Brexit and UK Trade

This briefing summarises the evidence about how leaving the European Union (EU) has affected UK trade. Overall, Brexit has had a negative effect on UK trade. But, so far, this effect has been smaller than economists expected. Total UK exports have grown at a similar rate to exports of other European economies since 2016. This is because strong growth in UK services exports has offset a relative decline in UK goods exports. But total UK imports have grown more slowly than the imports of other major economies, driven by slower growth in UK goods imports. In real terms, both UK exports and imports of goods are lower than in 2016, having shrunk by 1% and 2%, respectively. Focusing on trade with EU countries, the Trade and Cooperation Agreement (TCA) has reduced exports to the EU by around 30% for small firms, but it has had no effect on large firms’ exports to the EU. Many small firms (perhaps around 20,000) have stopped exporting goods to the EU entirely under the TCA.