The facts: What impact has Brexit really had on the economy?

So Eleanor Pringle took a look at the evidential impact of Brexit on the economy - and whether the UK is yet to feel its full effect.

Everyone had their theory on where Brexit would hit the economy the hardest - if at all.

But six months on, what do the cold, hard facts say about the UK's trading relationship with the bloc?

Prior to leaving the EU, the UK had never been so reliant on goods and services from the continent.

As of December 2020 the value of imports from the EU had steadily increased throughout that year to around £22bn - well ahead of imports from the rest of the world.

This was largely driven by transport and machinery equipment imports.

However this figure dropped dramatically in January and since then the country has leaned more on commodities from further afield.

Notably, the UK's top imports are now from China instead of Germany, with the US also creeping up the rankings where countries like France and the Netherlands fell.

Some things have not changed, however, with the UK still operating at a trade deficit as export rates tanked.

Perhaps unsurprisingly exports to the EU fell sharply as of the dawn of 2021 - collapsing to a value of below £10bn when previously it had sat at around £15bn.

Happily this is on the rise again with exports of chemicals and machinery picking up.

However the biggest hit to UK exports was a loss of trade with the States totalling £3.6 billion (25.8pc) between Q1 and Q2 2020 - the largest decrease in exports to any trading partner at that time.

And this, said Lorenzo Rossetti, customs director at KPMG UK, cannot be blamed on Brexit.

He said: "In 2020 the landscape had changed – exporters, transporters, customs agents have been confronted by a seismic shift in operations – and this may well have impacted on non-EU exports as well as EU imports/exports.

Lorenzo Rossetti, customs director at KPMG UK (Image: KPMG UK)

"Also, within a matter of weeks of the UK leaving the EU, the World Health Organisation declared a global pandemic – which had a knock on effect on import and export levels globally."

This begs the question of whether or not the UK has even felt the full impact of leaving the trade bloc, with Mr Rossetti saying: "There is no doubt another lockdown, which was declared weeks after the UK left the EU, has had an impact on global supply chains and issues at our borders.

"But HMRC also introduced some ‘easements’ at the beginning of the year in relation to Brexit, which have potentially given us a much rosier picture of the situation for importers and exporters at the EU/UK border.

"A clearer picture of the possible impact on them won’t be apparent until early next year when (it is assumed) full official controls will kick in in earnest. HMRC has been flexible given the extraordinary events over the last year, which has also helped."

But research from the ONS's Business Insights and Conditions Survey suggests that businesses are once again turning their focus to Brexit as the economy looks to reopen.

Businesses reporting that Brexit was their main challenge rose from 20pc in January to just over 50pc by the end of April.

Conversely businesses stating the virus was still the cause of their concern fell from around 30pc on average to less than 10pc.

And whether these concerns are justified remains to be seen, Mr Rossetti said: "The change in relationship between the UK/EU as a result of Brexit was always going to have some kind of impact, and whilst the UK/EU Trade & Cooperation Agreement tries to go some way to maintaining some level of status quo, a “reset” in international trade is going to happen - if it hasn’t already.

"The government is clearly trying to both maintain our position and fill the gaps by negotiating new trade deals with other nations or trading blocs. How successful these will be in the immediate term and what it means for international trade is still to be seen."