International Trade - Latest News

Latest News

19th March 2018

BCC: Business welcomes milestone agreement on Brexit transition period

Commenting on the agreement of a ‘status quo’ transition period by UK and EU27 Brexit negotiators, Dr Adam Marshall, Director General of the British Chambers of Commerce, said:

“This is a milestone that many businesses across the UK have been waiting for. The agreement of a status quo transition period is great news for trading firms on both sides of the Channel, as it means that they will face little or no change in day-to-day business in the short term.

“While some companies would have liked to see copper-bottomed legal guarantees around the transition, the political agreement reached in Brussels is sufficient for most businesses to plan ahead with a greater degree of confidence. Many companies will now have the clarity they require to proceed with investment and hiring strategies that would otherwise have remained in question.

“In the interests of business across Europe, both sides must now do everything in their power to ensure that the transition does not become a political football later in the negotiation process.”

On citizens’ rights, Marshall said:

“Businesses across the UK will be particularly relieved that they will be able to hire and retain European nationals on similar terms over the next two years, given the significant skills gaps they continue to contend with.”

On trade agreements, he added:

“A priority for both the UK and the EU must now be to secure agreement from our shared trading partners to keeping the status quo on existing EU free trade agreements. Any loss of market access would hurt UK exporters and European supply chains alike. It is excellent that the UK and the EU agree on the need for continuity in existing trade agreements; together, we must now seek confirmation from our trading partners.

“While businesses are interested in the prospect of the UK being able to sign new trade agreements during the transition period, the top priority must be to retain market access on the same terms with existing trading partners.”

On the future UK/EU trading relationship, Marshall concluded:

“Over the next few days, securing assent from the European Council must be the top priority. Over the coming weeks and months, the UK government and the European Commission must adopt a laser-like focus on the future trading relationship – and swiftly conclude a deal that minimises further adjustment costs and that answers the many practical questions that trading businesses still face.

“A zero-tariff agreement is a no-brainer for both sides. However, businesses need to see more pragmatic positions from both sides on customs and cooperation in services.”

19th March 2018

BCC forecast: UK economy remains subdued despite uplift from strong global growth

The British Chambers of Commerce (BCC) has today (Monday) upgraded its growth expectations for the UK economy, raising its forecast for GDP from 1.1% to 1.4% in 2018 and from 1.3% to 1.5% for 2019, and its first forecasts for 2020 is for 1.6% growth.

The upgrade to the leading business group’s forecast is largely driven by slightly stronger than expected levels of consumer spending. The UK’s export performance is expected to remain robust on the back of strong global growth, particularly in key markets such as the Eurozone and US. That said, with imports also likely to continue to grow at a good rate, the contribution of net trade to UK GDP growth over the near term is to be limited, particularly with little evidence of a sterling boost to the UK’s overall net trade position.

Despite the upgrades, UK GDP growth is set to remain well below the historical average throughout the forecast period. Our latest forecast also implies that the UK will remain among the worst performing economies in the G7 until 2020 at the earliest.

Productivity is expected to improve marginally over the forecast period but will remain subdued, hampered by deep rooted problems in the economy, including skills shortages and chronic underinvestment in the UK’s infrastructure.

Inflation is now expected to have peaked, and will begin easing in the near term as the impact of the post-EU referendum slide in sterling fades. While average earnings are now expected to grow by slightly more than expected in our previous forecast, real earnings growth is not expected to return to positive territory until 2019. Our new forecast is that the next increase in UK official interest rates, to 0.75%, will occur in Q2 2018, followed by another raise in the first quarter of 2019.

The BCC expects UK public sector borrowing to be £13.4bn higher over the next three years than forecast by the Office for Budget Responsibility at last week’s Spring Statement.

The muted levels of growth forecast for the UK economy reinforces the BCC’s calls for greater attention and investment to be focused on improving the UK business environment, particularly ‘fixing the fundamentals’ and taking action to crowd in more private-sector investment. Distracted by Brexit, Westminster is failing to enact an ambitious growth plan for the economy. To create conditions for growth, action is needed on the issues holding businesses back, including mounting skills shortages, delivery of long-planned road and rail infrastructure projects, poor mobile connectivity, and high upfront costs for businesses.

Key points in the forecast:
• UK GDP growth forecast for 2018 is upgraded from 1.1% to 1.4%, and is expected to grow to 1.5% in 2019 (upgraded from 1.3%), and the first forecast of 2020 growth is 1.6%
• Consumer spending has been upgraded from 1.0% to 1.2%, and is expected to grow by 1.4% and 1.6% in 2019 and 2020 respectively
• Average earnings have been upgraded from 2.5% to 2.7% in 2018, and is expected to grow by 2.9% in 2019 and 3.0% in 2020
• Productivity is expected to grow by 0.9% in 2018, 1.1% in 2019 and 1.3% in 2020
• Inflation of 2.9% is forecast for this year, and 2.6% and 2.2% in 2019 and 2020 respectively
• Our new forecast is that the next increase in UK official interest rates, by 0.25%, will occur in the second quarter of 2018, followed by another raise in the first quarter of 2019
• Export growth is expected to grow at 3.6% in 2018, 3.4% in 2019 and 3.0% in 2020, while import growth is expected to grow by 2.8% in 2018, 2.9% in 2019 and 3.1% in 2020
• Business investment growth has been upgraded from 0.8% to 1.1% for 2018 and is expected to grow by 1.3% in 2019 and 1.5% in 2020
• Looking at sectors, manufacturing is expected to grow by 1.4%, 1.5% and 1.6% across the forecast period. Construction growth is set to remain muted for 2018 at 1.1% and is expected to grow at 1.4% and 1.7% thereafter. Services sector growth has been upgraded from 1.3% to 1.5% in 2018, and is forecast to grow at 1.7% and 1.8% in the following years
• Public sector net borrowing is expected to total £49.7 billion in 2017/18, £45.8 billion in 2018/19 and £34 billion in 2019/20.

Dr Adam Marshall, Director General of the British Chambers of Commerce, said:

“While many individual businesses are doing well, the inescapable conclusion from our forecast is that the UK economy as a whole should be performing better than it is, given robust and sustained global growth.

“Although strong global conditions have given the UK a bit of a boost through higher export demand in recent months, we have serious concerns about the potential for further growth here at home when the performance of key trading partners slows. Sustained skills and labour shortages are also a real issue, with businesses reporting significant difficulties recruiting and retaining the people they need.

“Political uncertainty aside, the biggest brake on higher UK growth is a lack of concerted action to ‘fix the fundamentals’ here at home, with government attention distracted by Brexit.

“A concerted effort to get the basics right on connectivity, infrastructure, training, immigration, procurement and business costs would give rise to a wave of investment and significant productivity improvements. The power to kick-start the UK economy, and raise the trend rate of growth above the current sluggish levels, lies in Westminster, not in Brussels – and businesses will respond to action by delivering investment, higher productivity, and the increased wages we all want to see.”

Suren Thiru, Head of Economics at the British Chambers of Commerce, said:

“We’ve slightly upgraded our near-term outlook for the UK economy, with a moderate pick-up in pay growth expected to support a modest improvement in consumer spending, a key driver of the UK economy.

“Export growth is also expected to remain robust as stronger global economic growth continues to support demand for UK goods and services. However, with little evidence of import substitution by consumers or businesses despite their high cost, the contribution of net trade to UK GDP growth over the next few years is likely to remain modest.

“Despite the upward revisions, our latest forecasts suggest that the UK is set for an extended period of sub-par growth – a damning indictment of the state of the UK economy given the rapidly improving global growth outlook. The persistent economic imbalances, including a dependence on consumer expenditure and service sector output as the main drivers of GDP growth, continues to hinder the UK’s growth prospects and leaves the UK more exposed to economic shocks.

“Our forecast implicitly assumes a relatively smooth Brexit with a transitional arrangement where trading conditions will be largely unchanged. Failure to achieve such an outcome would likely weigh on UK economic activity over the near term.”

5th March 2018

BCC comments on Theresa May Brexit speech: positive ambition – now for the detail

Commenting on the Prime Minister’s speech at the Mansion House today (Friday) outlining the government’s Brexit objectives, Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“Businesses will appreciate the Prime Minister’s ambition and her determination to secure a wide-ranging agreement in the next phase of negotiations with the EU. Theresa May’s commitment to supporting the interests of business and enterprise will reassure firms that their needs will be front and centre in the negotiations ahead.

“Businesses will still have to wait for some of the detail they need to plan ahead with confidence, but the Prime Minister was clearer and more realistic than ever before on the political choices and economic trade-offs ahead.

“The practical issues that matter for business and trade must now become the absolute priority. The time for high-level statements is over, and attention must now turn to the painstaking process of getting the details right.

“Over the next fortnight, it is imperative for both sides to come to a swift agreement on transitional arrangements, to give businesses further certainty over short-term trading conditions, and to move swiftly on to detailed and constructive discussions about the future UK-EU relationship. Businesses on both sides of the Channel will be dismayed if the parties opt for high-volume megaphone blasts over pragmatic and practical concerns.”

Commenting further on aspects of the Prime Minister’s speech, Anastassia Beliakova, Head of Trade Policy at the British Chambers of Commerce, added:

On tariffs and mutual recognition, she said:

“Although some barriers to trade are inevitable as the UK leaves the EU, there are some that can and must be avoided. The Prime Minister’s commitment to seek a tariff-free trading arrangement, and to aim to minimise costs and red tape behind the border, will be welcomed by businesses on both sides.”

On customs and border management, she said:

“Much of the debate has been focussed on the merits and drawbacks of whether the UK should be part of a customs union with the European Union, but there are many other issues related to cross-border trade that need as much, if not more, attention.

“Transit of vehicles, validity of licences, inland health and safety checks on goods, and the waiving of unnecessary declarations are all critical areas for negotiations – and would significantly ease future burdens on businesses. This is the sort of the detail that needs to be addressed, and swiftly, to give businesses greater confidence.

“Having reiterated the proposal for a customs partnership with the EU, whereby the UK collects two different sets of tariffs, the Prime Minister must now outline how this could work in practice – as this could potentially be very challenging for businesses to implement. The ‘highly streamlined option’ would also require a significant amount of investment, work and cooperation from customs on both sides – and if this is the preferred approach, the UK and the EU must agree next steps without delay.”

On future regulatory cooperation, she said:

“The Prime Minister is right to highlight sectors like aviation, chemicals and pharmaceuticals, where future co-operation between the UK and the EU is both desired by industry and eminently sensible. A pragmatic approach would seek to avoid the replication of processes and agencies, where a joint approach makes clear business sense.”

On the maintenance of a unified market within the United Kingdom, she added:

“We welcome the Prime Minister’s steadfast commitment to maintaining the integrity of the United Kingdom as a unified market for business. The ability to trade between the nations of the UK without expensive, unnecessary additional compliance measures is absolutely crucial.”

