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Britain’s budget watchdog has praised the success of services exports despite rising 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 percent higher than in 2019, outpacing the average growth of 9 percent in other G7 countries.
The news comes amid debate over the effects of Britain’s departure from the EU.
Business Secretary Kemi Badenoch last week insisted Britain had “embraced global trade” and said it was a “myth” that exports had fallen. It stated: “The value of UK goods sold abroad had risen from £624bn in 2020 to more than £850bn today, despite the impact of Covid and the war in Ukraine “.
Success: The Office of Budget Responsibility has reported that foreign sales of services have grown faster than in any other major economy.
The UK has “negotiated more free trade agreements than any other independent country in the world” in recent years, Badenoch added.
But the OBR, which sets the Government’s budget task, said growth in the UK’s goods trade – both imports and exports – had “lagged far behind the rest of the G7”.
He highlighted services exports to the United States and suggested that many American companies were “outsourcing” work to the United Kingdom to take advantage of the pound’s weakness.
However, he said exports of financial services such as banking and insurance had lagged and were “likely to have been affected by Brexit frictions”.
Overall, the OBR still expects a 15 per cent drop in trade and a 4 per cent drop in productivity compared to the likely outcome if voters had chosen to remain in the EU in the 2016 referendum.
Thomas Sampson, of the London School of Economics, said: “While it is still too early for anything more than a preliminary judgement, I think it would be difficult to object to the OBR’s assessment so far.”
“Trade in services appears to have held up well, while trade in goods has been more affected, particularly for small exporters who are struggling with the new bureaucracy required to export to the EU.”