A government spending review, a meeting of world leaders in Canada for the G7 summit and insight into Incoterms from the Chartered Institute of Export & International Trade are all on the agenda this week.
Spending review
UK chancellor Rachel Reeves will be delivering the government’s spending review on Wednesday (11 June), setting out day-to-day government spending for the next three years and longer-term investment for the next four years.
Ahead of Wednesday, pre-planned announcements being touted by the government are the £113bn in investment directed at energy, transport and infrastructure projects, announced last month.
Reeves is expected to announce a new Manchester-Liverpool railway line, and £15.6bn in regional transport schemes between the 2027-28 fiscal year and 2031-32. These include projects in Birmingham, Greater Manchester and Yorkshire.
This weekend, an £86bn round of research and development funding was also announced in areas including batteries, drug treatment, AI and defence technology, with the aim of boosting jobs and growth across regions.
Day-to-day drama
However, limited growth, tax revenue and “economic headroom” (the budget surplus used to cushion the blow of economic shocks) have led to warnings for a number of government department heads that they could be disappointed by the spending review.
The Institute for Fiscal Studies wrote in its pre-review report that, because growth rates have been “relatively modest, sharp trade-offs are unavoidable”.
Prime minister Sir Keir Starmer’s announcements on defence spending last week, which included aims to increase defence spending as a percentage of GDP from 2.5% by 2029 and to 3% by 2034, alongside the consistently high allocation to the Department of Health and Social Care (almost 40% of all day-to-day spending), has meant difficult decisions elsewhere.
Cuts from areas including policing budgets, the civil service, local government, foreign aid, education and culture have been predicted.
G7 in Canada
The G7 summit is set to take place starting on Sunday (15 June) and lasting until next Tuesday.
World leaders will gather in Kananaskis, Canada, to discuss topics including “international peace and security” and “global economic stability”, with three key “missions” published on Saturday:
- Protecting our communities and the world
- Building energy security and accelerating the digital transition
- Securing the partnerships of the future
Under energy security and digital transition, the release highlighted “fortifying critical mineral supply chains”, which have been in headlines recently owing to US and German reports that manufacturers have not been granted export licenses.
Ukrainian president Volodymyr Zelensky is expected to seek time with US president Donald Trump to discuss Russia, following its attacks on residential Ukrainian areas. Trump has said Russia’s president Vladimir Putin had told him he “would have to retaliate” during a call last week, in response to a Ukrainian mission to damage military equipment deep within Russian borders.
Stat releases
Both China and the US release their Consumer Price Index (CPI) numbers this week, today and Wednesday respectively.
China has already reported that its (CPI) has declined for the fourth month in a row, with exports also plummeting 34% compared to this time last year.
Trade barriers between the two countries have been expected to increase the cost of goods for consumers, with tariff rates standing at 10% on US goods entering China and 30% on Chinese imports to the US.
So far rates have remained relatively stable in the US following a drop in consumer confidence. This sentiment reversed after the first round of trade talks between the two nations since tariff walls went up, held last month in Geneva. With a further round of talks confirmed last week, Friday’s US Consumer Sentiment Index will reveal whether the announcement continues this trend.
On Friday, EU foreign trade statistics will also be released.
Incoterms insight
The Chartered Institute of Export & International Trade is hosting a free webinar on Wednesday to explain ‘Incoterms in supply chain and logistics – determining responsibility’.
Featuring advice from the Chartered Institute, DPD, DFDS and AmWorld, the webinar will “introduce how Incoterms work, why they are so significant, the distinction between direct and indirect representation in customs procedures, and how recent regulatory changes in the UK and EU could impact best practice”.
To sign up for the webinar, which will be held at 2pm, you can sign up here.
Other dates in the diary:
Monday – Japan Q1 GDP
Tuesday – EIA short-term energy outlook
Wednesday – Polish parliament holds vote of confidence following presidential election
Thursday – OECD economic survey of Germany
Friday – Tim Walz speaks at Center for American Progress in DC
Saturday – Pope Leo XIV speaks in Chicago
Sunday – Commencement addresses at Dartmouth and Stanford universities