On immigration and labour markets, Beliakova said:

“At a time of critical labour shortages in many parts of the UK, a pragmatic approach to immigration is sorely needed. Business welcomed the recent clarity from government around the rules for EU nationals arriving during the transition period, but will want to see an ambitious agreement between the UK and the EU that allows businesses across the continent to get the skills they need in future.”

26th February 2018

BCC comments on Jeremy Corbyn’s speech

Commenting on Jeremy Corbyn’s speech on the Labour Party’s position on Brexit and future UK-EU customs arrangements, Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:
“Jeremy Corbyn’s position on the customs union, like the Government’s, feels more political than practical for business. The priority must be to delve far more into the detail and negotiate a pragmatic deal on both customs and regulatory recognition that allows businesses to get their goods across borders as quickly as possible.

“Businesses are interested in clarity and certainty, not Westminster political dividing lines. Westminster is still having an inward-facing conversation, when what businesses need is a clear understanding of how the UK’s political establishment will deliver results in a tough negotiation with Brussels.

“Trading businesses want to see a practical and pragmatic customs relationship between the UK and the European Union in future that reduces costs and delays at borders as much as possible. Most, however, stop short of recommending a particular model because all have both benefits and drawbacks, which must be more fully explored.”

On transition, Marshall said:
“Our business communities agree with Mr Corbyn that a comprehensive transition period is needed to prevent two sets of costly adjustments to new trading conditions. Given that the Government has made similar points, all parties at Westminster should be working toward a swift agreement on transition, so firms can plan ahead and adapt with confidence.”

On European agencies, he added:
“Labour are right to maintain a pragmatic position on the UK’s future cooperation with specific EU and Europe-wide agencies and programmes. Many UK businesses believe that engagement and collaboration with some EU agencies will be vital to their competitiveness in future.”

On the status of EU nationals in the UK, Marshall added:
“Businesses across the UK have been categorical in demanding assurances on the future status of their European employees, co-workers and friends. Regardless of the outcome of negotiations, the rights of EU nationals working in UK businesses must be assured – for the good of families, communities and our economy.”

20th February 2018

BCC comments on David Davis speech

Commenting on David Davis’ speech in Vienna, Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“The Government's commitment to maintaining high standards following the UK's departure from the EU is an important step on the road toward greater clarity for business.
“To deliver an environment where high standards underpin strong trade links, the UK must retain its leading role in both global and pan-European standard-setting. Standards are set by industry, for industry, and businesses expect the UK Government to take decisions that help secure our already-strong position.”

On regulation, Adam Marshall added:

“UK firms would welcome a pragmatic agreement between the UK and the EU that ensures businesses face only one set of regulatory approvals to sell their goods across borders. This is important to ensure business continuity and effective supply chains on both sides of the English Channel, in industries from cars to cables.
“It is incumbent on the UK Government to demonstrate the basis for mutual recognition between the UK and the EU – and it is the EU’s responsibility to be open to such an arrangement as the negotiations progress.”

7th February 2018

BCC open letter to PM: Businesses need clarity on Brexit

As Cabinet ministers gather today (Wednesday) to discuss the government’s negotiating stance ahead of critical talks on the UK’s future relationship with the European Union, Francis Martin, President of the British Chambers of Commerce (BCC) and Adam Marshall, the BCC’s Director General, write an open letter to Prime Minister Theresa May, making an urgent appeal for clarity on the government’s objectives.

In the letter, the BCC’s leaders urge the government to make key choices and deliver a clear statement of intent – so that businesses of all sizes and sectors can make decisions for the future.

The full letter is below:

Dear Prime Minister,

As President and Director General of the British Chambers of Commerce, we write today to make an urgent appeal for clarity on Her Majesty’s Government’s objectives at a critical moment in the UK’s negotiations with the European Union.

In Chamber business communities all across the United Kingdom, there are a range of views on the depth and breadth of the UK’s future relationship with the EU.

As a consequence, the BCC has refrained from entering into the noisy political debate on the shape of the final settlement in recent weeks. We have instead emphasised the need for answers to the many practical questions businesses now face. Our aim has always been to maximise, not constrain, the government’s chances of success as ministers and the civil service work to secure the best possible deal for the UK.

Yet businesses need those elected to govern our country to make choices — and to deliver a clear, unequivocal statement of intent.

The perception amongst businesses on the ground, large and small alike, is one of continued division. Even amongst the many optimistic, future-oriented firms — those who see opportunity in change — patience is wearing thin. Directly-affected companies are poised to activate contingency plans. Many others, worryingly, have simply disengaged.

Clear UK negotiating objectives are crucial to both business and public confidence.

While the BCC has campaigned strongly in favour of a status-quo transition period, to give businesses time to plan for change, this transition must lead to a clear endpoint. There is no room for continued ambiguity as companies make investment and hiring decisions. The government must set out its plans.

26th January 2018

BCC: Transition must deliver clarity and certainty for trade

Commenting on the speech by David Davis on a transition period after we leave the European Union, Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“An overwhelming majority of our businesses, large and small, want a standstill transition agreed by the UK and the EU without further delay.

“UK businesses and their European trading partners expect the negotiators to deliver a clear sense of what the future trading relationship will look like, and a sensible transition that gives them both immediate certainty and adequate time to prepare for future changes to the trade rulebook.

“A key transition priority is to ensure that UK exporters and importers maintain the same terms of trade with those countries currently covered by EU free trade agreements, for the length of the transition. The onus will then be on the UK government to secure the benefits of these agreements for the future.”

On the UK’s ability to negotiate new trade deals during a transition period, Marshall added:

“While our businesses want the UK government to explore new and upgraded trading relationships around the world, their most important priority is to secure the significant levels of market access British businesses may lose, rather than the unproven potential of new agreements elsewhere. In the immediate future, effort must not be deflected from guaranteeing the benefits of existing trade deals for a symbolic and rushed ‘quick win’ elsewhere.”

 

28th December 2017

BCC: Securing a business-friendly trade deal with EU must be New Year priority

A future UK-EU trade deal must minimise barriers to trade says the British Chambers of Commerce, as it releases the results of its survey, in partnership with DHL, which finds UK businesses regard Europe as their primary trading partner for the coming years.

The results, based on the responses of over 1,300 businesses, found that over the next three years, the top two markets which most businesses plan to start or continue exporting to are Western Europe (44%), and Central and Eastern Europe (32%). Western Europe (36%) is also the market which most firms plan to import from.

According to the findings, UK businesses foresee the most significant barriers to trading with foreign markets as tariffs (46%), customs procedures (39%) and local regulations (20%). The results also show exporters’ strategies over the next three years will primarily be influenced by increased demand from overseas buyers (48%), exchange rates (36%) and the UK’s future withdrawal from the EU (35%).

Businesses looking to import say they will primarily be influenced by the lack of suppliers in the UK (43%), followed by exchange rates (41%), and it being cheaper to import than source in the UK or produce within their business (33%).

The results of the survey underline the importance of the UK and EU reaching a business-friendly trade agreement that minimises costs and trade barriers. Europe will not only remain an important market for UK businesses to sell to, but with minimal evidence that UK businesses can substitute domestic inputs for imports in the short term, access to the European market will be crucial for firms to source components.

Dr Adam Marshall, Director General of the British Chambers of Commerce, (BCC) said:

“Europe is the UK’s largest trading partner, so it will come as no surprise that businesses regard access to European markets and products as fundamental to their medium-term trading strategies. Now that negotiations on the future UK-EU relationship are set to begin, businesses need clarity on the practicalities of the future trading relationship between the UK and EU without delay.

“High tariffs, cumbersome customs procedures, as well as conflicting regulatory requirements can deter firms from trading overseas – so a future agreement between the UK and the EU must minimise barriers and costs, to allow firms on both sides of the Channel to continue trading as freely as possible.

“The devaluation in sterling seen over the past 18 months has been a double-edged sword, providing a welcome boost for some exporters, but a drag on many other firms, who report higher costs for their inputs and components. While UK firms would like to be able to source inputs on the domestic market, our evidence suggests that swapping imports for domestic supplies isn’t presently an option for many. If businesses can’t find or afford to source their supplies domestically, easy and quick access to foreign markets is crucial. Both the UK government and EU Commission must work together in the new year to move towards a frictionless trade deal that works for both British and European businesses.”

11th December 2017

BCC and six national Chambers across Europe urge politicians: move talks to transition and trade now

  • Unprecedented joint statement from national Chamber organisations bordering the North Sea
  • Leading business organisations representing businesses in seven countries that account for 70% of EU-UK trade

The British Chambers of Commerce (BCC) has today joined with national Chamber organisations from six countries bordering the North Sea, on the United Kingdom and the European Union to swiftly move to talks on transition and the future EU-UK trade relationship now that sufficient progress in the first phase of the Brexit negotiations has been made.

This landmark joint statement, from Chambers of Commerce representing businesses in seven countries that accounts for 70% of EU-UK trade in both directions, calls on both sides to provide clarity on what the future relationship will look like as soon as possible, and to strive for a trade-friendly agreement with a realistic transition period.

The statement reads:

The British Chambers of Commerce, Chambers Ireland, the Danish Chamber of Commerce, the French Chamber of Commerce and Industry, The German Chambers of Commerce and Industry, the Netherlands-British Chamber of Commerce and the Federation of Belgian Chambers of Commerce represented by Voka- Flanders Chamber of Commerce and BECI -Brussels Chamber of Commerce, call on the United Kingdom and the European Union to keep on striving for sufficient progress in the first phase of the Brexit negotiations to ensure talks on transition and the future EU-UK trade relationship can start as soon as possible.

• This is a joint statement by Chambers of Commerce of seven countries, altogether accounting for 70% of EU-UK trade in both directions
• We need clarity on what the future relationship will look like as soon as possible and call on negotiators to strive for a trade-friendly agreement
• A realistic transition period, maintaining the status quo until the new agreement is implemented, is highly desirable
• No deal is extremely undesirable for all sides

Countries from the northern European coastal area have always maintained exceptionally good trade ties. Trade between the United Kingdom and the other 6 EU countries in this area amounted to 344bn EUR in 2016, accounting for 70% of the total EU-UK trade. The English Channel, located in the middle of the North Sea area, is the world's busiest shipping lane, with more than 500 vessels passing through the strait on a daily basis, as well as being a key transport link between the EU and Ireland.

Many companies are embedded in supply chains spread over several northern European countries that depend highly on tight ‘just in time’ management cycles, which can be severely disrupted by even the slightest unforeseen regulatory changes. All these companies that engage both directly and indirectly in EU-UK trade and EU-EU via the UK trade, most notably in the case of Ireland, need to start taking the necessary actions to prepare for new EU-UK trading arrangements as soon as possible.

