UK imports and exports of goods from and to the EU rose markedly in Q1 (Chart B) with historically strong growth, probably reflecting stockpiling by both UK and EU firms. Stockbuilding by UK firms appears to have boosted domestic manufacturing output, as well as perhaps some components of services output such as warehousing.
The boost to growth from Brexit-related stockbuilding is likely to be temporary. Stockbuilding only increases growth if the rise in stock levels is larger than in the previous period. If companies stockbuild at a slower pace in Q2, maintain their stock levels or de-stock, it will drag on growth.
In the May Inflation Report projection, the MPC judged that stockbuilding had boosted GDP growth in Q1, but that it would drag on growth by a similar amount in Q2.