UK Economy Today is Based on Services and Digital Trade, FTA and
39 Regions Plus CPTPP
·
Trade-dependent economy:
Exports and imports of goods and services accounted for 62% of UK GDP in
2024.
·
Trade challenges:
UK trade has slowed due to Brexit, COVID-19, and the global energy crisis.
·
Services outperform goods:
Services exports grew 73% (2010–2024), while goods exports remained
almost unchanged.
·
Global leader in services:
The UK is the only G7 country exporting more services than goods by
value.
·
Brexit impact:
UK businesses face higher trade costs and additional border checks when
trading with the EU.
·
Major trading partners:
The EU remains the largest trading partner, followed by the United
States, China, Switzerland, and India.
·
Economic growth:
Real GDP growth averaged 1.5% annually (2010–2024), with weak
productivity and investment.
·
Growth strategy:
The UK is promoting investment, infrastructure, industrial policy, and trade
reforms to improve productivity.
·
Trade Strategy 2025:
Focuses on expanding exports (especially for SMEs), reducing non-tariff
barriers, strengthening supply chains, and economic security.
·
Strong WTO support:
The UK continues to support the rules-based multilateral trading system
and WTO reforms.
·
Regional Trade Agreements (RTAs):
The UK has 39 RTAs in force, including agreements with Australia, New
Zealand, Japan, CPTPP, and India (signed July 2025).
·
Developing Countries Trading Scheme
(DCTS): Provides preferential tariffs
and simpler rules of origin for developing countries and LDCs.
·
Foreign investment:
The UK maintains an open investment regime, with security reviews for
acquisitions in 17 sensitive sectors.
·
UK Global Tariff:
Average MFN tariff reduced from 6.3% (2019) to 4.8% (2024).
·
Trade facilitation:
Customs procedures have been simplified through digitalisation
and faster clearance systems.
·
SPS reforms:
Introducing a risk-based border control system to reduce checks on
low-risk imports.
·
Trade remedies:
The UK applies relatively few anti-dumping and countervailing measures,
mainly targeting China's steel and aluminium
products.
·
Business support:
Strong support for R&D, SMEs, and exporters through tax incentives
and UK Export Finance (UKEF).
·
Subsidy control:
A new subsidy regime (2023) requires greater transparency and assessment of
trade impacts.
·
Government procurement:
The Procurement Act 2023 simplified procurement rules and increased
transparency.
·
Agriculture:
Agricultural support remains at GBP 4 billion, with higher tariffs
protecting the sector.
·
Manufacturing:
The UK remains competitive in aerospace, automotive, pharmaceuticals, green
technologies, and petrochemicals.
·
Green economy:
Renewable energy generated 50.8% of electricity in 2024, and the UK
closed its last coal plant.
·
Carbon Border Adjustment Mechanism
(CBAM): Planned for 2027, covering
imports such as cement, aluminium, fertilisers, hydrogen, and iron & steel.
·
Financial services:
The UK remains a global financial centre with
an open framework for foreign firms.
·
Digital economy:
The UK accounts for nearly 10% of global digitally delivered services
exports and promotes paperless trade through the Electronic Trade
Documents Act 2023.
·
Overall conclusion:
The UK continues to pursue open trade, WTO engagement, digital trade, green
growth, and new trade agreements, while addressing the trade and
productivity challenges created by Brexit.