REGIONAL REPORT
complexity, streamlining trade or boosting access to capital,” added Richard Austin, Head of Manufacturing, BDO.
In July 2024, the IMF’ s 2024 Article IV Consultation described the UK economy as approaching“ a soft landing, following a mild technical recession in 2023.” A modest recovery was projected, with 1.5 per cent growth in 2025.
In September 2024, the OECD projected GDP growth in the UK at 1.1 % in 2024 and 1.2 % in 2025, up from 0.1 % in 2023. Headline inflation was expected to continue moderating towards target, with energy and food price pressures having eased.
“ Employment growth has remained weak since the pandemic and inactivity has increased, most notably due to long-term sickness. Strengthening work incentives by reforming the work capability assessment to ensure that income support is not conditional upon being found unfit for work would help raise labour force participation. Successfully implementing the expanded childcare support programme, alongside reforms to apprenticeships aimed at hiring and training young, lower-skilled persons and early school leavers, would also boost employment growth,” it outlined in September 2024.
“ The United Kingdom remains among global leaders in reducing greenhouse gas emissions, but progress in the residential housing sector should accelerate to meet the net-zero target. The government’ s strategy to decarbonise housing could be strengthened through better pricing signals and timelines for tighter regulation. Expanding the availability of green financing products could help households overcome high up-front costs for investing in clean heating and energy-efficiency measures,” added the OECD.
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UK Prime Minister, Sir Keir Starmer, said the deal will be“ hugely important for sectors like car manufacturing, steel and aluminium and so many others.”
“ To build on this very positive announcement, we now need to see a comprehensive and forward-looking industrial strategy that strengthens the UK’ s domestic manufacturing resilience, boosts the skills supply, increased infrastructure investment and enhances our export competitiveness. By building on this momentum, UK government and industry together can unlock the full potential of UK manufacturing and drive sustained economic growth,” commented Stephen Phipson CBE, CEO, Make UK, on 8 May 2025.
A Brexit re-set
At time of writing, leaders from the EU and the UK were due to meet in London to discuss Sir Keir Starmer’ s much-anticipated Brexit reset deal. The summit is being heralded as a major step forward in undoing some of the damage of Brexit and re-establishing closer, more cooperative ties with the EU, especially on matters of security and defence. Issues such as fishing rights and youth mobility will be on the table.
Practical steps to cooperate with the EU on travel, trade, energy, climate, defence and a youth mobility scheme would unlock a new talent pool for UK businesses and new opportunities for UK workers.
Brexit has delivered a massive blow to the UK economy, one that is especially pronounced for the small and medium-sized enterprises that form the backbone of the UK’ s commercial and industrial landscape. It has led to increased costs, reduced competitiveness, shrinking access to European markets and a growing sense of frustration by manufacturers at the lack of political recognition for the challenges faced.
Since the June 2016 EU referendum, OBR( UK Office for Budget Responsibility) forecasts have assumed that the volume of UK imports and exports will both be 15 per cent lower than if the UK had remained in the EU. It assumes that the resulting reduction in the trade intensity of GDP will lead to a four per cent reduction in the potential productivity of the UK economy( relative to remaining in the EU), with the full effect felt after 15 years.
U. S. tariff impact
However, since all those forecasts, U. S. President Trump’ s tariffs on steel, aluminium and cars have sparked global shock waves.
A trade deal between the U. S. and UK was recently announced, which will see 25 % tariffs removed on steel and aluminium goods and rates on UK car exports to the U. S. cut from 27.5 % to 10 %. The lower car rate applies to the first 100,000 vehicles exported from the UK to the U. S. each year( almost the total exported last year, according to UK officials).
Stephen Phipson CBE, CEO, Make UK.
Image: Shutterstock. com.
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