Week Ahead in International Trade: Tourism talk, Northern Ireland trade and manufacturing report

Mon 18 Dec 2023
Posted by: Benjamin Roche
Trade News

Although Christmas is almost upon us, with MPs preparing for a brief hibernation during a Parliamentary recess starting tomorrow, international trade (and politics) keeps flowing.

There are set to be further talks in Northern Ireland over the return of a functioning Stormont executive, while prime minister Rishi Sunak faces COP28 questions from the Liaison Committee in the Commons.

Tourism stats

One area where UK services imports and exports are particularly strong is tourism, which made a £214bn contribution to the country’s GDP in 2022. Last year, the Office for National Statistics (ONS) found that overseas residents spent £26.5bn on visits to the country.

The overseas travel and tourism survey is among the reports out this week and it is set to give insight on the recent direction of the UK’s tourism industry, in light of the ongoing cost-of-living crisis, when it is released tomorrow.

The prospects for the UK’s travel agents are less than ideal, suggests research by the Opus Business Advisory Group reported by consultancy.uk. Opus senior business advisor Nick Hood suggests that many UK firms in the industry have “fragile finances”, . This week’s statistics may shed more light on the direction of tourism’s place in the UKs trade picture.

The Confederation of British Industry (CBI) monthly service sector survey is also released this week, on Friday (22 December), which will provide a broader picture of UK services.

Manufacturing report

Tomorrow also sees the release of another CBI report. The industrial trends survey for the month is likely to be of particular interest as the UK announces its carbon border tax[BR1][WBG2] , to be introduced by 2027, which will affect imports of goods such as iron and steel.

While UK manufacturing received a boost from last week’s announcement of a joint agreement between Italy, Japan and the UK to together manufacture a new generation of fighter aircraft by 2035, ONS stats released last week showed a 1.1% drop in UK manufacturing output in the month of October alone.

Imports of German cars contributed to a 6.1% rise in overall machinery and transport equipment stats, and the CBI survey will fill out the picture on UK manufacturing imports more broadly, particularly in light of faltering exports.

NI talks stall

The power-sharing arrangement at Stormont in Northern Ireland was set to be the subject of talks today (18 December), but efforts to forge an agreement before tomorrow’s Parliamentary recess have stalled today, reports the BBC.

The UK government has offered £2.5bn in funding to the cash-strapped region should an agreement be reached.

The end of power-sharing was a result of a disagreement over trade rules, with the Democratic Unionist Party (DUP) demanding changes to the Windsor Framework. Rishi Sunak said last week that he would “protect” Northern Ireland’s position as part of the UK’s internal market.

DUP leader Sir Jeffrey Donaldson has said he hopes the government “advance on their offer” of funding for Northern Ireland today, while discussions over the region’s trading arrangement are likely to continue.

Sunak questions

Rishi Sunak will be before MPs tomorrow to discuss his government’s Rwanda deportation policy, while also taking questions on a variety of other issues likely to include the declaration signed by countries at COP28 last week.

The pledge to move away from fossil fuels is under particular scrutiny by MPs given Sunak’s decision to push back a deadline for the end of petrol and diesel car sales from 2030 to 2035.

Sunak’s economic performance and priorities are also set to come under the spotlight following worse than expected GDP figures, released last week.

Other dates for the diary

  • Monday: EU inflation statistics released
  • Tuesday: Welsh and Scottish government budgets announced
  • Wednesday: International Human Solidarity Day 
  • Thursday: US GDP statistics released
  • Friday: SMMT car production figures released