A whole new trading world

As the South East basks in another mini heatwave, I step back to understand the change in the UK climate and how it has evolved over recent times.

During the pre-industrial era, research shows the South-East only experienced these current temperatures once every 50 years, however it is believed climate change has made these heatwaves here 10 times more likely and are looking to become even more frequent, so I suggest you stock up on suncream!

But as our weather climate continues to change around us, the World is also changing in its trading conditions.

Undoubtedly, the change in US politics over the last six months and the proposed imposition of new tariffs, are changing how the UK will look to trade in the future.

It was stated earlier this year by the UK Government, that globalisation is over amid the backdrop of higher levies, and whilst a trade deal has been announced between the UK and the US, research suggests that trust has fallen in the US as a trusted growth market. This is not unsurprising and I expect it will take some time for that trust to be rebuilt.

With the impact of Trump’s worldwide tariffs being proposed, exports from the UK will likely adapt to consider other global markets, especially following recent trade deals such as with India. It still, however, remains a volatile international trading market and economic growth for the UK remains stubbornly low.

Alongside this, increased domestic tax costs following the Autumn Budget are now being
felt, particularly with the changes in employer national insurance rates kicking in.

Fortunately, inflation has stabilised at much lower levels following the height back in 2023/24, and interest rates have gradually been declining too, but have recently been held at 4.25%.

Despite all the changes happening around the world, the UK – and in particular the South East – appears to continue to remain robust in its outlook.

With so much change over the last five years post-COVID, it seems that manufacturers have continued to remain positive, despite the different challenges being faced. That’s not to say manufacturers are not feeling these impacts, but are learning to adapt.

Certainly from a regional perspective, the announcement of Sizewell C construction should see an increase in economic growth within the region and also opportunities for local manufacturers in their support of this project too.

2025 seems to have brought with it a ‘New Trading World’ for businesses to navigate, and we hope the UK government will react appropriately in seeking to gain market access across like minded economies through new trade agreements, to help ensure our manufacturers still have new opportunities to trade, with strong global markets and build on for longer term growth.

With all this in mind, included within our current edition is Corporate Tax Director, Ivan Woolgrove, providing his possible predictions for the forthcoming Autumn budget amidst the backdrop of these effects, plus Ann Minson, also Corporate Tax Director, outlining an update and healthy reminder of the Research and Development Tax relief changes from last year.

I hope you enjoy reading this edition and wish you all an enjoyable Summer