It’s a critical week for the UK economy, as the chancellor prepares to deliver her next budget on Wednesday.
There are reports today that the budget could include new measures to support businesses in Northern Ireland navigating new post-Brexit trade rules, while industry commentators are warning against “death by a thousand taxes”.
Elsewhere, the EU and US are meeting to discuss both trade and the Ukraine war, while the UK government has been setting out its new Critical Minerals Strategy.
Budget trade measures
This week’s budget announcement from chancellor Rachel Reeves could include £16m in fresh support for Northern Irish businesses managing post-Brexit trade rules under the Windsor Framework, according to a report by the BBC.
Among the measures that could be included in the package are a business concierge service for the region, as well as a trade resolution centre and an ‘AI goods adviser’. Intertrade UK would also be funded to help SMEs access investment opportunities.
A source from the treasury told the BBC, "Northern Ireland's SMEs, who need more help to realise the promise of dual market access, and Great Britain-based companies, who want to capitalise on the UK-wide market, will both see the benefit.
They added that, “despite a tough fiscal situation, the chancellor sees this as an absolute priority”.
The changes follow recommendations issued as part of the Windsor Framework Independent Monitoring Report, which was presented to the government last month.
Tax warning
Elsewhere in the pre-budget discussion, Confederation of British Industry (CBI) chief executive Rain Newton-Smith called for the chancellor to “make hard choices” and “prove” that growth is a priority, warning against “death by a thousand taxes”.
Speaking at a CBI conference today, business and trade secretary Peter Kyle said some speculation ahead of the budget had been “wildly out of line”.
Reeves is also keen to emphasise the growth impacts of the recent trade agreement with India and the UK’s ongoing ‘reset’ with the EU, according to a report today in Politico.
EU-US tariff talks
The EU and US will discuss tariffs today in a meeting of ministers from the bloc with US trade representative Jamieson Greer and commerce secretary Howard Lutnick.
Politico reported at the end of last week that the EU was planning to request tariff exemptions for a range of European goods, including whiskey, pasta, cheese and medical equipment, among others. These goods were not addressed by the deal struck between Brussels and Washington in July.
The US has recently been removing tariffs on agricultural products from Latin American countries in a bid to ease cost-of-living pressures on American consumers. Fruit products, coffee and fertiliser have all been among the goods to be exempted.
According to Reuters, the two sides will also discuss recent restrictions placed – then postponed – by China on rare earth and semiconductor exports. That comes as the bloc considers changes to foreign investment rules aimed at ensuring China’s companies do not benefit from the EU market without sharing technology.
The US side is also likely to pressure the Europeans on expediting the removal of tariffs on US goods promised by the bloc under the July deal, something which is currently scheduled for next year following approval by the European Parliament and EU governments. Greer said this was “unfortunate” in remarks to the FT earlier this month.
Critical minerals and electricity support
The UK government is to supply £50m in new funding for critical minerals projects, it has announced. It forms part of a new Critical Minerals Strategy set out by prime minister Sir Keir Starmer.
The strategy will look to ease “overreliance on foreign imports” of the minerals, which the government says leaves the country vulnerable from external supply shocks. It notes that UK demand for copper alone is set to almost double by 2025, and lithium demand is expected to increase by 1,100%.
“No more than 60% of the UK’s supply of any one critical mineral is imported from any one country by 2035” under the plans, it adds.
Starmer said as part of the announcement that “we are taking decisive action [by] boosting domestic production, ramping up recycling, and backing British businesses with the investment they need to compete on the international stage and drive down the cost of living for people at home”.
Marco Forgione, director general of the Chartered Institute of Export & International Trade, said of the announcement:
“From the international to the domestic, the strategy places emphasis on regional clusters—from Cornwall to Teesside—which will be the backbone of our domestic capability, particularly in relation to defence supply chains. Our members, all around the UK, will be impacted by growth or decline in these areas.
“Trade and investment are, indeed, two key drivers of growth and it’s important that the strategy recognises the importance of mobilising investment through promoting the UK’s capital markets to attract investment into critical minerals supply chains.”
You can read his full response here.
The government has also announced today that it is launching a consultation on the British Industrial Competitiveness Scheme, which it says will cut electricity bills for over 7,000 businesses and give increased access to finance to a range of firms.
The consultation will determine eligibility for the scheme, which will begin supporting firms from April 2027, the announcement adds.
Elsewhere in the headlines
· Kenya has introduced a new app to “save time and money” in customs processing, developed through a partnership with the British High Commission and TradeMark Africa
· Wholesale gas prices (and European defence stocks) are down today as the US, Ukraine and EU representatives meet in Geneva, Switzerland, to discuss the US’ latest plan to end the war in Ukraine
· China has proposed stronger ties with Germany in bilateral trade talks that follow pressure over rare earth export curbs by the Asian nation
Other dates for the diary
Monday: EU-African Union summit takes place in Angola, while EU trade ministers meet in Brussels to discuss US ties
Tuesday: UN International Day for the Elimination of Violence Against Women
Wednesday: UK budget announcement and OECD Environmental Outlook report published
Thursday: Deadline for Ukraine to agree US’ draft peace deal in Russia war (according to Trump)
Friday: Black Friday amid planned ‘Make Amazon Pay’ US protest and strike campaign
Saturday: Your Party conference in Liverpool
Sunday: Beginning of Advent