However, most of the big issues that are of concern for our businesses have not yet even been touched on by the EU and UK negotiators. Issues like future customs procedures, the extent of regulatory alignment between the UK and the EU and the mutual recognition of standards- and safety checking agencies are just a few critical areas in which companies need clarity.

We therefore call on EU and UK negotiators to create clarity on the outlines of a future trade friendly EU-UK relationship in the following months. As it is in the interest of the EU and the UK to have a united and open Europe, the new relationship should fully respect all aspects of the integrity of the Single Market.

Given the monumental changes Brexit will bring, a realistic transition period is needed to provide time for companies to adapt to the new EU-UK trading relationship. A status-quo like transition period - announced with sufficient notice - ensuring the UK remains in the customs union and the Single Market for the duration of the transition period, with all the appropriate rights and obligations, would be best to provide business with the highest possible degree of certainty and predictability.

We are increasingly concerned about continued rhetoric on a no-deal scenario. A ‘no deal’ scenario would be extremely undesirable for business as this would mean they will be faced with higher tariffs, more burdensome customs procedures and longer delays than under a negotiated separation.

We therefore urge both the British negotiator David Davis and the EU chief negotiator Michel Barnier to start discussing the outlines of a future EU-UK trade friendly relationship as soon as possible now that sufficient progress has been made in the first phase of the Brexit negotiations.

Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“Last week’s breakthrough in the negotiations was a welcome relief for business communities. Trade thrives between the UK and Europe, and all sides benefit from reaching a business-friendly deal.

“It’s clear that companies in the UK and in Europe all want talks to move forward to the future trade relationship without delay. There is a real clamour for the negotiations to start on the practical issues that will affect firms, from regulation and customs, to tariffs and taxes.

“Businesses trading between UK and Europe have done their best to focus on the potential impact of Brexit on their operations, rather than on the day-to-day political noise. However, businesses both in the UK and around the world want clarity on the key political issues, and it is up to the negotiators to provide that clarity.”

11th December

BCC forecast: Uncertainty constraining UK economic growth

The British Chambers of Commerce (BCC) has today (Monday) slightly downgraded its three-year outlook for the UK economy, cutting growth expectations from 1.6% to 1.5% in 2017, from 1.2% to 1.1% in 2018, and from 1.4% to 1.3% in 2019.

The slight downgrade to the leading business group’s forecast is mainly driven by a slightly weaker contribution from net trade across the forecast period, while household consumption and business investment are expected to remain sluggish through the forecast period. UK productivity is also forecast to remain subdued.

Inflation is expected to remain elevated in the short-term, peaking at 3% in the final quarter of this year, and then moderate slightly as the impact of the post-EU referendum slide in sterling fades. However, inflation is forecast to outpace earnings until 2019, eroding real wages and weighing on consumer spending, a key driver of UK economic growth. As such, our new forecast is that the next increase in UK official interest rates, to 0.75%, will occur in Q4 2019.

The BCC expects UK public sector net borrowing to be £12.4 billion higher over the next three years than predicted by the Office for Budget Responsibility at the 2017 Autumn Budget, with slower growth expectations likely to reduce the Exchequer’s ability to generate tax revenue.

With the UK economy expected to continue on a path of slow and sluggish growth, the business group is urging a far stronger focus on ‘fixing the fundamentals’ of the UK economy over the coming year – as skills and labour shortages, congested infrastructure, patchy digital connectivity, a slow planning system and high up-front costs stymie investment and stunt productivity improvements. At the same time, to lift the cloud of uncertainty over business communities, the UK government must do all it can to move negotiations with the EU forward, secure a transition deal and answer business’s practical questions around trade.

Key points in the forecast:

  • UK GDP growth forecast for 2017 is downgraded from 1.6% to 1.5%, and is expected to slow to 1.1% in 2018 (downgraded from 1.2%), before rising to 1.3% in 2019 (downgraded from 1.4%). Quarter-on-quarter growth in Q4 2017 is forecast to slow slightly to 0.3%. 
  • Export growth is expected to grow at 4.3% in 2017, 3.1% in 2018 and 2.9% in 2019 as global growth drives international demand, while import growth is expected to grow by 3.7% in 2017 2.7% in 2018, and 2.9% in 2019. This leaves our net trade position weaker across the forecast period than we previously forecast in Q3.
  • Productivity is expected to grow by 0.5% in 2017, 0.6% in 2018 and 0.5% in 2019
  • Inflation of 2.7% is forecast for this year, and 2.8% and 2.5% in 2018 and 2019 respectively. Inflation is expected to peak at 3% in the final quarter of 2017, in line with our previous forecast 
  • Our new forecast is that the next increase in UK official interest rates, to 0.75%, will occur in Q4 2019
  • Growth in consumer spending is expected to slow from 1.6% in 2017 to 1.0% in 2018, before rising to 1.3% in 2019
  • Business investment growth has been upgraded from 0.4% to 2.1% for 2017 as a result of revisions to ONS data, but is expected to slow to 0.8% in both 2018 and 2019
  • Looking at sectors, manufacturing growth has been upgraded from 1.4% to 2% in 2017, and is expected to grow at 0.9% and 1.1% in 2018 and 2019. Construction growth has been revised upwards for 2017 from 1.3% to 3.2%, and is expected to grow at 0.5% and 1.0% thereafter. Services sector growth has been downgraded from 1.8% to 1.7% in 2017, and is forecast to grow at 1.3% and 1.6% in the following years
  • Public sector net borrowing is expected to total £52.7 billion in 2017, £47.8 billion in 2018 and £36 billion in 2019.

Dr Adam Marshall, Director General of the British Chambers of Commerce, said:

“Despite pockets of resilience and success, and strong results for some UK firms, the bigger picture is one of slow economic growth amid uncertain trading conditions.
“Clarity on the nature of the UK’s future trading relationship with the EU is needed to ease the cloud of uncertainty that lingers over business communities, and which is undermining many firms’ investment decisions and confidence. Certainty over the course of Brexit would also help to stabilise markets, and reduce the volatility of sterling, which businesses say is increasing their costs.

“Yet even the best possible Brexit deal won’t be worth the paper it’s written on if the government fails to address the many long-standing, and well-known, barriers to growth here at home. Ever-rising upfront costs, a labour market at capacity, growing pressure on land use, and a physical and digital infrastructure in need of investment and expansion, all prevent UK firms from reaching their potential. While the recent Budget made some welcome steps in the right direction, concerted and sustained action to fix the fundamentals is needed to encourage business investment and growth.”

Suren Thiru, Head of Economics at the BCC, said:

“The downgrades to our growth forecast confirm that the UK economy is in a challenging period with growth likely to remain well below average for a prolonged period.

“Continued uncertainty over Brexit and the burden of upfront cost pressures facing businesses is likely to stifle business investment, while falling real wage growth is expected to continue to weigh on consumer spending. Furthermore, with businesses continue to report that the post-EU referendum weakness in sterling is hurting as much as its helping, the significant imbalances currently facing the UK economy is expected to persist through the forecast period.

“The continued weakness in UK’s productivity is a key concern and reflects the lack of progress in dealing with some of the deep-rooted structural problems in our economy, from skills shortages to creaking physical and digital infrastructure.

“Despite the downgrades to our growth projections, the risks to our forecast remain on the downside. Should the UK face a disorderly exit from the European Union, the UK’s growth rates may be materially lower over the medium term.”

8th December 2017

BCC: Business cheers negotiations breakthrough in Brussels – and urges swift start to trade talks

Commenting on the news that the UK government and the European Commission have reached a deal to conclude the first phase of the Brexit negotiations, Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“Businesses will be breathing a sigh of relief that ‘sufficient progress’ has been achieved. After the noise and political brinksmanship of recent days, news of a breakthrough in the negotiations will be warmly welcomed by companies across the UK.

“Business will particularly cheer the mutual commitment to a transition period to support business confidence and trade, and will want the details confirmed swiftly in the new year when negotiators move on to the big questions around our future trade relationship with the EU.

“For business, a swift start to trade talks is crucial to upcoming investment and growth decisions. Companies all across the UK want absolute clarity on the long-term deal being sought, and want government to work closely with business experts to ensure that the details are right.

“Businesses want answers on what leaving the EU will mean for regulation, customs, hiring, standards, tariffs and taxes. The job of the UK government and the European Commission now is to provide those answers – and do everything in their power to ensure vibrant cross-border trade between the UK and EU countries can continue.”

On the question of citizens’ rights, and the status of EU employees in UK firms, Dr Marshall added:

“The biggest priority for many firms since the EU referendum has been to get clarity and security for their European employees, whose contribution to business success across the UK is hugely valued. We are delighted that they, as well as UK citizens living and working in the EU, now have more clarity and can plan their future with greater confidence.”

7th December 2017

BCC: Currency volatility compounding cost pressures for many businesses

The British Chambers of Commerce (BCC) today (Thursday) releases the results of its survey, in partnership with American Express, which finds the majority of businesses expect the fall in sterling to increase their costs.

The survey of over 1,300 businesses found that 63% of businesses expect their costs to increase in the next 12 months as a result of the devaluation in sterling, including a quarter (24%) who expect costs to rise significantly. In comparison, only 6% of firms expect their costs to decrease.

Over 70% of manufacturers (73%) and business-to-consumer firms (71%) anticipate costs increases, compared to 55% of business-to-business firms, according to the results.

The survey also found that many businesses trading abroad are leaving themselves exposed to currency fluctuations, with nearly half (46%) of UK firms not taking proactive steps to manage currency risk. Smaller firms are less likely than their larger counterparts to be managing risk (44% of firms with 1-9 employees, compared to 70% of those with 50-249). Manufacturers have the highest proportion of businesses managing currency risk (76%), compared to B2C (57%) and B2B (39%).

The findings of the survey highlight the extent to which the depreciation in sterling is expected to compound the price pressures on firms, underlining the need to ease the domestic cost of doing business. There is also a clear need for more support and information for exporting businesses on the importance of managing currency risk.

Other key findings in the survey are:

  • The most common forms of managing currency risk are invoicing in sterling (27%), opening foreign currency accounts (15%), and waiting for an advantageous rate and buying using the spot market (15%) 
  • Less than a quarter (24%) of businesses say they have a complete understanding of the types of international payment methods available, with 23% saying somewhat and 13% none at all
  • The biggest challenges businesses face in making or receiving international payments are delays (21%), bad or misleading exchange rates (16%) and hidden fees (16%)

Dr Adam Marshall, Director General at the British Chambers of Commerce (BCC), said:

“Weak sterling reflects the current climate of political uncertainty and lack of clarity on the Brexit process. A clear and firm strategy from government about the nature of the UK’s future trading relationship with the EU would go a long way to reassure and stabilise markets.
“While businesses await answers on Brexit, and a return to a stronger currency, they must take the necessary steps to prepare for potential risks. It’s concerning to see the proportion of UK companies not actively managing currency risk. For those trading internationally, it makes good business sense to explore the options available to insure against currency fluctuations.
“Companies are clearly feeling price pressure from the depreciation in sterling. The government made a crucial first step in the Budget with action on business rates, but further steps need to be taken on the upfront cost of doing business, so that firms can mitigate currency pressures and grow their business.”

