UK Economy on the Brink of Crisis

Boris Johnson, Coronavirus Outbreak, UK Economy, EU What do British officials think about the economic situation in the UK after withdrawal from the EU? What has been the volume of British trade with EU countries over the last two months? How has the coronavirus outbreak affected the UK economy? What are the reasons for the recent recession in the UK?

Separation from the EU has put the British economy at great risk. The tariff crisis in the Irish Sea and the English Channel, the collapse of target markets and the loss of EU markets, has caused great concerns among UK economists.

Recent Studies Show that UK Economy is Shrinking

After the spread of the coronavirus in the world, the economies of all countries have suffered. The damage has been higher in some countries and lower in others. The results of the latest study conducted in the UK show that the economy in the first month of 2021 has shrunk by 2.9% due to the lockdown. The Office for National Statistics reports that both the service sector and production efficiency experienced a fall of 3.5% and 1.5% respectively in January. The report shows that the volume of exports from the UK to the EU also dropped by 40.7% in the first month following Brexit. Jonathan Athow, deputy national statistician and director general for economic statistics, has said that the UK economy took a significant blow in January. According to him, restaurants, schools, hairdressers and retailers suffered the most damage. Athow said imports and exports to and from the EU also declined in January due to cumbersome new regulations.

British Companies Are Paying for Boris Johnson’s Disastrous Deal with the EU

Boris Johnson’s futile deal with the EU, as well as a further surge in the pandemic, have left many British companies at a loss and on the verge of bankruptcy. Three-quarters of British manufacturers are struggling to cope with delays in moving goods in and out of the EU amid continuing disruptions caused by Brexit and the Covid pandemic, industry figures say. Two months after the UK left the EU following trade terms agreed to by Boris Johnson’s government, research from the manufacturing trade group, Make UK, shows that 74% of firms in a survey of more than 200 leading industrial companies are facing delays in EU import-export. The survey shows that more than half of UK companies have complained about the rising cost of disrupted global trade due to the pandemic and customs inspections. In addition, more than a third of commercial companies have experienced a fall in sales and fears that this situation will continue have led to a slump in business. The Prime Minister’s Office claims that the volume of trade with the EU has now returned to the previous level and there are no disruptions at the border. However, economists say that trade relations with the EU are under great pressure and there are no clears prospects on the horizon in this respect.

The Current British Recession has been Unprecedented in the Last Three Centuries

The economic situation in the UK due to the pandemic and London’s withdrawal from the EU is not well defined. Although all European countries are in an economic crisis caused by the coronavirus pandemic, statistics and polls show that the UK is in a worse situation by comparison to all OECD countries. Earlier, the Office for National Statistics (ONS) had reported that the UK economy experienced the largest annual loss in nearly three centuries last year due to the pandemic and lockdown, with a 9.9% reduction. A few days ago, the Chancellor of the Exchequer, Rishi Sunak, presented the Budget for the next 12 months, in which corporate tax increases are seen as a way to compensate for the government’s huge debt due to the pandemic. According to the Budget, corporate taxes are set to increase to 25% from 2023. Sunak says the coronavirus crisis has inflicted severe damages on the country’s economy, which it will take a long time to recover from.

Protests Are Growing over UK’S Useless Withdrawal from the EU

The UK officially left the EU after 47 years of membership. The government says it has reached an agreement on the future of trade cooperation with the EU, but new customs restrictions have provoked protests by British firms. Some time ago, British fisheries gathered outside the Prime Minister’s Office at the heart of London to protest the new, cumbersome customs rules imposed by Brexit. took part in the protest, chanting slogans such as “Brexit carnage” and “Incompetent government destroying shellfish industry”. The participants protested against the long delays in the exchange of goods with the EU and the formation of queues several miles long on the border with France, which is the only trade route out of the UK. Many British fishermen have reportedly been unable to send their products to the EU since the beginning of this year. Whilst previously trading with EU member states without customs restrictions, they are now required to complete a number of documents and declarations that have led to long delays and dissatisfaction among European buyers. The present agreement does not give the UK the freedom to fish in its own waters, does not exempt it from EU rules and standards, and does not even give it enough freedom to sign independent trade agreements with other countries.

In the new agreement, Britain has given many concessions to the other side just to tell people that it has reached an agreement so that they can put an end to four and a half years of conflict. The British people will gradually realise the futility of Brexit. The UK did not gain any privileges in this agreement, and what is interpreted as maintaining sovereignty or taking control of the country and its destiny is practically meaningless with the restrictions imposed by the agreement. According to Germany’s Federal Statistical Office, imports from the UK were down by more than 56% in January as compared to a similar period in 2020. This is roughly equal to 2.1bn euros (£1.8bn) in lost trade. Exports to the UK were also down by 29%. The EU is Britain’s largest trade partner and London’s assessments indicate that expanding trade cooperation outside the EU will not offset the economic damages caused by Brexit.

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