Barclays Economic Update: UK Gross Domestic Product (GDP) Decreased by 2.9% in jan’21
According to estimated data published by the Office for National Statistics (ONS), monthly UK GDP decreased by 2.9% in jan’21 compared to an increase of 1.2% in dec’20. In jan’21, GDP stood 9% below the pre-covid-19 level (feb’20) and 4% below oct’20 when the initial recovery peak was recorded.
Monthly output in the service sector decreased by 3.5% compared to dec’20 and 10.2% compared to feb’20. Monthly output in the production sector decreased by 1.5% in jan’21 compared to dec’20. Meanwhile, monthly output in the construction sector increased by 0.9% in jan’21 compared to dec’20.
Monthly output in the manufacturing sector decreased by 2.3% in jan’21 compared to dec’20, the first decrease since the initial pandemic-driven fall in output in apr’20. Output decreased in 9 out of the 13 manufacturing sub-sectors in jan’21. The transport equipment sector recorded the largest decrease of 11.1%, due to a decrease in the manufacture of motor vehicles of 16.9%.
GDP decreased by 0.7% and employment increased by 0.3% in q4’20 in the euro area
According to estimated data published by Eurostat, seasonally adjusted GDP in q4’20 decreased by 0.7% in the euro area and by 0.5% in the European Union (EU), compared to q3’20.
In 2020, seasonally adjusted GDP decreased by 6.6% in the euro area and by 6.2% in the EU compared to 2019.
In terms of employment, the estimated number of people employed in q4’20 increased by 0.3% in the euro area and by 0.4% in the EU, compared to q3’20. The number of people employed in the EU stood at 206 million in q4’20, of which 157.9 million were attributed to the euro area.
In terms of GDP components in the euro area, household final consumption expenditure decreased by 3% and gross fixed capital formation increased by 1.6% in q4’20. Meanwhile, exports increased by 3.5% and imports increased by 4.1% in the euro area during the same period. In terms of regions, Romania recorded the largest GDP growth rate in q4’20 at 4.8% compared to the previous quarter, followed by Malta at 3.8%. Meanwhile, Croatia and Greece reported a GDP growth rate of 2.7% each in q4’20.
New timeline for border control processes on import of Sanitary and Phytosanitary goods from the EU
A new timetable for introducing import border control processes was set out by the government on Thursday 11 March to enable UK businesses to focus on their recovery from COVID.
- Pre-notification requirements for Products of Animal Origin (POAO), certain animal by-products (ABP), and High-Risk Food Not Of Animal Origin (HRFNAO) will not be required until 1 October 2021. Export Health Certificate requirements for POAO and certain ABP will come into force on the same date.
- Customs import declarations will still be required, but the option to use the deferred declaration scheme, including submitting supplementary declarations up to six months after the goods have been imported, has been extended to 1 January 2022.
- Safety and Security Declarations for imports will not be required until 1 January 2022.
- Physical SPS checks for POAO, certain ABP, and HRFNAO will not be required until 1 January 2022. At that point they will take place at Border Control Posts.
- Physical SPS checks on high-priority plants will continue at Places of Destination until 1 January 2022, when they will move to Border Control Posts.
- From 1 January 2022, the requirement for pre-notifications, phytosanitary certificates and documentary checks will be extended to all regulated plants and plant products (i.e. not just those which are ‘high-priority’).
- From March 2022, checks at Border Control Posts will take place on live animals and all regulated plants and plant products (i.e. not just those which are ‘high-priority’).
We will continue to engage extensively with businesses to support them to adjust to the new requirements already in place and to prepare for the new requirements set out above so that they can continue to trade successfully under the new arrangements.
Please see also an infographic of the timeline for SPS checks
Notices for traders
Importing to GB: what you need to do now
The Government is introducing import controls in stages from 1 October. This will help businesses affected by coronavirus to get ready.
To be in the best place possible, GB importers* need to take the following steps:
-Register for the Import of Products, Animals, Food and Feed System (IPAFFS) now. Registration is quick and easy on gov.uk.
–Familiarise yourself with what you need to do to import goods into GB, and how your business will be affected.
*If you import high-priority plants and plant products, you should continue to use PEACH for import notifications.
How to use IPAFFS
Check out this webinar to find out how to use IPAFFS to pre-notify about imports of live animals, POAO and HRFNAO into Great Britain.
