UK exports and imports both declined in Q1 2020 when compared to the same period last year, figures from the government today (13 May) show.
The UK and many of its trading partners have been in lockdown due to the spread of COVID-19, effectively shutting off large parts of the global economy. The UK itself entered lockdown on 23rd March.
Imports and exports of pharmaceutical products have been particularly affected due to export restrictions imposed by governments in the initial response to the pandemic.
Imports of pharmaceuticals in March 2020 were down 44.3% annually, with exports down 23.2%. The UK itself banned parallel exports of medical goods including paracetamol and insulin in March.
Exports of aircraft and mineral fuels were also impacted, falling 32.6% and 39.7% year-on-year.
Key statistics from this morning’s report also include, on a year-on-year basis:
- Overall exports down 8.5% for Q1
- Imports down 12% for Q1
- Non-EU exports down 6.9% for March
- Non-EU imports down 4.1% for March
- EU exports down 24% for March
- EU imports down 22% for March
Trade with China and France was particularly effected, with exports declining 45% and 37.4% respectively for the calendar month of March, and imports down 34.9% and 38.7%.
Figures from the Office for National Statistics this morning showed the economy shrank 2% in Q1 2020, with Rishi Sunak telling the BBC that just "a few days of impact from the virus" in March pushed the economy into decline.
A ‘Rapid Response’ paper from Lloyd’s Bank commented that the drop was the largest quarterly contraction since Q4 2008 but was less than the £3 decline in GDP underpinning the Bank of England’s view of the short-term economic outlook.
The paper notes that the ONS have highlighted difficulties collecting data due to lockdown restrictions and as such the figures should be treated with caution.
It also says, that the figures do “little to alter our view that the bias remains skewed towards the Bank of England loosening policy further in the coming months.”