Germany exports more to Great Britain
German exports to the UK are on the verge of a comeback after years of decline, partly due to Brexit: they could grow again this year for the first time since 2015.
From January to August, German companies sold goods worth 48 billion euros to the United Kingdom - an increase of 11.4 percent compared with the same period last year. This is according to data from the Federal Statistical Office. If the upward trend continues until the end of the year, it would be the first increase after six consecutive years of shrinking exports.
The negative series began with the year of the Brexit referendum in 2016, in which a narrow majority of Britons voted in favor of leaving the EU, which has since been completed.
Despite the positive development, however, the Association of German Chambers of Industry and Commerce (DIHK) sees no reason to cheer, as Brexit and the recent turbulence surrounding the British national currency, the pound, have made business more difficult.
"This is anything but a turnaround in German-UK trade for the better," DIHK foreign trade chief Volker Treier told Reuters news agency on Wednesday. "In UK business, the outlook for the German economy remains bleak."
He added that rising exports to the UK for the first time in years were just one sign of the hugely piled-up costs that companies were trying to pass on.
"On the contrary, Brexit continues to create planning and legal uncertainty for internationally active German companies," Treier said. "Small and medium-sized businesses in particular are finding themselves burdened by the new regulatory density that is emerging."
British plans to deviate from EU rules and standards - for example, in data protection, food or chemicals - also increased costs and uncertainty for German companies doing business in the UK.
"Added to this is the tremor and confusion in the capital markets and the British economy as a whole, triggered by stimulus and tax packages that were first announced and then partly withdrawn," Treier said. "The associated exchange rate fluctuations are adding to the uncertainties in German-UK business relations."
On Monday, new Treasury Secretary Jeremy Hunt overturned most of Prime Minister Liz Truss' economic policy plans. This is also seen as an attempt to stem a dramatic loss of confidence among investors, who doubted the viability of the debt-financed fiscal plan initially considered.
Truss has admitted mistakes in her economic concept, but is sticking to her post. "German foreign trade is already in difficult waters in view of the global crises," said DIHK expert Treier. "Reduced predictability in business with the UK, one of our most important trading partners, is now unfortunately added to this."
In the ranking of Germany's most important trading partners, the UK ranked tenth last year. In the year of the Brexit referendum in 2016, the country was still the fifth most important trading partner. According to the DIHK, goods worth 65.3 billion euros were shipped to the island last year - a good 20 billion less than in 2016.