Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Trade between the UK and Germany slumped in January, new figures from Germany show, as the two countries adjusted to life after Brexit amid the Covid-19 pandemic.
Figures released by Germany’s Federal Statistics Body (Destatis) this morning show that German exports to the United Kingdom dropped by 29.0% to €4.3bn in January 2021, compared with a year ago.
German imports from the United Kingdom tumbled even more sharply – down 56.2% to €1.6bn compared with January 2020 (just before Covid-19 struck the global economy).
This was the first month in which the UK traded with EU countries under the Brexit free trade deal. Road haulage bodies had warned that exports volumes had fallen in January, following a rush of stockpiling at the end of 2020 that led to huge delays at the ports.
On 1 January 2021 the partnership agreement negotiated between the EU and the United Kingdom took provisional effect. As the United Kingdom has left the EU single market and the customs union, its withdrawal from the EU has now been completed.
Overall, German exports to the rest of the world fell by 8% year-on-year in January compared to a year ago, while imports slumped by 9.8% – a sign of the impact of the Covid-19 pandemic on global trade over the last 12 months.
This swelled Germany’s overall foreign trade surplus to €14.3bn, up from €13.7bn in January 2020.
But… trade with China picked up, as its economy emerged faster from the pandemic lockdown than the wider global economy.
In January 2021, exports to the People’s Republic of China rose by 3.1% to 7.5 billion euros compared with January 2020. Exports to the United States fell by 6.2% to 8.5 billion euros.
In January 2021, most imports to Germany came from the People’s Republic of China. Goods to the value of 10.5 billion euros were imported from there (+1.1% on the same month of the previous year). Imports from the United States declined by 22.8% to 4.7 billion euros in January 2021.
Destatis also estimates that trade with the rest of the world was down in February, although at a slower contraction than in January.
Based on provisional data, the Federal Statistical Office (Destatis) also reports that, after calendar and seasonal adjustment, exports were 3.3% and imports 5.2% lower than in February 2020, the month before restrictions were imposed due to the coronavirus pandemic in Germany.
Also coming up today
Union officials are due to hold crisis talks today with steel magnate Sanjeev Gupta, amid fears that thousands of jobs are at risk after his main financial backer, Greensill Capital, collapsed into administration yesterday.
The UK stock market has opened a little higher, after a strong day on Monday. The FTSE 100 is just up 6 points at 6725, up 0.1%, having jumped 1.3% yesterday.
- 10am GMT: Eurozone GDP for Q4 2020 (third estimate)