This week in trade will see UK chancellor Rachel Reeves outline the government’s growth plans, which could include rumoured airport expansions and reforms to support regional development.
China’s manufacturers are also bracing themselves ahead of US president Donald Trump’s first round of threatened tariffs, due to be imposed on Saturday (1 February).
Back in the UK, businesses importing goods from the EU should ensure that they, and their suppliers, are prepared for new safety and security (S&S) requirements coming into force for European goods entering Britain.
Significant Reeves speech
After a rocky start to the year, chancellor Rachel Reeves will be delivering a speech on growth this week on Wednesday (29 January).
The speech follows data releases suggesting that the National Insurance Contribution (NIC) increase levied at employers in her Autumn Budget is driving firms to cut staff, with the latest UK PMI release also highlighting that job openings have fallen to a 15-month low.
There’s also strong speculation that plans to expand airport capacity in the capital will be announced, with Heathrow and Gatwick rumoured to be in line for extra runways. Expansion plans for Stansted and London City Airport have already been signed off.
Given the climate concerns surrounding the expansion, Reeves was asked how Labour will balance its climate commitments with growth plans by Laura Kuenssberg yesterday (26 January). In response, she all but confirmed the plans, saying:
“There’s huge investment going on in electric planes, and also a third runway will mean that instead of circling London, flights can land at Heathrow.”
Chartered Institute of Export & International Trade director general Marco Forgione is among those to have welcomed the expansion plans:
“Airports are essential to driving UK trade growth, not only in terms of goods exports but also – as our report with Flint Global shows – in supporting UK services exports, which form around 80% of the UK economy.”
He also urged the government to focus on boosting infrastructure across the country, “including road, rail and ports, to keep up with the huge investment taking place around the world”.
Regional boost
Ahead of the speech the Treasury also announced that supporting the UK’s regions would be a linchpin of future growth plans, with Reeves set to unveil a package of reforms to this end.
The new reforms are designed to empower local leaders, giving them more control over investment and projects linked to regional growth strategies, with the National Wealth Fund set to launch a series of strategic partnerships with authorities including Greater Manchester, West Yorkshire, West Midlands, and Glasgow City Region.
The announcement states that these partnerships will “provide enhanced, hands-on support with tailored commercial and financial advice to help regions develop and secure long-term investment opportunities”.
Similarly, the Office for Investment is piloting an initiative to connect local leaders in cities – including Liverpool City Region and North East Combined Authorities – with central government, with the aim of providing the expertise to “turn regional growth plans into commercially attractive investment opportunities”.
China PMI
China’s January PMI was released today, with the reported 49.1 figure slumping beneath the pre-announcement forecasts of 50.1 put forward in a Reuters poll of economists.
The sub-50 figure indicates industry contraction, a surprise in light of the previous strong quarter and an expected surge in activity ahead of the Lunar New Year.
The non-manufacturing PMI, also out today, fell to 50.2, down from last month’s 52.2.
Both of these figures will be assessed in light of US president Donald comments regarding tariffs on China. Ahead of the presidential election in November, he indicated his willingness to put heavy new tariffs on imports from the superpower, but last week indicated he could dial down the proposed 60% levies to 10%.
Although this could be implemented as soon as Saturday, according to the BBC, Trump has since said he “would rather not” impose tariffs on China, raising questions as to whether he will go ahead with the levy.
Also set for levies are imports from the US’s neighbours Mexico and Canada. Both nations face a 25% tariff, imposed in response to the “mass numbers of people and fentanyl” Trump accused them of allowing across US borders.
S&S declarations
From Friday (31 January), there will be a new requirement on goods entering the UK from the EU: safety and security (S&S) declarations.
As we noted in our recent Ask the Experts feature on the subject, the end of this month will bring the removal of the waiver currently in place for S&S information to be provided on EU imports into Britain. Carriers will then be responsible for ensuring a declaration – also known as an Entry Summary (ENS) declaration – is submitted.
A Chartered Institute member-exclusive webinar session from the Lunchtime Learning series covered the changes last week. A majority of attendees at that session said they have yet to start submitting the declarations, with over a third saying they were lacking in confidence on how to do so.
Those looking for extra support can get it with the Chartered Institute’s Imports Advisory Practice, which can be accessed here.
Orban threat
Viktor Orban, the prime minister of Hungary, has suggested he would consider ending sanctions on Russia if Ukraine does not restore a gas pipeline from Russia to Hungary.
The FT reports that he is considering the move ahead of a Friday deadline for renewing the sanctions. He told Hungary’s state radio station:
“The issue of extending the sanctions is on the agenda. I pulled the handbrake and asked the European leaders to understand that this cannot continue. The Ukrainians want help, for example, to sanction the Russians. Then please reopen the gas route.”
Ukraine took the opportunity not to renew a transit agreement with Russia, enabling gas to flow through its remaining pipeline to Europe, at the end of 2024.
The decision received criticism from some European nations still dependent on Russian gas, with some analysts also warning the move could see a spike in energy costs across the continent.
Other dates in the diary
Monday – EU foreign affairs ministers meet on Ukraine, Syria and Georgia/Moldova
Tuesday – Arbitration hearing in UK-EU dispute over sand eels
Wednesday – Chinese New Year: Year of the Snake
Thursday – ECB interest rate decision
Friday – EU gas price cap expires
Saturday – Alcohol duty increase takes effect
Sunday – GRAMMY Awards
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