Britain’s Budget watchdog has hailed the success of services exports despite an increase in post-Brexit trade barriers.
The Office for Budget Responsibility has reported that overseas sales of services – such as management consulting, advertising, and research and development – have grown faster than in any other major economy.
They are now 12 per cent higher than in 2019, outstripping average growth of 9 per cent in other G7 countries.
The news comes as debate rages over the effects of Britain leaving the EU.
Business Secretary Kemi Badenoch last week insisted that Britain had ’embraced world trade’ and she said it was a ‘myth’ that exports had declined. She claimed: ‘The value of UK goods sold overseas had increased from £624 billion in 2020 to more than £850 billion today, despite the impact of Covid and the war in Ukraine’.
Success: The Office for Budget Responsibility has reported that overseas sales of services have grown faster than in any other major economy
The UK had ‘negotiated more free trade deals than any other independent country in the world’ in recent years, Badenoch added.
But the OBR, which marks the Government’s Budget homework, said growth in the trade of UK goods – both imports and exports – had ‘fallen well behind the rest of the G7’.
It highlighted exports of services to the United States and suggested that many American firms were ‘outsourcing’ work to the UK to take advantage of the weaker pound.
However, it said exports of financial services such as banking and insurance had lagged and ‘are likely to have been impacted by Brexit frictions’.
Overall, the OBR still expects a 15 per cent fall in trade and a 4 per cent drop in productivity compared with the likely outcome if voters had chosen to stay in the EU in the 2016 referendum.
Thomas Sampson, of the London School of Economics, said: ‘While it’s still too early for anything more than a preliminary judgement, I think it would be hard to quibble with the OBR’s assessment so far.
‘Services trade seems to have held up well, whereas goods trade has been harder hit, particularly for small exporters who are struggling with the new red tape required to export to the EU.’
