Because of Brexit, the United Kingdom is losing its economic weight and again losing importance for Europe and us in Germany. For the first time in recent history, the United Kingdom falls out of the top ten German trading partners, according to an analysis by the federally owned company Germany Trade and Invest (GTAI).
Even though the calendar- and seasonally adjusted exchange of goods between January and October rose by 13.7 per cent compared to the same period last year, mainly due to inflation, the figures are significantly lower than before Brexit. Total German goods exports also increased by 20.7 per cent in the same period. Most recently, the Czech Republic had also overtaken the UK in ranking the most important trading partners.
Commerce suffers enormously
The UK left the EU at the end of January 2020, and ceased to be a member of the EU Customs Union and Single Market in January 2021.
Even the Brexit trade agreement reached at the last moment – which guarantees exemption from customs duties in most areas – could not make much difference to the disastrous results: The increased bureaucracy is accompanied by supply chain problems, and trade is suffering enormously. Sales losses have been recorded throughout the country. In addition, the introduction of costly and time-consuming work visas for skilled workers is making cooperation more difficult for the struggling economy.
The GTAI analysis also cites the effects of Corona, inflation, and the Bank of England’s monetary policy turnaround as further reasons for the loss of relevance. The British government’s recent unclear economic policy course has also caused uncertainty among many companies.
Central bank: Britain heads for a long recession
In addition, hopes for a quick improvement in the situation are dimmed. According to the classification of the central bank in London, Great Britain is heading for a long recession, which is why companies are likely to be even more hesitant to invest. This affects the supply of vehicles, industrial machinery and chemical products, where Germany is one of the most important suppliers.