Ana Boata, head of macroeconomic research at Euler Hermes, the world’s leading trade credit insurer, said:
“This data is a sign of the strain UK firms are currently facing. While some of the non-tariff barriers to trade, such as the increase in red tape and form-filling, will be ironed out in the short term, the combination of Covid-19 and Brexit will ultimately prove to be a long-term drag on growth.
“Exporters will be particularly hard hit. After a 16.7% dip in exports in 2020, we anticipate a rebound of just 7.4% by the end of 2022. The recovery in imports will be stronger and we forecast growth of 8.6% and 7.1% in 2021 and 2022 respectively.
“These stark figures will have wide-reaching repercussions for firms and there’s a . The good news is that, after a sharp fall in 2020 spending, cash-rich consumers are expected to boost the economy by increasing their outlays by more than 12% to the end of 2022 from Q1 2021. In addition, business investment will grow by close to 20% over the same period.
“The pick-up in activity, induced by a quickly-vaccinated public, will be welcomed by businesses but the overall recovery will still be muted. As such, we anticipate GDP growth to come in at 3.7% in 2021 and 5.9% in 2021.”