Trade trend since 2018
To assess the scale of trade impacts, we use a 2018 baseline. As ONS notes, 2018 was the last stable year of trade while the UK was still in the EU. Afterwards, Brexit negotiations and Covid disrupted trade patterns.
At first glance, trade growth since 2018 looks healthy in current prices due to the effect of inflation, but, in real terms, over the six years to 2024, exports increased by only £38 billion (4.5%), and imports were up by only £56 billion (6.4%) (see Figures 5.29 and 5.30). In short, the UK’s recent trade performance has been poor.
Brexit has clearly been a key factor, but there have been others: Covid, Russia’s invasion of Ukraine and, more recently, the Trump administration. The next section distils the Brexit impact.
Looking at the overall trend, total exports and imports showed flat growth 2022 to 2024, both in real terms and current prices. The recent figures are similar because the current reference year for ONS real prices is 2023.
Figure 5.29: UK exports of goods and services
Figure 5.30: UK imports of goods and services
The flat trends in export and import figures mask marked differences between in the trade trends in goods and services, and in EU and non-EU trade (see Figure 5.31 for absolute changes in £ billion and Figure 5.32 for percentage changes).
The ONS data shows that, since 2018:
- UK goods trade with the EU has underperformed (grown less or shrank more) than trade with non-EU countries.
- UK goods exports to both regions shrank, but non-EU goods imports grew by much more than EU imports.
- UK services trade has outperformed goods trade – services exports have grown while goods exports have fallen. Similarly services imports have grown faster than goods imports.
2024 trade vs 2018
Between 2018 and 2024, the key figures were:
- For exports:
- the £92 billion (23%) increase in services exports hid a fall of £53 billion (-12%) in goods exports;
- the £45 billion (10%) increase in non-EU exports hid a £7 billion (-4%) fall in exports to the EU;
- services non-EU exports grew by £63 billion (25%) and EU exports grew by £28 billion (18%);
- goods exports to the EU fell by £35 billion (-16%) and to the non-EU by £18 billion (-8%).
- For imports:
- services imports grew by £50 billion (19%) but goods imports grew by only £6 billion (1%);
- the £60 billion (15%) increase in non-EU imports hid a £3 billion fall in EU imports (-1%);
- services non-EU imports grew by £45 billion (34%) and EU imports grew by £6 billion (4%);
- non-EU goods imports grew by £15 billion (6%) but EU imports fell by £9 billion (-3%).
Figure 5.31: UK changes in £ billions – 2024 vs 2018
Figure 5.32: UK changes in percentages – 2024 vs 2018
Source: ONS, Breakdown of Trade, October 2025
Recap on Brexit trade barriers
As a quick recap, Brexit trade barriers for goods include:
- customs checks and paperwork
- rules of origin requirements
- value-added tax (VAT) on imports
- excise duties
- sanitary and phytosanitary (SPS) checks on the movement of animals and plants
- the need for exporters to demonstrate regulatory compliance and conformity to EU standards
The EU introduced border controls on UK imports at the start of 2021. The UK has been phasing in its own border controls more slowly. Simplified customs declarations and Rules of Origin compliance started in 2021, and full customs declarations were implemented in January 2022. Safety and security declarations only became mandatory for EU imports from 31 January 2025, but most SPS checks were introduced during 2022.
Scale of the trade impact
To answer the question of how much, there have been several academic studies of the impact of Brexit. Helpfully. John Springford reviewed the studies and summarised them in his recent paper for the Federal Trust and the Constitution Society (June 2025).
His key finding was that, comparing UK goods trade to other countries, was an impact of reducing trade by around 15%. Brexit appears to have curtailed UK goods exports and imports with both the EU and the rest of the world.
Figures 5.33 and 5.34 from the report show that, since Brexit, UK trade has performed weakly compared to other economies in the G7 and a synthetic doppelgänger (an established statistical method). The performance gap in Q3 2023 for exports was 15% and, for imports, was 13%. Obviously, these estimates have a degree of uncertainty attached to them.
The author commented:
“the dire trade performance of the UK’s automotive sector – a highly productive sector – explains how Brexit may have hit the UK’s trade to all destinations. The car industry’s exports has been shrinking rapidly, and it is embedded in international supply chains with Europe and countries elsewhere. Investment in the sector fell after 2016, and exports to all destinations have performed poorly since the pandemic struck. Its export performance has been much worse than other countries with large car sectors.
Another explanation is that after the pandemic, goods trade within the EU grew much faster than outside the Union, as savings built up during lockdowns were spent on consumer goods. If the UK had remained in the EU, it might also have seen more rapid trade growth with other member-states, but trade with the EU and the rest of the world remained similar.
