Two years after Brexit, the UK economy is on track

Two years after Britain left the European Union, Covid-19 confused the card. It is certainly difficult to isolate the impact of a pandemic or Brexit on the economy, including trade with the European Single Market, which may have been complicated by the introduction of quotas and customs documents. So it’s an export. Indeed, the number of goods sold to the European Union decreased by 11% between November 2019 and November 2021. However, exports to other parts of the world were even more pronounced, declining by nearly 13%.

China, the first supplier

The balance of imports is clearer, with a notable factor that China has overtaken Germany to become the UK’s leading supplier. Overall, imports from the continent decreased by 16%, while imports from other parts of the world increased by 5.6%. Therefore, the UK seems to be diversifying its supply by acquiring more goods outside the EU. This is now only 48% of UK imports, compared to 54% before Brexit.

Foreign direct investment also sets the tone of the country’s industrial outlook in the medium to long term. The UK is one of the leading European companies to drive non-European investment, with investment declining between 2014 and 2016 due to the soaring British pound. The Brexit referendum on June 23, 2016 was a game changer. It created uncertainty while lowering the pound sterling to pre-2014 levels.

“In the automotive sector, a slowdown was expected after a very good year of 2013. Mike Hawes, president of SMMT, an organization of automobile and engine producers, explains. It turned out to be bigger than expected between 2015 and 2019, but Brexit’s trading put an end to that uncertainty, and the two years 2020 and 2021 were great years. Despite the UK’s departure from the EU, the importance of the UK’s domestic market and its proximity to Europe make the UK attractive to foreign investors.

Labor shortage

One of Brexit’s most notable economic impacts is on wages. Since the spring of 2021, the UK has a shortage of workers. In a pandemic-induced phenomenon, 562,000 Britons voluntarily left the labor market and tens of thousands of European workers chose to return to their country of origin. And it was exacerbated by Brexit because it was impossible to hire Europeans without a work visa.

To make up for these losses, the sectors and regions that were heavily dependent on the European workforce were forced to raise wages. “Until then, employers had decided on working conditions, especially wages.Guarantees Jordan Sclare, head chef of Chotto Matte, a restaurant in central London. Today, employees are taking over and threatening to retire if their condition does not improve significantly. »»

Rising wages

Since the restaurant reopened in April 2021, Jordan Sclare has increased its workforce, servers and cooks by 20%. An increase similar to that recorded by most truck drivers. Between November 2019 and 2021, wages increased by 13% for services, 9.4% for retail sales and hotels and restaurants, and 8.8% for construction, according to the National Bureau of Statistics. Beyond that scale, this phenomenon is not surprising. In a report released in 2015, the Bank of England estimated that access to an inexhaustible and cheap European workforce reduced the minimum wage by about 2%.

Inflation risk

“Without increased productivity, this policy of redistribution towards the minimum wage would cause inflation.” But Jonathan Portes, a professor of economics at King’s College London, warns.Therefore he is afraid of it “This redistribution limits the so-called beneficiary’s actual salary increase, while making the rest of the people poor who would not benefit from the salary increase.”.. Brexit proponents will still be able to take advantage of this development for those who have seen the means of operating economic rebalancing in support of the forgotten liberalism of the single market in the divorce of the UK and the European Union. ..

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Frontline French customs

Approximately 80% of the flow between the UK and the European Union will pass through France, and in 2021 3.6 million trucks will pass through France. France hired 700 customs officers and created a border. “intellectual”This allows companies to carry out customs clearance upstream by equipping trucks with barcodes so that they do not have to stop before leaving for the UK.If in the first few weeks of 2021 “A quarter of the companies did not complete the procedure.” Upstream, “Today, nine out of ten trucks pass by without stopping.”, Guarantee the Ministry of Economy. Brexit logically brought about an increase in procedures, with a 62% increase in filings for French Customs.

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