Karen Penney, Vice President & General Manager, Global Commercial Payments and Small Business Services UK, said:

“Whilst managing currency fluctuations can seem daunting, technology is rapidly lowering these barriers, helping to streamline the payment process and granting added layers of security to businesses. At American Express we know that simple currency tools such as forward contracts can effectively protect a business from exchange rate volatility by guaranteeing a fixed rate. Not only will this protect margins, it will enable more accurate forecasting and budgeting. With the right tools and resources, businesses can unlock growth opportunities both at home and abroad.”

30th November 2017

BCC/DHL: British exporters keep calm and carry on

The British Chambers of Commerce, in partnership with DHL, today (Thursday) publishes its latest Quarterly International Trade Outlook, based on survey and documentation data from UK exporters.

The Outlook shows considerable price pressures amongst exporting businesses – but exporters are absorbing the impact for the moment thanks to stronger sales and orders.

The BCC/DHL Trade Confidence Index, which measures the volume of trade documentation issued by accredited Chambers of Commerce for goods shipments, rose by 2.25% on the quarter, and stands at the third highest level on record.

The survey, based on the responses of over 3,300 exporters, shows that in the manufacturing sector, exporters are enjoying strong sales and orders in foreign markets, and are also reporting improvements in domestic sales and orders.

The results of the survey indicate the price pressure from the cost of raw materials is high across the board for exporters (86% in manufacturing, 42% in services). 68% of exporting manufacturers consider exchange rates as a concern to their business.

Exporters are also more likely to have tried recruiting in the last three months. However, firms across the UK economy are struggling to find the right skills, with 70% of manufacturers and 57% of services firms reporting recruitment difficulties.

The findings suggest that the fall in sterling is increasing price pressure for businesses across the economy, but particularly in manufacturing. However, many of those businesses that export have been able to offset the fall in sterling thanks to timely improvements in sales and orders, both overseas and at home.

Key findings from the report:

  • The BCC/DHL Trade Confidence Index, a measure of the volume of trade documentation issued nationally, rose by 2.25% on the quarter. The Index now stands at 126.51 – up 4% on Q3 2016 – and stands at the third highest level since records began in 2004
  • 44% of exporting manufacturers and 30% of exporting service firms reported increased export sales in Q3. 41% of exporting manufacturers and 26% of exporting service firms reported increased export orders
  • 41% of exporting manufacturers reported that domestic sales had increased, and 38% domestic orders increased in Q3 2017
  • 39% of exporting manufacturers expect their prices to rise. Of these firms, 86% cited raw materials as a cost pressure
  • 68% of exporting manufacturers cite exchange rates as a concern to their business, and 49% in the services sector
  • 33% of exporting manufacturers and 31% of exporting services firms view inflation as a concern to their business

Commenting on the findings, Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“While it’s encouraging to see many exporters reporting improved performance on the back of rising demand in key markets, including the Eurozone, price pressures remain a real cloud on the horizon for UK firms.

“The depreciation of sterling has undoubtedly benefited some firms, but has ratcheted costs up significantly for others. Taken together with higher domestic costs facing businesses, a tipping point may soon be reached for some firms – with consequences for investment, recruitment and trade.

“Many exporters are also being hampered by issues in the domestic business environment, most notably the widening gap between business skills needs and the pool of available labour. Trading businesses in some areas now say that there is a generalised labour shortage in their area, which could put a brake on their overseas activity if it is not addressed. This is a sobering reminder that the focus needs to be on the fundamentals here at home, as well as the high politics of Brexit and global trade policy.”

Ian Wilson, CEO DHL Express UK and Ireland, said:
“Now is an interesting time to be part of the UK’s export industry. Whilst it remains shrouded in uncertainty about what Brexit will look like and the implications for UK businesses large and small, those businesses are demonstrating a defiantly positive export performance.

“The world is now more connected than it ever has been, and this report shows that UK businesses are embracing this connectivity, despite the lack of clarity about what lies ahead. We must ensure that businesses remain able to meet international demand and, in doing so, keep the UK at the forefront of buyers’ minds when shopping cross border.”

22nd November 2017

UAE VAT UPDATE: NOVEMBER 2017

The British Centres for Business in UAE has drawn our attention to a key change to VAT that will be introduced into the United Arab Emirates on 1st January 2018. All GCC countries have agreed that it will be mandatory for companies with revenue of over approximately US$100,000 to be VAT registered with the Federal Tax Authority. It will be voluntary for companies with a turnover of more than US$50,000, but with thresholds so low, the majority of companies in the UAE will pay VAT.

With the go-live date of VAT in the region just 2 months away those exporting to GCC countries using the DDP Incoterm should be aware of the 5% charge being introduced. The Charge of VAT on imports will work in a similar way as it does in the EU at present with the VAT being paid before goods can be released. Where appropriate the importer will be able to reclaim the VAT paid.

For further information please visit https://bcbuae.com/post_news/uae-vat-update-november-2017/

21st November 2017

BCC: Government must provide clarity on future of UK’s VAT regime

Commenting on the publication of the Taxation (Cross-border Trade) Bill, Anastassia Beliakova, Head of Trade Policy at the British Chambers of Commerce (BCC), said:

“Businesses will expect this Bill to provide continuity and alignment with the Union Customs Code, and help establish future customs cooperation with the EU. But it is also imperative that the government consults with business on how to improve our customs procedures as we leave the European Union.

“Firms tell us that they want clarity on the future of the UK’s VAT regime, and what our exit from the EU will mean for cross-border liabilities. HMRC must be given more resources, and adopt a clear focus on customer service, to enable them to support exporters and importers as they navigate the UK's exit from the EU.”

14th November 2017

Egypt Ministry of Supply Decree 217/2017

Egypt's Minister of Supply has issued a decree obliging all food companies to print a price label on all their products in clear.

Here are the highlights, in brief:

  • The decision, which was published in the state’s official gazette on Tuesday 24th of October 2017, includes companies that produce food products locally as well as those that package imported products.
  • The decree also prohibits dealing with un-priced products anywhere down the line; whether in retail, packing or distribution.
  • The supply ministry has given a deadline of 31 December for dealers to sell any unlabelled products, which should also have set prices prior to the end of the deadline.
  • The decree also imposes penalties on those who violate the law with one to five years in prison and a fine between EGP 300 and EGP 1,000, in accordance with Article 9 of the compulsory pricing and profit regulation law.

Updates or amendments of the decree may come out soon so we will keep this page updated as and when they are received.

10th November 2017

BCC: UK’s weak trade position shows no signs of improving

Commenting on the trade statistics for September, released today by the ONS, Mike Spicer, Director of Research Economics at the British Chambers of Commerce (BCC), said:

“The deterioration in the UK’s net trade position in September was disappointing, and reinforces the overall weakness of our trade balance and external position. The widening was primarily driven by a sharp rise in imports, particularly in machinery and fuels.
“While the fall in sterling is helping some exporters abroad, it’s also hurting those that import by increasing the cost of raw materials and capital equipment. The trade figures from this quarter, and throughout the year, prove that we are a long way from the rebalancing of our economy.

“The increase in exports to EU countries underlines the importance of agreeing a deal that safeguards favourable terms of trade for UK businesses with their largest overseas market. Firms need clarity on the nature of the UK’s future trading relationship with Europe, so they can plan with confidence, which means Brexit negotiations must progress on to trade talks as soon as possible. The decrease in exports to non-EU countries shows how important it will be in the coming years to support trade with these markets too.

“To boost our overall trade performance, more must also be done in the upcoming Autumn Budget to support UK companies to begin or expand their export journeys.”

10th October 2017

BCC comments on UK trade statistics

Commenting on the trade statistics for September 2017, released today by the ONS, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:

“The widening of the UK’s trade deficit in August is disappointing, and signifies a much weaker trading position than the average for the year, with exports falling and imports rising sharply in the month. Taken together with the recent widening of the current account deficit, the figures paint a rather gloomy picture of the UK’s external position.

“The latest trade data is further evidence that the decline in sterling’s value over the past year is doing little to boost the UK’s overall trade position. Businesses continue to report that the post-EU referendum weakness in sterling is hurting as much as its helping, with firms continuing to face higher input costs due to the weakening currency, particularly those locked into global supply chains. For those companies that rely on overseas suppliers for their production equipment, a weak pound also makes investment in growth less viable.

“Businesses want to see comprehensive trade talks begin in the EU negotiations before the end of the year, and need answers to the practical questions about our trading relationship with Europe beyond March 2019. At the same time, it is vital that more is done help firms take advantage of new trading opportunities, including greater practical assistance for exporters and tackling some of the longstanding issues at home including the chronic skill shortages and the cost of doing business in the UK.”

22nd September 2017

BCC comments on Prime Minister’s Florence speech

Commenting on the Prime Minister’s Brexit speech in Florence, Dr Adam Marshall, Director General at the British Chambers of Commerce (BCC), said:

"In the world of business, the PM's Florence speech will be judged not on its rhetoric or delivery, but on whether it begins to break the stalemate that has left companies across the UK, Europe and around the world counting the cost of uncertainty.

"The Prime Minister's constructive tone and clearer offers, particularly on guarantees on EU citizens’ rights and UK contributions to the EU budget, represent an important and welcome effort to break the impasse of recent months, which has preoccupied many in the world of business.

"The absolute priorities for business are to get trade talks moving, and to ensure a comprehensive transition period is in place that gives the certainty that companies need to take immediate investment and hiring decisions. It is our hope that the Prime Minister's offer will jump-start the process, and that the two sides can agree to move on to the critical issues of transition and trade as quickly as possible - and in all cases before the end of 2017.

"Given the complexity of the changes ahead, a significant majority of businesses want a transition that is longer than the two years being proposed by the Prime Minister. We will challenge both the UK government and the European Commission over the coming months to agree a transition that lasts at least three years from the date of our formal exit from the EU, giving businesses enough time to prepare for a final deal.”

7th September 2017

BCC forecast: Fall in sterling failing to lift UK growth

The British Chambers of Commerce (BCC) has today (Friday) slightly downgraded its medium-term outlook for the UK economy over the next few years. While the BCC has slightly upgraded its UK growth forecast for 2017 from 1.5% to 1.6%, its growth expectations for 2018 and 2019 have been cut from 1.3% to 1.2%, and 1.5% to 1.4% respectively.

The leading business group has slightly upgraded its forecast for 2017, driven by a moderately stronger outlook for consumer spending growth in 2017. While inflation remains elevated, it is expected to peak at 3% by the final quarter of 2017. However, inflation is still forecast to outpace average earnings until 2019, eroding real wages and weighing on consumer spending, a key driver of economic growth, in future years.