UK services exports have grown strongly since Brexit, but services trade grew rapidly in other advanced economies too, and the rising tide played to the UK’s strengths. If UK services exports had grown in line with the UK’s peers, they would have been 11% higher.”
An earlier CEPR study, covering the first two years of the TCA, found that exports had dropped by 6.4% and imports by 4.4%, with a sharp impact soon after the introduction of the TCA. It also found that Brexit had disproportionately affected smaller firms, causing some to stop to importing and/or exporting.
The OBR continues with its long-held position (based on the average of several independent studies) that it expects Brexit to cause exports and imports to both fall by 15%. In short, the results of those estimates seem to have been reliable.
If you would like to know more, please refer to the report and the other sources below.
Figure 5.33: Performance of UK exports against developed economies
Figure 5.34: Performance of UK imports against developed economies
Sources:
Federal Trust, John Springford, The economic impact of Brexit, nine years on: was the consensus right?, June 2025
CEPR, Rebecca Freeman et al, Deep integration and trade: UK firms in the wake of Brexit, December 2024
OBR, Brexit analysis, July 2025
Benefits of UK trade deals
The economic benefits of UK trade deals (FTAs) outside Europe are tiny compared to the huge costs of the TCA (see Figure 5.35). In other words, ‘Global Britain as a strategy for international trade is a fantasy’, as the Centre for Economic Performance at LSE put it.
The value of the estimated benefits of the signed FTAs is about 0.47% (or £13 billion) of GDP compared to a cost of Brexit of £116 billion at 4% of 2024 GDP. Please note that the chart uses central estimates, which have a high degree of uncertainty. The 0.47% of GDP is made up of 0.31% for signed deals and 0.16% for an FTA with the US, which is still to be negotiated.
For the US, it shows HMG’s previous estimate of the economic value of an FTA with the US, but negotiations had stalled before the current Trump administration arrived. HMG has not provided an economic impact for the UK-US Economic Prosperity Deal of May 2025. However, Birmingham University estimated it will be worth about £6.5 billion in reduced tariff harm to UK GDP (about 0.23% of 2024 GDP).
On the cost of Brexit, the OBR estimated that about 40% of its 4% estimate (1.6%) had already happened when the TCA started in 2021. The Centre for Economic Policy Research (CEPR) estimated that the harm at July 2023 was already at 2% to 3% of GDP (independent of the effects from Covid or the war in Ukraine).
As of December 2025, the UK had signed four FTAs:
- Australia on 16 December 2021
- New Zealand on 28 February 2022
- Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on 15 December 2024.
- CPTPP is an FTA between eleven high-growth countries concentrated in the Asia Pacific. However, at the time of joining, the UK already had trade agreements with nine of the eleven: Australia, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore, and Vietnam. The two exceptions were Brunei and Malaysia.
- India on 24 July 2025
By March 2026, the EU had also signed trade deals with Australia, New Zealand and India, but not with the CPTPP. In addition, the EU had agreed a trade deal with the Mercosur countries (Argentina, Brazil, Peru, Uruguay), which the UK does not have.
Figure 5.35: Benefit of trade deals relative to cost of Brexit
Sources:
Centre for Economic Performance, Brexit and UK Trade, June 2024
HMG impact assessments of UK trade deals with:
Australia (May 2020)
CPTPP (August 2024)
India (July 2025)
New Zealand (February 2022)
US (March 2020)
Centre for Economic Policy Research (CEPR), The impact of Brexit on the UK economy: Reviewing the evidence, Jonathan Portes, 7 Jul 2023
Services trade agreements
In an important development for services trade, UK and Swiss authorities signed the “Berne Financial Services Agreement” on 21 December 2023, which is a mutual recognition agreement (MRA) providing enhanced market access for UK and Swiss firms to each other’s markets in specific financial services sectors. The MRA also commits the parties to ongoing regulatory and supervisory cooperation. HMG has not published an economic impact assessment.
In another services development, the UK and Singapore have signed a Digital Economy Agreement (DEA). As a result of the agreement, businesses and consumers can now benefit from: open digital markets, including guaranteed tariff-free flow of digital content, free flow of trusted data, guaranteed protections for personal data and intellectual property and cheaper trade through the adoption of digital trading systems. HMG has not published an impact assessment.
The Swiss and Singaporean agreements could form the basis of similar deals with other countries.
Impact on SMEs
SMEs are important to UK goods trade, in 2022, SMEs contributed 32% of the UK’s total import value and at least a 26% share of total value of goods exports (a further 16% was attributed to businesses of unknown size). In addition, 77% of SMEs were part of wider supply chains (FSB, 2018).
