UK goods exports to the EU fell by 40.7% in January, according to the Office for National Statistics (ONS), with imports dropping by 28.8%
The figures show that the biggest drop since records began back in 1997, and are the first since the new trading rules between the UK and the EU have come into force.
The ONS have said that the temporary factors were likely to be behind much of these falls.
Meanwhile, new data has showed that the UK economy shrank by 2.9% in January during the third lockdown.
The economy is now 9% smaller than it was before the start of the COVID-19 pandemic.
Both imports from and exports Into the EU HAD fell “markedly” in January, the ONS has said. The value of the goods exported from the UK to the EU had fallen by £5.6bn in January of 2021, while the imports from the EU had dropped by £6.6bn.
This comes after British fishing businesses could go bust or end up moving to Europe due to post-Brexit trading disruption, industry figures have now warned. MPs have been told that paperwork, due to new border controls, had proved to be a “massive problem” for fishing businesses and should be moved to an online format.
The ONS has said that the fall in goods that are coming into the country were largely seen within machinery and transport equipment, and chemicals from the European Union.
Car imports, as well as the medicinal and pharmaceutical products, had been particularly affected.
The accountancy firm KPMG has pointed to Brexit as the likely culprit for the drop in trade between the UK and the EU. In contrast, the UK’s trade with those countries not in the EU increased by 1.7% back in January.
KPMG said that the intense stockpiling in December of 2020 had brought some trade flows before the Brexit deadline.
The ONS has said that companies may have been using up that stock instead of buying any new goods in January.
As well as this, the end of the temporary trading arrangement between both the UK and the EU had coincided with the finding of a new strain of the coronavirus within the UK, which had caused further complications and delays, following lorry drivers being required to take tests before crossing the English Channel.
These figures are the first since the Brexit transition period has ended and show the steepest drops since the comparable records began.
However, the ONS has said that the data showed that things had begun to pick up. Businesses were reporting that trade was getting easier and that trade levels had started to recover moving towards the end of the month.
This comes after The European Commission and Italy have blocked a shipment of the Oxford-AstraZeneca COVID-19 vaccine that was destined for use in Australia, to prevent a shipment of doses being sent off before they are given to the bloc.
However, the head of economics at the British Chambers of Commerce, Suren Thiru, said: “The significant slump in UK exports of goods to the EU, particularly compared to non-EU trade, provides an ominous indication of the damage being done to post-Brexit trade with the EU by the current border disruption.
“The practical difficulties faced by businesses on the ground go well beyond just teething problems and with disruption to UK-EU trade flows persisting, trade is likely to be a drag on UK economic growth in the first quarter of 2021.
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