Trade figures for January 2022 from the Office for National Statistics show that the UK imported £24.1 billion of goods from the European Union and exported £11.6 billion in return, representing a 21% fall in exports and 24% rise in imports compared with December 2021.
However, the ONS has warned that changes to the way HMRC collects trade data have significantly reduced the January figure for UK exports to the EU.
'Caution'
It urged “caution” in their interpretation because of a post-Brexit change in HMRC’s methodology for collecting figures for EU-GB imports and exports – from trader surveys to actual customs declarations.
The changed methodology means the January 2022 figures “are not fully comparable with previous months” and that “caution should be taken when interpreting these latest monthly estimates,” the ONS said.
New methodology: imports from the EU
From January 2022, imports from the EU to Great Britain are now being collected using custom declarations (as with UK imports from the rest of the world) rather than captured by the Intrastat survey.
ONS said HMRC has assessed the impact of this change and is “confident that the strong rise in imports from the EU [in January – a 24% increase] is predominantly the result of genuine increases in trade rather than being attributed to the data collection change”.
The Intrastat survey continues to be used to collect data on goods traded between Northern Ireland and the EU.
New methodology: exports to the EU
The ONS said a recent operational change implemented by HMRC meant that January figures represented an under-reporting of UK exports to the EU. This is because there were 10 fewer days of EU exports data (where there is an assumed departure date) recorded in January 2022.
The ONS said that about two-thirds of the 21% fall in exports to the EU was due to this change in methodology, meaning some goods exported to the bloc are now being recorded later and will show up in the February figures, Bloomberg reported.
The ONS expects future monthly reporting will not be affected.
January 2022: Key figures
- The UK’s total trade in goods and services deficit, excluding precious metals, widened by £8.6 billion to £21.3 billion in the three months to January 2022
- The trade in goods deficit, excluding precious metals, widened by £8.7 billion to £51.8 billion in the three months to January 2022, as imports of goods increased by £12.2 billion (10.1%) and exports increased by £3.6 billion (4.6%)
- The UK’s trade in services surplus increased slightly in the three months to January 2022 to £30.5 billion
GDP growth in January – pre-Russia invasion of Ukraine
The latest trade figures come as UK GDP grew by 0.8% in January, with the economic damage caused by the Omicron variant fading.
The rate was faster than economists expected, after contracting 0.2% in December and the ONS figures show that every sector grew, with services up 0.8%, production up 0.7% and construction up by 1.1%.
The Guardian reports that the snapshot of the economy was taken before the Russian invasion of Ukraine pushed up already high energy prices to record levels.
Wholesale trade was the main driver of growth in January, up 3.8% after weakness in December because of Omicron.
All sectors benefit
Darren Morgan, ONS director of economic statistics, said: “All sectors grew in January with some industries that were hit particularly hard in December now performing well, including wholesaling, retailing, restaurants and takeaways. Computer programming and film and television production also had a good start to the year.”
The food and drink sector grew 6.8% in January, after the festive season was badly disrupted as parties were cancelled and more people worked from home in December.
While supply chain issues persisted in certain sectors, output in both construction and manufacturing grew for the third month running.