Further webinars and guidance will be reviewed in the coming weeks and new dates shared as we have them.
Meursing codes not needed for GB-EU import declarations
When goods are traded under preference with the EU, Meursing Codes for import declarations are not needed. The EU Commission has stated that:
For an import declaration requesting the preferential treatment granted to goods originating in Great Britain, the declaration systems of the Member State should not require the declaration of Meursing additional codes. This obligation will only be triggered if the applicable measure contains an “agricultural component” (mostly known in the customs tariff under the expressions “+ EA”, “+ AD S/Z” or “+ AD F/M). The preferential measures applicable to imports into EU of GB goods does not contain these components.
New composites EHCs from 21 April 2021
There are changes to EU law which apply from April 2021 that will impact on traders who export certain animals, germinal products and products of animal origin. Export Health Certificates (EHCs) will need to be updated to reflect the new rules.
You will need to follow these new rules to be able to continue to export to the EU and moving goods to Northern Ireland.
New rules for the export of composite products will be introduced at the same time. These changes will introduce new EHCs for composite products as well as new documentation for composite products exempt from certification.
Defra will be rolling out the new composite EHCs from 21 April 2021. They will be available online from April 1.
There will be a potential increase in the number of composite products that require an EHC.
Defra is currently developing guidance for businesses and we will shortly issue more detailed information. Webinars are being planned for industry on these changes.
The EU’s legislation provides for a phased approach. We plan to introduce the remaining new EHCs for animal products and live animals, as they are needed, by August 2021 when the switch needs to be complete
Workforce and labour supply handbook
The Home Office in partnership with the Association of Labour Providers (ALP) have created a handbook intended to help employers and providers of contingent labour to understand the new immigration system and ensure compliance with right to work legislation, both in respect of existing workers and new applicants and to determine what actions to take to help secure continuity of labour supply. The handbook can be accessed from the ALP website
Coronavirus response updates
Free rapid tests for all businesses for regular workplace testing
All businesses in England are now able to sign up to the government’s free COVID-19 workplace testing programme. Businesses must register by 31st March.
Public Health England has also issued new posters and videos which businesses are able to use to explain the benefits and processes of testing to their staff. There are also editable posters which can be adapted to suit your industry. You can find these assets at the Coronavirus Resource Hub.
If the workplace testing programme has been successfully rolled out in your organisation we would love to hear from you and help promote your story – please do get in touch.
Please see our accompanying social media post.
Promoting ‘britishness’ could boost profitability for firms
According to research by Barclays Corporate Banking, the potential added value that could be generated for UK businesses by promoting the britishness of products across 10 key markets is more than £3.5bn per year.
The research was conducted between 13th jan’21 to 20th jan’21. Interviews were conducted with 10,005 consumers across ten international markets. These markets included France, Germany, Republic of Ireland, the United States (US), China, India, United Arab Emirates (UAE), the Netherlands, South Korea and South Africa.
The survey indicated that 34% of respondents reported to have knowingly paid a premium for a British-made product. This was most notable in emerging markets where 63% of respondents from China reported to have knowingly paid a premium for a British-made product, followed by 60% from India and 56%$ from the UAE. Reasons for preference of British-made goods included good value for money, high quality, status and that the goods are internationally respected.
The survey further indicated that India and China are the most loyal markets for British-made products, as 48% and 39% of the respondents from the respective countries said that they would wait for a product to be back in stock instead of purchasing an alternative product.
UK export sector supports nearly 6.5 million jobs
According to research commissioned by the Department for International Trade and carried out by the Fraser of Allander Institute at the University of Strathclyde, the export sector supports nearly 6.5 million jobs in the UK.
The research highlighted that median wages in the UK exports sector were c.7% higher than the national median. The research also indicated that 2.8 million jobs are supported by exports to the EU, while 3.7 million jobs are supported by exports to the rest of the world.
The research was accompanied by a new board of trade report, titled ‘Global Britain, Local Jobs’. The report laid down policies to unlock the full potential of the UK export sector to drive trade-led and job-led recovery from covid-19.
These policies include enhancing the UK’s image as a global hub for services and digital trade, pursuing new trade deals with large and fast-growing economies beyond Europe and offering more support to businesses to internationalise and adopt new export targets.