A weaker contribution from net trade and more subdued consumer spending growth were the main reasons for the slight downgrade to the BCC’s growth forecast for 2018. While the outlook for export growth remains unchanged, the rate of import growth is expected to increase, with little evidence that customers are switching from imported goods despite their rising cost. Falling real wages, and a slight weakening in labour market conditions, will see consumers rein in their spending in 2018. The slight downgrade for growth in 2019 reflects a lower contribution from net trade and weaker investment compared to our Q2 forecast.

The UK economy is expected to remain on a slow-growth trajectory for the forecast period, which reinforces the need for decisive action to boost the domestic business environment. The government must use the Autumn Budget to alleviate the burden of upfront costs facing companies, incentivise investment, and improve infrastructure.

Key points in the forecast:

  • UK GDP growth forecast for 2017 is upgraded to 1.6% from 1.5%, and is expected to slow to 1.2% in 2018 (downgraded from 1.3%), before rising to 1.4% in 2019 (downgraded from 1.5%)
  • Inflation of 2.7% is forecast for this year, and 2.9% and 2.5% in 2018 and 2019 respectively. The previous forecasts were for 2.9%, 2.8% and 2.5% respectively. Inflation is expected to peak at 3% in the last quarter of 2017, lower than our previous forecast of 3.4%, due to the slowing growth in input costs
  • Export growth of 3.1% is forecast this year, and is expected to slow to 2.9% in 2018 and 2.8% in 2019. This is unchanged from our previous forecast
  • Import growth forecasts have been upgraded to 2.9% in 2017, 1.5% in 2018 and 2.0% in 2019, from 2.5%, 1.3% and 1.8% respectively. 
  • Consumer spending growth has been upgraded for 2017 from 1.3% to 1.5% but is expected to slow to 0.8% and 1.3% in 2018 and 2019
  • Business investment growth has been revised slightly upward for 2017 and 2018, to 0.4% and 0.8% respectively, but has been downgraded for 2019 from 1.2% to 0.9%, with some firms expected to bring some investment decisions forward
  • Our new forecast is that the first increase in UK official interest rates, to 0.5%, will occur in Q3 2018. This is two quarters later than predicted in our Q2 forecast
  • Looking at sectors, manufacturing has been upgraded from 1.2% to 1.4% in 2017 and is expected to grow at 0.7% and 1.1% in 2018 and 2019. Construction has been revised upwards for 2017, from 1.1% to 1.3% and is expected to grow at 0.7% and 1.0% thereafter. The services sector has been upgraded from 1.7% to 1.8% in 2017, and is forecasts to grow at 1.2% and 1.6% in the following years

Dr Adam Marshall, Director General of the British Chambers of Commerce, said:

“While some businesses report strong trading conditions, the UK economy as a whole is treading water, and there is no sign on the horizon of a return to healthier levels of growth.

“Our forecast suggests that the hoped-for rebalancing of the UK economy towards investment and export is unlikely to materialize in the medium term. The rising upfront cost of doing business in the UK, the uncertainty around Brexit, and the constraints created by skills gaps and shoddy infrastructure collectively outweigh any benefit arising from the recent depreciation of sterling. A cheaper currency does not automatically mean an export boom, no matter how some politicians and commentators will it to happen.

“Business communities across the UK need to see action to boost confidence on two fronts: Brexit and the business environment here at home. A comprehensive Brexit transition deal, and a swift shift to focus on the future UK-EU trade relationship, are needed this autumn. The UK also needs an Autumn Budget that pulls out the stops to support business growth, at a time of significant uncertainty and change.”

Suren Thiru, Head of Economics at the BCC, said:

“The changes to our growth forecast suggest that the UK economy is likely to remain on a low-growth trajectory, and will be marginally smaller at the end of the forecast period than we predicted in the second quarter.

“It is increasingly clear that the post-EU referendum slide in the value of sterling has done more harm than good. Inflation is being driven by the sizable increases in the cost of imported raw materials over the past year, and is expected to remain a drag on consumer spending over the near term, with pay growth not expected to outpace price growth until 2019.

“The contribution of net trade to UK GDP growth is not expected to be as strong as we previously predicted, as we see little evidence that the depreciation of the pound is materially boosting the UK’s external position. While the outlook for UK exporters is for modest growth, imports are expected to grow at a faster rate than we previously forecast, with little evidence that consumers or firms are switching away from imports towards domestic alternatives despite their rising cost.

“Although there remains considerable uncertainty over UK’s growth prospects, the risks to our current outlook are to the downside. On Brexit, our forecast implicitly assumes a relatively smooth exit from the EU. A more sudden departure would be likely to trigger a far more marked weakening in economic conditions.”

29th August 2017

BCC: Trade mission opportunity to strengthen ties with Japan

Commenting as part of the Prime Minister’s trade delegation to Japan, Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“The links between British and Japanese businesses are deep and strong, and this mission is an important signal of the shared desire to see trade between our two countries grow further in the years to come.

“Japanese firms have been huge investors in the UK over the years, and their long-term commitment in towns and cities across the country is valued and celebrated. Many have put down roots, boosted local employment, forged links with local firms, and built deep UK supply chains. Our business communities have been enriched by their presence and their engagement.

“Increasing numbers of UK companies are also doing business in Japan, selling both their products and their know-how to Japanese clients.

“Boosting two-way trade between the UK and Japan is a major opportunity. Chambers of Commerce across the UK are pleased to be part of the effort to make that happen."

28th August 2017

BCC and DIHK: Joint UK-German call to put shared economic interests first in Brexit negotiations

The British Chambers of Commerce (BCC), and the Association of German Chambers of Commerce (DIHK) have today (Monday) called for UK and EU negotiators to put a clear focus on our shared economic interests as Brexit talks reconvene in Brussels.

The leading German and UK business organisations are challenging political leaders to build an atmosphere of mutual trust and constructive dialogue, to deliver clarity and certainty for trading businesses across Europe.

With the third round of Brexit negotiations underway, a number of business-critical areas that form part of the withdrawal agreement are yet to be resolved, including the rights of EU workers in the UK and UK workers in the EU27. Additionally, there are hundreds of practical and technical issues, including customs arrangements and tax procedures, that need to be negotiated as part of the future EU-UK relationship during later stages of the negotiations. Businesses in both the UK and Germany want to see talks move on to these fundamental issues – and particularly customs concerns – as soon as possible.

There is great uncertainty in the business community all across Europe. A DIHK survey has found out that the business outlook of companies that are engaged in trade with the United Kingdom is worsening, due to the expectation of cost burdens from limits on free movement of workers, taxes, tariffs and increasing bureaucratic hurdles at Europe's new borders negatively affecting business on both sides.

Meanwhile, respondents to a recent British Chambers of Commerce survey have expressed their preference for a substantial transition period, with 68% saying they seek a transition period of at least three years. Both German and British businesses also want clarity at the start on the overall shape of the final destination settlement.

The United Kingdom is the third-largest market for German goods exports; in turn, Germany is the UK’s second-largest goods and services exports destination. German companies maintain about 2,500 branch offices in the UK, which employ nearly 400,000 workers. British companies have 1,200 branch offices in Germany, which employ about 220,000 workers.

Dr Adam Marshall, Director General of the British Chambers of Commerce, said:

“As Brexit talks continue, it’s clear that companies in the UK and on the Continent all want economic issues to rise to the top of the negotiations agenda. There is real business appetite from both sides for a focus on practical, day-to-day business concerns, and a desire for clarity on future trading arrangements.

“The UK and the EU must begin work on transitional arrangements, particularly on customs, so that firms on both sides of the Channel have the confidence to make investment decisions.

“Chambers of Commerce in the UK and in Germany want to see thriving trade continue between our firms, both now and into the future. Politicians must do everything in their power to help this happen.”

Dr Martin Wansleben, Chief Executive Officer of the Association of German Chambers of Industry and Commerce (DIHK):

“Businesses are very concerned that Brexit will have a major negative impact. Not only it could lead to more trade barriers – additional bureaucracy, increased waiting time and stricter border controls resulting in higher costs. The terms of exit are still completely unclear. Many of our members are reporting that they are already shifting investments away from the UK in anticipation of these barriers.

“The first effects of the Brexit vote are already being observed: German exports to the United Kingdom were down by 3 percent in the first half of this year compared to the first half of last year, whilst exports to the EU increased with 6 percent in the same period.

“A transitional period would be helpful for business, but it is important to businesses on both sides that the contours of a future trading relationship are becoming clearer over the next months.”

21st August 2017

BCC comments on government position paper on continuity in availability of goods

Commenting on the position paper for continuity in the availability of goods for the EU and the UK, Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“Businesses here in the UK as well as on the Continent will welcome the British government's desire to maintain maximum continuity in the way goods are traded when the UK withdraws from the EU.

“UK goods will be fully compliant with EU regulations, product standards and safety checks at the time of the UK’s exit from the EU, and vice versa. Trading companies should not have to get new product approvals, or be subject to duplicate safety checks, for existing products. Related services should also be able to be sold as well.

“As the negotiations continue, both sides should commit to avoid unnecessary compliance checks for businesses, both at the time of the UK's exit from the EU, and in future wherever the UK and the EU agree to maintain close regulatory alignment.

”A 'no deal' scenario, which would see heaps of extra red tape imposed on goods traders on both sides of the Channel, must be avoided - as it's in no one's interests."

17th August 2017

BCC/DHL: Exporters concerned economic conditions will dampen performance

The British Chambers of Commerce (BCC), in partnership with DHL, today (Thursday) publishes its latest Quarterly International Trade Outlook, which shows that while many exporters continue to put in a solid performance, wider economic factors are a cause of concern.

The BCC/DHL Trade Confidence Index, which measures the volume of trade documentation issued by accredited Chambers of Commerce for goods shipments, fell by 2.25% on the quarter – but still stands at the third highest level on record.

The survey, based on the responses of over 3,500 exporting businesses, shows that while export sales remained steady during Q2 2017, there are a number of economic factors that are giving businesses cause for concern.

As the pound continues to fluctuate, the findings of the survey show that 68% of manufacturers who export consider exchange rates as a concern to their business.

Recruitment difficulties are high for exporters in both sectors, with 67% in manufacturing and 51% in services reporting problems finding the right people. Access to skilled manual or technical labour was a particular issue for exporters in the manufacturing sector (69%).

Just over a third of exporters are concerned about inflation (36% in manufacturing and 33% in services). The results also show that 39% of exporting manufacturers expect the price of their products to increase over the next three months. Of these, 81% say this is due to the pressure from the cost of raw materials.

