GDP resilient in January but trade with the EU dropped off a cliff

Danni Hewson
12 March 2021

“The big message that investors will take from today’s GDP figures isn’t that there was a fall in January, but that the fall was far less steep than most economists had predicted,” comments Danni Hewson, financial analyst at AJ Bell.  “Despite a renewed lockdown with school closures, output was pretty resilient, demonstrating how businesses have adapted.  

“Despite the vaccine roll-out there are still lingering concerns that another lockdown may be required later this year.  The economy’s performance in January will bolster optimism that even a worst-case scenario won’t be as bad for business as previously thought. 

“But the numbers that will be of most concern today have to do with trade.  Exports to the EU fell a startling 40.7% in January according to the ONS.  Goods coming the other way were down almost 30%.  

“Some of this decline can be put down to lockdown, stockpiling and teething troubles.  But it’s clear that the Brexit transition has been far from smooth and markets will be paying close attention to whether current frictions mean long-term changes.”

Danni Hewson
Financial Analyst

Danni spent more than 19 years at the BBC, presenting and reporting on business news across a variety of programmes – including BBC Breakfast, BBC News Channel, BBC Look North and latterly Radio 5 Live’s flagship business programme ‘Wake up to Money’. She is now responsible for producing analysis and commentary across a broad range of subjects at AJ Bell, from financial markets, to economics and personal finance.

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