The UK experienced one of the worst hits to trade of any major nation during the pandemic last year, with UK exports dropping by £54bn (14.7%) in 2020.
Research from Aston University’s Lloyd’s Banking Group Centre for Business Prosperity also found the UK may have lost some competitive advantages due to a slower trade recovery, City AM reports.
Yet there are green shoots visible as despite the lockdown, UK retail sales saw growth of 1% year on year in February, the FT reports.
Goods exports fell in sectors including cars, oil and gas, machinery and pharmaceuticals. This happened in almost all global regions, with trade rivals such as Germany, the US and China, benefitting.
The report's authors, who analysed the latest available UN trade statistics, said the UK would need to make raising productivity its “central goal” to avoid further decline post-Brexit.
Jun Du, professor of economics at Aston Business School, told City AM: “The fundamental causes of the UK’s dismal trade performance go beyond trade itself. Our analysis shows that long-term stagnation in productivity growth is the key reason for the subdued competitiveness of the UK economy.”
This comes as BOE governor Andrew Bailey warned yesterday that the UK’s overall economic recovery could be slower than some forecasters are predicting, the Telegraph reports.
In a mixed prognosis on the UK economy, Bailey said that while the downturn would not be as severe as in the 1980s and 90s, he wanted to inject “a note of realism” into this “growing sense of economic optimism . . . the message is simple: stronger investment and productivity growth will make the Covid recovery easier.”
Bailey warned of permanent economic “scarring” of about 1.75% of GDP. The BOE is expecting the economy to shrink by 4% in the first quarter of 2021 before recovering rapidly to regain its pre-pandemic size by the first quarter of 2022.
As the UK vaccine programme gains traction and emergence from lockdown beckons, there are statistics from which we should take heart.
Despite the lockdown, February retail sales saw growth of 1% year-on-year, the FT reports.
Analysis from the British Retail Consortium and KPMG attributed the rebound to anticipation of the phased easing of the third national lockdown, which started on Monday with pupils returning to school.
Helen Dickinson, the BRC’s chief executive, said this “prompted a burst in spending on non-food items, such as school uniforms”.
With the high street still largely closed, online shopping has seen a huge boost, accounting for 61% of spend last month compared with 31% in February last year.
Separately, a survey run by Barclaycard between February 19 and 22 showed consumer confidence rose to the highest level in 12 months