(SMEs are enterprises with less than 250 employees and annual turnover less than €50 million.)
These small businesses have been severely affected by the TCA. According to the FSB (2023), the top challenges facing traders were:
- high shipping costs (61%), losses and delays in transit (54%) and lack of clear guidance (45%).
- supply chain disruption driving costs and reducing availability:
- most small businesses had experienced cost increases (81%) and lower availability (60%) of goods that originate from outside the UK.
- many had been forced to absorb costs (40%) or increase prices (56%).
- SMEs that had stopped importing or exporting to the EU within the past five years did so because of the volume of paperwork (56%), overall costs (49%) and supply chain or logistical issues (29%).
The numbers of SMEs trading with the EU has dropped since Brexit (see Table 5.6).
- In 2024, only 30% of trading business traded solely with the EU, which was a big change from 2016 when nearly half traded exclusively with the EU.
- Between 2018 and 2020:
- there was a 23,000 (15%) reduction in the 150,000 firms trading solely with the EU (see Table 5.8). Most of these were SMEs because there are only about 8,000 large (non-SME) companies in the UK.
- there was also a 20,000 (24%) rise in the 83,000 firms trading solely with the non-EU.
- From 2021 to 2024:
- there was a further 16,000 drop in firms trading solely with the EU;
- the number trading with the EU and non-EU stayed virtually flat with a small 2,000 drop from 116,000;
- those trading solely with the non-EU increased by 10,000 from 122,000.
UK exporters felt the impact of the TCA first, but, for EU exporters to the UK, most the effects of trade barriers have been delayed until 2024.
SME trade also shrank due to a 20-42% loss in the product varieties of goods exported to the EU. This occurred in the first fifteen months of the TCA over 2021 and the first quarter of 2022.
Researchers warned that one of the most serious implications of reduced SME trade with the EU is the threat to the UK’s historically strong integration in Europe’s supply chains.
They concluded that many of the disadvantaged exporters were resource-constrained SMEs who exported single products or a limited range of products. They also argued that SME trade declined by:
- ceasing to export to the EU;
- continuing to export but with streamlined product lines, focusing on core products;
- fewer new SME exporters entering the EU market:
- increasing concentration of exports in fewer products by larger exporters.
Table 5.8: UK importer and exporter populations (000’s)
| Trade patterns | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|---|---|
| HMRC | method | Old | —> | New | —> | |||
| 1 EU only | Trading | 150 | 149 | 127 | 125 | 124 | 116 | 109 |
| 2 Non-EU only | Trading | 83 | 93 | 103 | 122 | 115 | 118 | 132 |
| 3 EU and Non-EU | Trading | 73 | 74 | 69 | 116 | 118 | 116 | 114 |
| 4 Total | Trading | 306 | 316 | 299 | 363 | 357 | 350 | 355 |
| 5 Total EU | Trading | 223 | 223 | 196 | 241 | 242 | 232 | 223 |
| 6 Total Non-EU | Trading | 156 | 168 | 172 | 238 | 232 | 234 | 246 |
| 7 EU only | Importing only | – | 86 | 76 | 89 | 89 | 82 | 80 |
| 8 EU only | Exporting only | – | 34 | 27 | 18 | 18 | 18 | 14 |
| 9 EU only | Importing and exporting | – | 28 | 24 | 18 | 18 | 17 | 14 |
| 10 Non-EU | Importing only | – | 62 | 70 | 104 | 96 | 98 | 113 |
| 11 Non-EU | Exporting only | – | 21 | 21 | 14 | 14 | 14 | 13 |
| 12 Non-EU | Importing and exporting | – | 11 | 12 | 5 | 5 | 6 | 6 |
| 13 EU and non-EU | Importing only | – | 9 | 8 | 27 | 28 | 27 | 28 |
| 14 EU and non-EU | Exporting only | – | 5 | 4 | 5 | 6 | 6 | 6 |
| 15 EU and non-EU | Importing and exporting | – | 61 | 56 | 84 | 84 | 83 | 80 |
| 16 Total | Importing only | 148 | 157 | 155 | 219 | 213 | 207 | 222 |
| 17 Total | Exporting only | 60 | 60 | 53 | 37 | 37 | 38 | 33 |
| 18 Total | Importing and exporting | 99 | 100 | 92 | 106 | 107 | 105 | 100 |
| 19 Total | Importers | 247 | 257 | 246 | 325 | 319 | 313 | 322 |
| 20 Total | Exporters | 158 | 160 | 144 | 144 | 144 | 143 | 133 |
| Source: | HMRC | |||||||