Key findings from the report:

  • The balance of manufacturers reporting improved export sales rose to +27% from +26% in Q1, the highest level since Q4 2014. In services, the balance of firms reporting improved export sales rose to +13% from +10% in Q1, which remains below the historical average of the sector
  • The balance of manufacturers reporting improved export orders fell to +20% from +22% in Q1, while in services it rose to +9% from +5%
  • The balance of exporting manufacturers who expect their prices to rise stands at +39%, and raw materials were the cause of price pressures for 81% 
  • 68% of exporting manufacturers cite exchange rates as a concern to their business, and 49% in the services sector
  • 36% of manufacturers and 33% of services firms view inflation as a concern
  • The BCC/DHL Trade Confidence Index, a measure of the volume of trade documentation issued nationally, fell by 2.25% on the quarter. The Index now stands at 123.72 – down 2.54% on Q2 2016 – but stands at the third highest level since records began in 2004

Commenting on the findings, Dr Adam Marshall, BCC Director General, said:
“Exporters continue to put in a solid performance but are keeping a watchful eye on volatile exchange rates, rising inflation, and ongoing skills shortages.

“Many manufacturers are capitalising on the advantages the fall in sterling has brought to overseas sellers since the EU referendum. That said, exporters also tend to import raw materials and product components, and are concerned that the sustained depreciation of the pound may erode their margins.

“The recruitment difficulties facing firms reaffirms the need for action on the domestic agenda. Tackling skills shortages, and ensuring the UK’s future immigration system is responsive to economic need, will help boost the growth potential of our all-important exporting businesses. At the same time, a real push to provide firms with practical exporting advice and on-the-ground support, will put the UK in a better position to take advantage of post-Brexit trading opportunities.”

Ian Wilson, CEO DHL Express UK and Ireland, said:
“Whilst UK businesses continue to deliver a strong export performance, they are increasingly concerned about what lies on the economic horizon.

“68% of manufacturers report exchange rates as a concern, and over a third of exporters are concerned about inflation and rising costs of raw materials. Access to the right talent is also an issue and, combined, these concerns serve as a stark reminder that more needs to be done to secure the future of UK exporters.
“As we begin negotiations for our departure from the EU, the UK government must ensure that the concerns of businesses are acknowledged and that the necessary infrastructure is put in place to ensure Britain continues to be truly global - maintaining and further developing our country’s international trading links.”

14th August 2017

The British Chamber of Commerce Qatar posted the following statement on its website addressing the current situation in Qatar:

The latest market sentiment in Qatar suggests that rather than a negative downturn in business, the effect of the continuing GCC embargo could well herald the beginning of a new boom period for business in Qatar. The Qatar government is expected to announce shortly an injection of funding for a massive new investment programme along with several new flagship projects to boost Qatar’s economy over the short to medium term.

The government has determined that this economic investment is now imperative to ensure future self-sustainability and to pivot away from its previous reliance on its GCC neighbours. The local market has strongly endorsed and welcomed this move and echoed the prevailing sentiment that Qatar should forge a new economic path forward, in keeping with its 2030 vision.

Alongside such sentiment, we hear repeatedly from senior Qatar business sources that they will not forget their friends for showing solidarity with Qatar during this dispute. This presents UK companies with a golden opportunity to grow and strengthen business in Qatar. The next few months may well prove to be a critical window for British companies to explore the Qatar market. UK businesses new to Qatar should consider taking early steps to establish their brand and presence in the market to ensure they are well placed to benefit from the new stimulus being made by the Qatar government. UK businesses who are active and/or represented elsewhere in the GCC region should similarly contact the British Chamber for advice on how to protect existing business links with Qatar and how to pursue the surge in new business.

We strongly advise all UK businesses keen to trade with Qatar, or who wish to take advantage of the anticipated surge in projects and contracts, to make early contact with the British Chamber of Commerce in the market.

For more information, please visit our website: www.bccq.qa or contact us directly via email: info@bccq.qa

10th August 2017

BCC: UK’s trade position remains underwhelming

Commenting on the trade statistics for June, released today by the ONS, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:
“The sharp deterioration in the UK’s net trade position in June was disappointing, and means the trade deficit in the second quarter of this year came in slightly higher than in the previous quarter. Taken together with the recent jump in the current account deficit, signals the continued weakness of the UK’s external position. The widening in the UK trade deficit in June was largely driven by a sharp rise in imports.

“Businesses continue to report that the slump in the value of sterling since the EU referendum remains something of a double-edged sword, as many exporters are also importers, and so face higher input costs due to the weakening currency. While stronger global economic growth may help to boost the UK’s export performance over the second half of the year, it is unlikely to be sufficient to prevent an overall weakening in growth.

“As the Brexit negotiations unfold, safeguarding the favourable terms of trade that UK firms currently enjoy with partners and markets in Europe and beyond must be a key priority. More must also be done to provide greater practical and front-line assistance to UK businesses looking to trade in both current and new markets.”

1st August 2017

TRADE PREFERENCES – feedback needed

Following on from the announcement a few weeks back that the UK will be maintaining unilateral preferences for Least Developed Countries following its exit from the EU, the Department for International Trade is looking for feedback on the following:

  • What elements could a UK unilateral trade preference scheme include to maximise the development impact?
  • What aspects are most important for businesses exporting and importing under a trade preference scheme?
  • What complementary measures can the UK offer to maximise the benefits of trade arrangements with developing countries?

Please get in touch via email to Jackie Highmore if you have views on the elements that you would like to see in a UK trade preferences scheme.

13th July 2017

BCC Quarterly Economic Survey: Subdued growth in Q2 amid challenging business conditions

The British Chambers of Commerce (BCC) today (Thursday) publishes its Quarterly Economic Survey – the UK’s largest and most authoritative private-sector business survey. Based on the responses of over 7,700 businesses in Q2 2017, the results for both sectors indicate that the UK economy grew at a subdued rate in the second quarter of 2017.

The services sector, a key driver of UK economic growth, saw indicators of domestic activity, employment and investment continue to weaken slightly in the quarter. Consumer-facing industries such as retail outlets and hotels reported weaker growth rates compared to B2B businesses in the quarter.

The survey shows export sales and orders in the manufacturing sector remain solid and well above historical averages. While export activity increased marginally in the services sector, it remains below historic levels.

The balance of firms expecting prices to rise has decreased across both sectors, but remains close to the historically high levels seen in the wake of the EU referendum. The percentage of manufacturers reporting raw materials as the key driver of increased prices remains near record highs.

The findings indicate that while confidence in future turnover and profitability is improving, the balance of service firms revising their investment in training upwards is also at historical lows, particularly for retailers and wholesalers. Both sectors report low levels of improvement in cash flow.

Key findings in the Q2 2017 survey:

  • Overall, the figures for both sectors indicate static growth, with the services sector remaining below historic levels
  • The percentage balance of manufacturing firms expecting the price of their goods to increase over the next three months has fallen slightly from the near-historic-highs reported in the previous quarter (from +47% to +34%), and fell in services from +32% to +28%
  • However, manufacturers report continued pressure from the price of raw materials, with 60% reporting this as the cause of price increases (down from 76%). Pressure from financial costs also rose in both, rising from 12% to 15% in manufacturing and 9% to 13% in services
  • In the manufacturing sector, the balance of firms reporting increasing domestic sales held steady at +20, while domestic orders fell slightly from +16 to +15. The balance reporting export sales rose marginally from +26 to +27 and export orders fell from +22 to +20
  • In services, the balance of firms reporting increasing domestic sales fell from +22 to +19 and domestic orders fell from +19 to +15. The balance reporting increasing export sales rose from +10 to +13 and export orders also rose from +5 to +9
  • The percentage of businesses in both sectors attempting to recruit fell somewhat but remain relatively high at 65% in manufacturing (down from 86%) and 49% in services (down from 59%). Of those, the percentage of firms facing recruitment difficulties dropped but remains high in both sectors at 64% (down from 74%) in manufacturing and 42% in services (down from 58%) 
  • Confidence across the board held fairly steady in the second quarter. The balance of manufacturers confident that turnover would improve over the next 12 months rose from +44 to +46, and the balance for services from +39 to +40. The balance of manufacturing firms confident that profitability would increase rose from +32 to +33 and in services from +28 to +33
  • However, the balance of firms in both sectors reporting improved cashflow remains at historical lows, with +3 in manufacturing and +8 in services

Commenting on the results, Dr Adam Marshall, Director General of the British Chambers of Commerce, said:

“Our latest survey results, which reflect the outlook of companies in all sectors and locations of the UK, indicate that for many businesses growth is static at best, and at worst, beginning to slow.

“It's time for the economy to be put back at the heart of the agenda, with a focus on creating the best possible environment for business growth all across the UK. Government must play its part by tackling the issues that hold businesses back, including labour shortages, weaknesses in our physical and digital infrastructure, and high upfront costs which dampen investment intentions and firms' growth potential. Any talk of higher business taxes to pay for politically-motivated spending must be quashed swiftly, to avoid undermining business confidence further.

"The subdued growth picture also underlines the importance of getting as much clarity on the Brexit transition as possible, as quickly as possible over the coming months."

Suren Thiru, Head of Economics at the BCC, said:

“Our latest survey indicates that UK economic activity remain subdued in the second quarter of 2017.

“Services sector activity stuttered a little with a number of the key balances weakening this quarter. Consumer-focused industries were the worst performers - further evidence that rising inflation is dampening consumer activity. That said, the sector is likely to have been the key driver of second quarter growth. While the manufacturing sector enjoyed a solid quarter, the improvements are from a low base and the longer-term trends suggests that the sector’s contribution to overall UK growth will not be enough to offset weaknesses elsewhere.

“The latest results also point to a continued pick-up in export activity for both service sector firms and manufacturers. The improving growth outlook for some of the UK’s key international markets and the weaker sterling have helped improve trading conditions for UK exporters.

“Rising inflation remains the key challenge for the UK economy this year. Consumer prices are likely to keep rising in the coming months as the recent sizeable increases in the cost of raw materials and other overheads filter through supply chains. However, while still high, the drop in the balance of firms expecting prices to rise indicates that price pressures at the factory gate have moderated a little.”

10th July 2017

BCC: 'No deal' not an option for business communities

One month on from the General Election, the British Chambers of Commerce (BCC) today (Monday) publishes a post-election survey of over 2,400 companies, which shows that while businesses have a range of views on their preferred objectives for the UK in Brexit negotiations, there is almost no support to conclude UK-EU talks without a trade deal.

