Trade Alert

Increase in financial services exports to the EU

Despite concerns that a drop would hit the City in trade, financial services to the EU rose in the first quarter of this year. 

Data from the ONS (Office for National Statistics) showed an increase of 1.4% of EU imports from UK banks, insurers and other finance firms compared to the same period in 2019. 

The Telegraph suggests that these statistics undermine claims that Brexit would devastate the Square Mile’s trade with Europe.

As a proportion of global financial trade, there has been a decline of 10.4% in the EU composition of the world total financial services imports.

Driver shortages continue

The Northern Ireland Retail Consortium director said that red tape and labour shortages from Brexit have worsened problems felt across production, processing, manufacturing, retail, and logistics. Furthermore, he states, ‘the government needs to get a handle on this both in the short and long term.’ 

Director of food and sustainability at the British Retail Consortium, advised that the situation will only become more challenging for retailers without government intervention. 

Coca-Cola and Diageo are now suffering from supply chain problems due to a shortage of aluminium cans and lorry drivers. 

New health certificate requirement may cause significant disruption warns M&S

On 1st October, export health certificates will become a new requirement for food imports from the EU. Marks and Spencer is encouraging digital documentation to mitigate the potential disturbance from these new regulations.   

The problem is that officials who issue the necessary documentation don’t work on weekends in some EU countries. Since food is traded seven days a week, this slows down the process. Digital documentation avoids this problem. M&S also predicts that this will worsen lorry driver shortages. 

As of now, companies will have to provide hundreds of pages worth of documentation. The Facilitated Movement Scheme, a digital system, will make the documentation problem easier, says the commercial director of M&S.

Starting 1st October, recognised veterinarians will have to sign a completed health certificate for imports of meat, dairy, and other animal products from the EU. From 1st January, certification must be filed no more than 24 hours in advance.

These added bureaucratic costs will make the price of food increase, says the British Meat Processors Association. 

Labour shortages to last up to 2 years

The labour shortage affecting UK supply chains and productivity might not be solved for another two years, says the Confederation of British Industry. 

The most recent Labour Market Insights survey shows that companies are limiting their output due to a scarcity of workers. 

Long term measures are not enough for the working climate now. Short term solutions are needed. 

Is the increase in freight prices due to Brexit disproportionately impacting the UK?

Many different factors have played a vital role in the increase in freight prices in the UK and around the world. The pandemic, changes in international trade rules, and increasing concern on climate change have all impacted worldwide shipping. Added to this, the UK is experiencing a shortage in lorry drivers as a result of Brexit. 

Data from Logistics UK shows an increase of 800% in the cost of importing shipping containers from China to the UK. Furthermore, the cost of moving a 40ft container has risen by 600%, making it unprofitable. 

It could be another year before prices start to decrease. 

China and Germany exports and production rally in August

There has been a 25.6% increase in exports and 33.1% in imports with China and ROW during August. 

Rises in electronics, furniture and recreational products. The founder of Heji Trade and Credit Research Centre says he expects China’s export growth to continue until the end of the year and even the beginning of next year. 

The rise in COVID cases may slow down growth and bring the numbers back down. 

Germany has also experienced a growth in industrial output in the car industry and engineering sector. 

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