There's been some welcome inflation and GDP data for the UK economy over the last few days, after turbulence in the bond markets caused concern for chancellor Rachel Reeves concerns last week. Ireland’s two leading parties are also on the brink of forming a government, while German meat, dairy and related products have been banned for UK import after an outbreak of foot-and-mouth disease.
All three stories feature in our weekly trade news digest.
The big picture: The UK economy enjoyed some stability after a turbulent week. On Wednesday (15 January), inflation came in at a 0.1% lower rate than expected in the latest release from the Office for National Statistics.
GDP statistics were also released yesterday (16 January), showing that the UK economy grew for the first time since August, achieving 0.1% growth. This was below economists’ forecast of 0.2%, however, according to reporting by the FT.
The numbers came following a rise in the gilt yield – the cost of borrowing for the UK government – and a fall in the value of the pound.
This drew a response from chancellor Rachel Reeves where she said that the “economic headwinds” faced by the country required the government to go “further and faster in our plan to kickstart economic growth”, as reported by the BBC.
Shadow chancellor Mel Stride argued Reeves was responsible for the gilt yield rise and the pound value drop, saying that “stagnation” had followed her Autumn Budget. She contended that “it was not reasonable to suggest” the blame lay with her as similar borrowing cost increases were also happening in other countries.
Good week/bad week: A good week for Ireland’s two largest political parties, who are set to return to government after agreeing a coalition with a “comfortable majority” in the country’s parliament. It means Fianna Fail leader Micheál Martin is likely to return as prime minister following his previous time in the role from 2020 to 2022, rotating with Fine Gael’s Simon Harris.
Less positive news for Indonesia, which was on the losing end of a dispute with the EU at the World Trade Organization (WTO) over the bloc’s “classification of palm oil and oil palm crop-based biofuels as being at high risk of indirect land-use change” in the country. Indonesia argued that this unfairly discriminated against its exports, but the WTO upheld the EU’s position.
The week in customs: The biggest customs story of the week was the UK’s ban on German pigs, sheep, cattle and associated products after an outbreak in the continental European nation of foot-and-mouth disease.
Our regular, member-exclusive Customs Corner feature returned for its first edition of 2025 this week. As well as the foot-and-mouth outbreak, it looked at the imminent removal of the 999L waiver and changes to wine excise duty.
How’s stat: 0.7% – the rate at which UK trade is predicted to grow between 2023 and 2033, according to a study from the Boston Consulting Group (BCG) out this week. It is 0.9% short of the predicted GDP growth rate, which means trade could become a smaller part of the UK’s GDP in the coming years.
Partner and associate director at BCG Tim Figures told the Times that, “if you are a country like the UK’s historically been, that sees the growth that comes from trade as a key component of your economic model, you don’t want to be in a situation like that”.
Quote of the week: “I don’t think US-EU trade is entirely insulated from China and I think that will be a challenge for the EU, as there is a circle to be squared.”
Chartered Institute of Export & International Affairs director of EU public affairs Fergus McReynolds on the challenge facing the EU in navigating its relationship with China ahead of the inauguration of US president Donald Trump.
What else we covered this week: Our new membership community lead, Jade Littlewood, featured in this week’s Membership Matters and gave an overview of member events, as well as at the Chartered Institute’s Technical Helpline support.
Our member-exclusive Trade Digest series looked at how Europe is rethinking its approach to US tech firms ahead of Trump’s return, as well as potential relief of EU sanctions for Syria at an upcoming meeting in Saudi Arabia.
The first Commodity in Focus feature of 2025 focused on coffee, and the news that, while the year’s high prices are set to fall slightly, the production of the beans faces major challenges from climate change and the EU’s deforestation regulation.
Coming up next week: The next Lunchtime Learning member-exclusive webinar will look at safety and security (S&s) declarations on Tuesday 21 January – you can sign up for that here.
A free public webinar on Thursday, meanwhile, will give attendees insight on the EU’s Digital Product Passport (DPP) and the new compliance requirements for manufacturers it’s set to raise. That one can be signed up for here.
True facts: “No nation was ever ruined, even seemingly the most disadvantageous.” So wrote Benjamin Franklin, who was born 319 years ago today.
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