It stressed that this was on top of an £8 billion, or ten per cent, hit to trade between the June 2016 Brexit referendum and leaving the single market at the end of 2020, a period which saw a sharp fall in the value of the Pound.
“Last month, our cost of Brexit model showed that leaving the single market and customs union in January 2021 had reduced the UK’s total goods trade by 22 per cent,” said John Springford, CER deputy director.
“Using the data for February, which was released today, we estimate that goods trade is now 5 per cent, or £3.5 billion, lower.
“That is a significant improvement on the January data, as we expected, partly because businesses had built up stockpiles to cope with disruption at the EU border in January, and were replenishing them in February, and partly because volatile trade in precious metals rose sharply.”
However, he stressed it would take several more months for the impact of Brexit on the level of UK goods trade, imports and exports, to become clear, given the volatility in monthly figures.
The European experts came to their conclusion by creating a “doppelgänger” for the UK trade in goods using data from a group of other similar countries to estimate what would have happened if Britain had stayed in the single market this year - and then compared that to what has actually happened.
They say the Covid-19 pandemic has not significantly affected its model as goods trade in advanced economies had largely recovered to pre-pandemic levels this year.
A similar “doppelgänger” methodology was used to estimate the impact on trade in goods between the In/Out referendum and quitting the single market and customs union.
“Our second estimate compares the UK data to a doppelgänger that did not vote to leave the EU,” explains Mr Springford.
“Had the UK voted to remain in the EU in June 2016, its trade would be significantly higher.
“The depreciation of Sterling after the referendum hurt UK trade, instead of helping British exporters as many speculated. The unwinding of UK-EU supply chains in anticipation of trade barriers also reduced trade flows.
“According to this estimate, the Brexit process had reduced UK goods trade by £8 billion, or 10 per cent, between the referendum and the end of 2020.”