Scholars have found that Brexit has reduced UK service exports by 110 billion pounds

New research shows that Brexit has reduced UK service exports by more than 110 billion pounds in four years, highlighting the far-reaching impact of Britain’s decision to leave the EU on trade.

Experts from Aston University in Birmingham found that from 2016 to 2019, the UK’s total service exports decreased by £113 billion compared to the UK in June 2016 when it did not vote to withdraw from the European Union.

Researchers calculated this number by predicting how the industries from IT and finance to business services will grow if they continue the previous path, and comparing it with the actual progress made since the Brexit referendum. The gap is 113 billion pounds.

Du Jun, professor of economics at Aston Business School, said: “Our findings have raised serious concerns about the damage to the UK’s service trade status and the possible spillover effects of the services-related economy and employment.”

The survey results pointed out that after the UK and Brussels reached a Brexit agreement, British service exporters will face potential challenges in maintaining trade with the EU.

The agreement has very few terms for financial and professional services (industry vital to the British economy). 2019 UK £18 billion in surplus In the service trade with the EU, the goods deficit is 97 billion pounds.

Aston’s study did not include data for 2020 because the pandemic has severely distorted the economy. Du told the Financial Times that as the impact of the pandemic fades, the trend of service companies leaving the UK may accelerate.

“The Covid era caused difficulties in transferring businesses and individuals [which] This slowed down the relocation process. .. The situation will get better now, and it will get worse as companies see that there is not much progress in the UK-EU negotiations. I think this is just the beginning,” she said.

In terms of currency, financial services exports have been hit hardest, as banks, insurance companies, and asset management companies have transferred thousands of people and billions of capital from the centers of cities and Canary Wharf to Frankfurt, Paris, Amsterdam, and Dublin. The new center allows them to conduct transactions seamlessly with customers after Brexit. Aston’s research found that other UK industries most affected include business services, tourism, transportation and IT.

“Behind the scenes [from leaving the EU] John Springford, deputy director of the European Reform Center think tank, cited his own research and data from the National Bureau of Statistics, the London School of Economics and the Tony Blair Global Institute. change. He said that data showed that Britain’s trade with the European Union had fallen by one-fifth due to Brexit.

“Compared with the historical branch where the UK stays in the EU or actually stays in the single market, Brexit has made the UK poorer,” he added.

Ireland’s cumulative service exports from 2016 to 2019 were GBP 126 billion higher than forecasts based on 2016 trends. Aston’s professor believes this is because Ireland won British business after Brexit. Irish economists disagree.

“Ireland’s service export boom is obviously mainly due to ICT exports (Facebook, Google, etc.),” ​​said Conor Mike CoyleThe chief economist of David, Ireland’s largest stockbroker, refers to the information, communications and technology sector. “These companies had been doing business in Ireland before the referendum, and there has been explosive growth since then.”