate a surplus in trade with the bloc - were hit this month, the IHS Markit survey showed.
Services exports deteriorated faster in Britain than in any other of the six flash PMIs published this month, bucking a trend of improvement seen in most other countries.