Asked to consider which option came closest to their view about what the UK’s Brexit negotiation objectives should be, the survey - carried out just after the election - showed:

  • 2% said leave the Single Market and Customs Union, and rely on WTO rules for trade (leave without a trade deal with the EU)
  • 34% said remain in the Single Market and Customs Union
  • 13% said remain in Customs Union only (no hard borders or tariffs, but limited scope to negotiate trade agreements with third countries)
  • 11% said remain in the Single Market only (accept EU regulations and rules in return for full access to market)
  • 28% said a comprehensive Free Trade Agreement and a customs agreement (the government’s pre-election objectives, set at the Prime Minister's Lancaster House speech)

Respondents were also asked about a transition period, and which of the following options they believe is best for their business:

  • 46% said ‘a transition period of three years’
  • 22% said ‘a transition period of longer than three years’
  • 17% said ‘no transition period’

Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“Our results make it clear that there are a range of business views on what the UK should be seeking in a final deal with the EU, but there is near-universal consensus that a deep and comprehensive agreement is needed. 'No deal' isn't seen as a viable option. Businesses want a pragmatic settlement on the practical, real-world issues that affect their operations, not arbitrary political red lines.

“By more than three to one, businesses want a transition period on the way to a final agreement with the EU. This is critical to prevent firms facing the prospect of repeated, costly adjustments to new trading conditions. If companies have to change their business model once in 2019 and again several years thereafter, the competitiveness and investment potential of our firms will be undermined.

“Getting transition arrangements on the negotiations agenda as quickly as possible would give businesses - many of whom are considering big investment decisions now - the confidence to press ahead."

24th June 2017

BCC: guarantee for EU citizens welcome, but long overdue

Responding to the Prime Minister's offer of guarantees for EU citizens living and working in the UK, made at the European Council meeting, Dr Adam Marshall, Director General of the British Chambers of Commerce, said:

"Concerned business communities across the UK will welcome the Prime Minister's proposal to guarantee the rights of EU citizens, but with a tinge of regret and frustration. This offer could have been made loudly and clearly nearly a year ago in the immediate aftermath of the referendum, which would have spared individuals, communities and employers significant angst and worry. Signals matter, and the UK government's lack of clarity until now has meant that many UK firms have lost valued members of staff, with others saying that key employees are thinking about leaving.

"The UK and EU must strive for an ironclad, reciprocal guarantee on citizens’ rights as soon as possible in the Brexit negotiations. Individuals and businesses - both here and on the Continent - cannot be left in limbo until the conclusion of the final Brexit agreement."

19th May 2017

BCC/DHL: Exporter confidence remains high, but exchange rates a concern

The British Chambers of Commerce (BCC), in partnership with DHL, today (Friday) publishes its latest Quarterly International Trade Outlook, which shows that confidence among UK exporters remains strong.

The number of businesses reporting improved export sales increased in the first quarter of 2017. Businesses in both manufacturing and services are also more confident that their turnover and profitability would increase in the coming 12 months.

The BCC/DHL Trade Confidence Index, which measures the volume of trade documentation issued by accredited Chambers of Commerce, rose by 5.5% on the quarter – and is up 9.06% from the same quarter last year – standing at its second highest level on record.

The results show that businesses are continuing to trade despite political uncertainty, however currency fluctuations remain a concern. 52% of manufacturers and 25% of services firms say exchange rates are more of a concern to their business than three months ago.

To maintain momentum, and to help UK firms succeed beyond Brexit, the government should develop an expanded trade mission and fairs programme, help businesses build links with key trade partners and underpin deals, and expand funding for front-line assistance to exporters. Businesses will be looking for the next government to secure frictionless future trade arrangements with the EU, crucial to both importers and exporters, as well as to broker new relationships with emerging markets.

Key findings from the report:

  • The BCC/DHL Trade Confidence Index, a measure of the volume of trade documentation issued nationally, rose by 5.5% on the quarter. The Index now stands at 126.55 –up 9.06% on Q1 2016 – and is the second highest level since records began in 2004
  • The balance of manufacturers reporting improved export sales rose from +16% to +26%. Looking at services, the balance of firms reporting improved export sales rose from +8% to +10%
  • The balance of manufacturers reporting improved export orders rose from +13 to +22 in Q4 2016, while in services it fell slightly from +6% to +5%
  • Looking at expectations of turnover over the next 12 months, the balance of manufacturers confident of an increase held fairly steady, rising from +43% to +44%. In services this rose by four points from +35% to +39%
  • Confidence that profitability would improve rose to +28% for services companies – up from the +21% in Q4 2016. The balance of manufacturers jumped by ten points, from +22% to +32%

Commenting on the findings, Dr Adam Marshall, BCC Director General, said:

“Confidence among exporters is strong, which is a timely reminder that businesses are doing their best to ignore the cacophony of political noise around them and focus on the success of their own operations.

“While confidence among UK exporters is high, rising costs, recruitment difficulties, and concerns around currency fluctuations could temper their growth if allowed to continue unchecked. Alleviating the burden of upfront costs and addressing the skills gap would increase productivity, investment and growth.

“For UK exporters to succeed in the long-term, the next government must deliver not only a Brexit deal which allows for frictionless trade with Europe, but also pragmatic and practical support for businesses looking to develop lasting links with new customers and markets around the world.”

Ian Wilson, CEO DHL Express UK and Ireland, said:

“Despite the many unanswered questions about what a post-Brexit Britain will look like, this latest Quarterly International Trade Outlook demonstrates that UK exporters remain optimistic about what the future holds.

“As a facilitator of international trade, we’ve seen our customers embrace the short term benefits that came with the fall in the value of the pound. However, this report demonstrates that whilst businesses are confident, they are not complacent - with currency fluctuations a lingering concern for exporters. In these uncertain times, there is an even greater imperative to expand the portfolio of markets businesses trade with to help spread the risk across multiple currencies.”

For a copy of the latest Quarterly International Trade Outlook please click here

28th February 2017

Chambers of Commerce: Put practicality, certainty at the heart of Brexit negotiations

As the Chamber Network gathers in Westminster for the BCC Annual Conference, the British Chambers of Commerce has today (Tuesday) published a business blueprint for the UK government ahead of the upcoming Brexit negotiations.

Titled Business Brexit Priorities, the report synthesizes feedback from over 400 businesses at 16 Chamber-hosted focus groups, along with nearly 20,000 responses to Chamber surveys. It puts forward priorities for action across seven key areas where business communities want practical solutions and certainty.

BCC evidence confirms that Europe will remain a key market for UK exporters and importers well into the future. As a consequence, it is imperative that the government achieves a pragmatic UK-EU deal that facilitates continued trade.

The key recommendations in the report are:

  • On the Labour Market, the government should provide certainty for businesses on the residence rights of their existing EU workers, provide clarity on hiring from EU countries during the negotiation period, and avoid expensive and bureaucratic processes for post-Brexit hires from the EU
  • On Trade, the government should aim to minimise tariffs, seek to avoid costly non-tariff barriers, grandfather existing EU free trade agreements with third countries, and expand the trade mission programme
  • On Customs, the government should develop future customs procedures at the UK border in partnership with business, seek to maintain the UK’s position as an entry point for global businesses to Europe
  • On Tax, the government should guarantee that HMRC is appropriately resourced to help businesses through the transition process, and provide clarity on whether VAT legislation will continue to mirror current core VAT principles
  • On Regulation, the government should ensure stability by incorporating existing EU regulations into UK law and maintaining these for a minimum period following Brexit, and ensure that product standards are aligned with, and recognised by, the EU to keep UK products competitive
  • On EU funding, the government should maintain UK access to the European Investment Bank, and ensure there is no funding ‘cliff-edge’ for areas in receipt of EU funding
  • On Northern Ireland, the government must avoid any return to a hard border, so that businesses can move people and goods as freely as possible.

Commenting on the report, Adam Marshall, BCC Director General, said:

“Business communities across the UK want practical considerations, not ideology or politics, at the heart of the government's approach to Brexit negotiations.

"What's debated in Westminster often isn't what matters for most businesses. Most firms care little about the exact process for triggering Article 50, but they care a lot about an unexpected VAT hit to their cash flow, sudden changes to regulation, the inability to recruit the right people for the job, or if their products are stopped by customs authorities at the border. The everyday nitty-gritty of doing business across borders must be front and centre in the negotiation process.

"What's also clear is that the eventual Brexit deal is far from the only thing on the minds of the UK's business communities. An ambitious domestic agenda for business and the economy is also essential so that business can drive our post-Brexit success. Firms across the UK want a clear assurance that Brexit isn't going to be the only thing on the government's economic agenda for the next few years."

Marcus Mason, Head of Business at the BCC, and author of the report, added:

“Since the historic vote on June 23, we have worked with Chamber business communities all across the UK to determine their key priorities for the Brexit transition.

“This report brings those practical priorities together and urges the government to adopt them in the forthcoming negotiations. Chambers of Commerce stand ready to help the government shape a pragmatic and practical approach to the coming transition, so that firms can continue to trade successfully with customers and suppliers across Europe and around the world.”

23rd February 2017

BCC/DHL: Confidence boost for exporters ahead of Article 50 trigger

The British Chambers of Commerce (BCC), in partnership with DHL, today (Thursday) publishes its latest Quarterly International Trade Outlook, which shows that confidence among exporters that their turnover will improve jumped in Q4 2016, ahead of further moves towards Brexit. 

Although the number of businesses reporting that their export sales and orders would improve remained largely constant in the last quarter of 2016, businesses in both manufacturing and services are increasingly confident that they will continue to improve turnover, and that profitability will increase or remain steady in the coming 12 months.

The BCC/DHL Trade Confidence Index, which measures the volume of trade documentation issued by accredited Chambers of Commerce, fell by 1.42% on the quarter – but remains nearly 5% up on the last quarter of 2015.

The results serve as a reminder that businesses are continuing to trade in spite of the uncertainty around Brexit. But to maintain this positivity, the government must focus on the fundamentals of the economy – helping exporters recruit to close a growing skills gap, and provide support for those seeking to navigate currency fluctuations.

Key findings from the report:

  • The BCC/DHL Trade Confidence Index, a measure of the volume of trade documentation issued nationally, fell by 1.42% on the quarter. The Index now stands at 119.96 – and is up 4.81% on Q4 2015
  • The balance of manufacturers reporting improved export sales fell slightly to +16, down one point from the previous quarter. Looking at services, the balance of firms reporting improved export sales remained constant at +8
  • The balance of manufacturers reporting improved export orders rose to +13 from +12 in Q3, while in services this rose one point to +6
  • Looking at expectations of turnover over the next 12 months, the balance of manufacturers confident of an increase rose nine points to +43 - in services this rose seven points to +35
  • Confidence that profitability would improve rose to +21 for services companies – up from the four-year low of +15 seen in Q3 2016. The balance of manufacturers remained constant at +22

Commenting on the findings, Dr Adam Marshall, BCC Director General, said:

“Many exporters remain confident, in spite of uncertainty over our relationship with the EU. Our findings serve as a reminder that it is businesses that trade with other businesses, not governments – but they need support if they are to continue to be positive.

“Our economic forecast suggests that inflation is going to rise above the 2% target this year, which will create pressure on many firms. In addition, the fluctuating currency markets are affecting our exporters and importers – so there are warning signs on the horizon.

