The continuing impacts of climate change have meant the UK’s farmers have missed out on over £800m in revenue, according to new research from an environmental non-profit.

Elsewhere, the UN’s trade watchdog estimates that global economic and trade growth is set to slow in 2025, the UK government is setting out millions in funding for “innovative” freight trials, and the UK and Norway have announced a new defence agreement.

Tough times for farmers

UK farmers are facing significant financial losses due to climate change, according to research from the Energy & Climate Intelligence Unit (ECIU).

The non-profit organisation said that they expected farmers to lose out on over £800m worth of  revenue as a result of one of the worst harvests on record, following extreme rainfall in autumn and winter of 2023/2024.

The poor harvest was partially offset by raised commodity prices following Russia’s invasion of Ukraine. With this effect now gone, farmers are likely to feel the loss of goods “much more acutely”.

Tom Lancaster, land, food and farming analyst at the ECIU, said:

“This has been another torrid year for many farmers in the UK, with the pendulum swinging from too wet, to too hot and dry.

“British farmers have once again been left counting the costs of climate change, with four fifths now concerned about their ability to make a living due to the fast changing climate.”

Farmers across Europe are also suffering. The FT reported that futures on agricultural commodities, like grains, sugar and wheat, have sunk as European producers face higher input costs and stronger competition.

UN trade estimates

According to UN Trade and Development (UNCTAD), growth is expected to slow to 2.6% in 2025, down from 2.9% in 2024, as geopolitical uncertainty and financial volatility continue to batter the global economy.

Global trade increased by 4% earlier in the year, driven partly by firms trying to beat the US tariff deadline, increased investment in AI and stronger trade between countries in the Global South.

Once these factors were removed, however, UNCTAD warned that trade growth was only estimated at 2.5-3% in 2025, with additional fears that this might fall further as frontloading ends and the Trump tariffs continue to bite.

Defence deal

The UK and Norway have announced a new defence agreement that will see naval forces from both operate jointly in the North Atlantic.

UK prime minister Sir Keir Starmer met with Norwegian counterpart, Jonas Støre, to sign the ‘Lunna House Agreement’ that the government said would protect UK’s critical infrastructure from Russian vessels.

At the heart of the deal is the Type-26 Frigates that made up a £10bn shipbuilding deal earlier this year, with Scottish ports expected to benefit.

Innovation for freight funding

The government has announced £1.1m in funding for trials of new freight and transport methods.

According to a press release from the Department for Transport, nine SMEs have been awarded funding of £130,000 for each company to help them trial innovations in shipping and transport.

Some of the winners include Supply Chain Analysis’s AI planning and scheduling tool, SLANT Sustainable Technologies’ electric trailer system and a new high-speed rail freight operation from GoLink Advisory Group.

Aviation, maritime and decarbonisation minister Kier Mather said the funding “will allow businesses to start trialling their revolutionary technology on our roads, ports and railways, meaning they can make an immediate difference and help grow the economy”.

Elsewhere in the headlines

·       Starmer hosted German president Frank-Walter Steinmeier yesterday in Downing Street

Starmer is also expected to make his first official visit to China in January next year, according to reports. This would make him the first PM to visit the country since Theresa May in 2018, although this trip is purportedly dependent on the UK approving China’s controversial plans for a new London Embassy.

·       A vessel carrying liquified gas was hijacked off the coast of Equatorial Guinea. Five seafarers are reported kidnapped, with another lightly injured

Yesterday in Trade

·       The EU has reached an agreement to end Russian gas imports

·       Additionally, Brussels is weighing up new targets for critical products to be made within Europe

·       US online retail sales beat expectations in December following ‘Cyber Monday’

You can read these stories and more in yesterday's edition of The Day in Trade.