UK imports of goods from Russia have collapsed to a record low as a result of economic sanctions over the war in Ukraine, according to official data.
Imports of goods from Russia totalled £33mn in June, down 96 per cent year on year and the lowest since comparable data was first published in 1997, the Office for National Statistics said on Wednesday.
For the first time on record, there were no imports of fuel from Russia.
UK goods exports to Russia also fell 67 per cent compared with the monthly average of the year to February 2022.
The data come as Russia’s invasion of Ukraine and the decision to cut gas supplies in retaliation for sanctions exacerbate the cost of living crisis by driving up soaring household energy and food costs.
“The war in Ukraine has resulted in a collapse in the UK’s trade flows with Russia,” said Ruth Gregory, senior UK economist at Capital Economics, a consultancy.
She added that the war’s far bigger effect on the British economy was “via the worsening in the UK’s terms of trade caused by the surge in energy and food prices, which has significantly eroded household and corporate incomes”.
Wednesday’s figures were in stark contrast to the overall UK trend: goods imports and exports rose by an annual rate of about 35 per cent in June.
ONS data showed that imports from other oil-producing countries, such as Norway and Qatar, soared compared with the monthly average of the year to February 2022, compensating for the lack of Russian energy imports.
US goods imports from Russia also collapsed by an annual rate of 76 per cent in June, while EU imports from the country were up 43 per cent. This reflects continuing imports of Russian gas, on which the bloc is heavily dependent.
Exports to Russia from both the US and the EU fell sharply because of sanctions.
The ONS figures showed UK exports of most commodities to Russia had fallen substantially in June, with machinery and transport equipment contracting 91 per cent, or £118mn, over the same period. UK exports of cars to Russia have ceased completely.
One exception was UK exports of medicinal and pharmaceutical products, which are unaffected by the sanctions for humanitarian reasons. They jumped 62 per cent in June compared with the prewar period.
More than 96 per cent of goods imported from Russia are subject to restrictions, as well as 60 per cent of goods exported to the country.
Goods subject to export bans include those that can be used for both civilian and military purposes, and aviation and space-related equipment. There is also an export ban on machinery.
But the ONS said it was “likely that some traders are ‘self-sanctioning’”, meaning that traders are being cautious in dealing with Russian groups.
Following this week’s rise in the benchmark European gas price to a record high of €292.50 per megawatt hour, asset manager PGIM Fixed Income on Wednesday revised down its forecast for the UK economy to an annual 0.1 contraction for next year from a 0.8 per cent expansion.
“The economy’s momentum fell sharply in Q2, and the costly pass-through of energy prices to consumers is expected to weigh heavily on consumption,” said Katharine Neiss, chief European economist at PGIM Fixed Income.
Source: Economy - ft.com