“The government cannot give businesses much certainty around either Brexit or currency markets, but it can act closer to home. The Chancellor’s Budget must focus on cutting the up-front costs that government imposes on every business, and promote investment and exports.”

Ian Wilson, CEO DHL Express UK and Ireland, said: 

“UK exporters continue to be undeterred in their ambition to take their products and services overseas, despite turbulent economic times. 

“Whilst this confidence might come as a surprise during these uncertain times, the rapid evolution of e-commerce and technology means that more businesses than ever are realising the opportunity that exporting presents.

“With online technology in overseas markets advancing, UK exporters should remain confident that their products are now more accessible than ever.”

10th February 2017

BCC: UK exporters put in strong performance in final quarter of 2016

Commenting on the UK trade statistics for December 2016, released today by the Office for National Statistics, Mike Spicer, Director of Economics at the British Chambers of Commerce (BCC), said:

“The narrowing in the UK’s trade deficit in the final months of last year is a welcome improvement from the weaker performance in the previous quarter, and reflects a growing number of goods being exported to non-EU countries. As Brexit dominates the headlines, the results are an important reminder that UK companies take advantage of trading opportunities in every part of the world.

“This performance comes despite the mixed reaction of exporters to the depreciation in Sterling – which our research has found is hurting as many as it is helping. Looking ahead, the continued weakness of the pound and the expected slowdown in economic growth will likely dampen demand for consumer imports.

“In order to keep UK businesses trading with the world, companies need more direct support from government such as more investment in trade show access. But with margins under pressure, we need to see action at the Budget to reduce the upfront costs of doing business, particularly business rates. This will free up resource for businesses to invest in people and product development - absolutely necessary to taking full advantage of the growth opportunities in overseas markets."

6th February 2017

BCC International Trade Survey: Fall in Sterling expected to increase cost base and push up prices

The recent fall in the value of Sterling is squeezing domestic sales margins, and increasing the cost base of UK businesses, according to the results of the British Chambers of Commerce’s (BCC) latest International Trade Survey. The findings, released today (Monday), also indicate that the weak pound is expected to push up the prices of products and services.

The results of the survey, run in partnership with moneycorp and based on the responses of nearly 1,500 surveyed businesses, indicate that the recent devaluation of Sterling is having a negative impact on the domestic sales margins of nearly half of businesses (44%). The effect is more diverse on export margins, with roughly equal levels of businesses reporting a positive (25%) and negative (22%) impact, suggesting that while the fall in value of the pound may be helping some UK exporters, it’s also hurting others.
The survey also found that 68% of businesses expect the fall in the value of Sterling to increase their cost base in the coming year. In turn, over half (54%) of companies expect to have to increase the prices of their products and services over the next 12 months.
Away from prices, the findings also show that nearly half of businesses (45%) do not currently manage currency risk. For those that do, invoicing in Sterling instead of their customer’s local foreign currency (32%) was the most popular means, followed by opening a foreign currency bank account to deal with sales and purchases in the same currency (16%), and waiting for an advantageous rate and buying using the spot market (14%). The same number of businesses (46%) don’t expect to manage their currency risk in the next six months.

Dr Adam Marshall, Director General of the British Chambers of Commerce (BCC), said:

“The depreciation of Sterling in recent months has been the main tangible impact that firms have had to grapple with since the EU referendum vote.

“Our research shows that the falling pound has been a double-edged sword for many UK businesses. Nearly as many exporters say the low pound is damaging them as benefiting them. For firms that import, it’s now more expensive, and companies may find themselves locked into contracts with suppliers and unable to be responsive to currency fluctuations.

“Our survey shows that inflation is going to be an important concern for businesses over the coming year. While inflation rates aren’t high by historical standards, they are still putting increasing pressure on companies. Rising costs are squeezing margins, and forcing many firms to increase the prices of their goods and services.

“Currency fluctuations aren’t something in the UK government’s direct control, and they are likely to continue as the Brexit transition unfolds. Ministers must do everything in their power, meantime, to help businesses keep costs down and stay competitive. Alleviating many of the up-front costs facing companies should be a priority for the Budget in March – starting with the sledgehammer of business rates.”

Lee McDarby, Managing Director of UK Corporate International Payments at moneycorp, said:

“The post referendum fall in sterling has clearly had an impact on many UK businesses and, as hedging begins to expire, importers and exporters will have to adapt to the new landscape. For exporters, the move potentially allows for greater competitiveness on an international level; however, importers may now have to think of new ways of protecting their businesses from further volatility.

“The timeframe for stepping away from the European Union is long, with at least two years of negotiation as and when Article 50 is triggered; this means that companies will have to be nimble and proactive when it comes to managing foreign exchange exposure.

“The key events of 2016 have certainly caused market uncertainty and there are no signs that this will subside in 2017. On that basis we are definitely engaging more with new and existing clients who are turning to FX specialists such as moneycorp for support and assistance when it comes to managing their currency risk.”

30th January 2017

BCC International Trade Survey:  Europe to remain key export market despite Brexit vote

UK companies remain committed to strong trading relationships with European customers and suppliers despite the UK’s vote to leave the EU, according to the results of the British Chambers of Commerce’s (BCC) International Trade Survey, released today (Monday).

The results of the survey, based on the responses of nearly 1,500 business people, show that the UK companies surveyed continue to regard Europe as an important trading partner. Around three-quarters of respondents currently sell (76%) and source (73%) goods and services in the EU market.

The findings show that over a third (36%) UK businesses plan on putting more resources into exporting to the European market over the next five years. Europe also remains the market where the higher percentage of businesses (18%) is planning on allocating more resources to sourcing products and services from.

Responding to a question assessing whether the EU referendum has influenced their approach to exporting, nearly a third (31%) of businesses surveyed are looking to export more. The majority (65%) say the EU referendum hasn’t changed their strategy for importing, while 15% say that they are interested in sourcing more internationally. However, there are signs of caution, with 13% looking to source less internationally, which may be as a result of the falling value of the pound making imports more expensive.

Thinking about future trade arrangements with Europe, UK companies surveyed consider the issues of tariffs; non-tariff barriers; and product standards, certification and compliance as the three top priorities for resolution in talks on a Brexit deal.

Dr Adam Marshall, Director General of the British Chambers of Commerce, said:

“These results are an important reminder of the fact that it is businesses that trade, not governments. Although the likely outcome of the Brexit negotiations remains unclear, businesses still see Europe as a primary market for both selling and sourcing inputs – even after the UK leaves the EU.

“Looking ahead, businesses want the best possible terms of trade following the Brexit negotiations, whatever the ultimate model adopted. UK firms want tariffs, costly non-tariff barriers, and product standards to be at the top of the government’s agenda for a future EU trade deal.

“The best news from this survey is that the EU referendum outcome has sparked a greater interest in foreign markets for a significant number of firms. For that very reason, UK companies need sustained, tangible and practical export support that helps them get their goods and services out to the world.”

17th January 2017

BCC comments on Theresa May’s Brexit speech

Commenting on the Prime Minister’s speech on Brexit, Adam Marshall, Director General of the British Chambers of Commerce (BCC) said:

"In business, what you achieve in a negotiation - not what you bid for - is what really matters.

"The Brexit process is no different. While businesses now have a clearer sense of the Prime Minister's top-line priorities, they will come away from her speech knowing little more about the likely outcome of the Brexit negotiations than they did yesterday.

"The simple fact is that businesses all across the UK are carrying on. Directly-affected companies are being pragmatic, and are preparing for a range of possible outcomes.

"Away from Westminster, many businesses are ignoring the Brexit 'noise' completely, and say there needs to be a far bigger focus on getting the basics right here at home. Their message is that Brexit must not become all-consuming, and that having the right skills, infrastructure and business environment across the UK will play a far bigger part in our future success than any eventual Brexit deal."

On the Single Market and Customs Union:

"Many businesses facing immediate post-Brexit impacts have been preparing for the eventuality that the UK would leave both the Single Market and the Customs Union, with some sort of free trade deal to follow. The Prime Minister's remarks largely confirm this, and will lead other firms to think about making similar plans.

“Clarity on barrier-free arrangements between Northern Ireland and the Republic remain critical to business."

On proposals for a transitional period after Brexit:

"Agreeing a reasonable transitional period that gives directly-affected businesses the breathing space they need to adapt to new realities would simply be common sense."

On immigration:

“If, as the Prime Minister suggested, citizens of the EU-27 are subject to future restrictions, a simple and light-touch system is required. Bringing EU nationals into the costly and bureaucratic Home Office work permit process would be a huge regulatory burden for many businesses, especially when their immediate skills shortages at every level remain acute.”

11th January 2017

BCC: Sterling devaluation doing little to help UK’s trade position


Commenting on the trade statistics for November 2016, published today by the Office for National Statistics, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:

“The widening of the UK’s trade deficit in November is disappointing, and signifies a considerably weaker trading position than the average for the year. While exports increased slightly in the month, this was more than offset by a record rise in imports, confirming that there is little evidence that the fall in the value of the pound is boosting the UK’s overall trade balance.

“Trade is likely to make a greater contribution to UK GDP in the next few years, as the persistent currency weakness feeds through into improved price competitiveness for some exporters, and diminishes demand for imports. However, the extent of any improvement is likely to be curbed by subdued global trade growth, and the higher cost of imported raw materials.

“In order to achieve a meaningful improvement in our export performance, the government must do more to provide businesses with direct support to access new markets.”

10th January 2017

bmi regional joins forces
with the
Department for International Trade

Airline offers special discounts for UK businesses



British owned airline, bmi regional has partnered with the Department for International Trade to support its ‘Exporting is GREAT’ campaign with discounts for business travellers across its routes.

The campaign aims to inspire businesses to take advantage of the global demand for British goods and services, with tens of thousands of exporting opportunities available for UK companies globally. The Government wants to get more businesses exporting with a target of 100,000 additional exporters by 2020.

At present, statistics show that trade exports for the UK are growing but are far below UK import figures. In October 2016, HMRC reported £28.8 billion in overseas trade, whilst the figure for imports sits at £39.6 billion.*

As an official partner of the campaign and working closely with Exporting is GREAT, bmi regional will be offering special rates for business travellers and will also be supporting the campaign’s Export Hub as it visits locations throughout the UK. We know that one barrier to exporting is the cost of travel and accessibility to new buyers overseas and this partnership will help bring the costs of travel down for businesses.

The airline’s move to support a business led campaign follows bmi regional’s previous incentive to help small companies sell overseas – Seats for Start Ups.

Seats for Start Ups, which ran throughout 2016, saw the airline offering new businesses the chance to win free international flights – designed to enable them to grow their business and sell overseas.

This new campaign goes a step further, with bmi regional offering ALL participating businesses a special discount on EVERY bmi regional route from the UK (excluding codeshares).

Commenting on the partnership, bmi regional’s chief commercial officer, Jochen Schnadt said: “Business travel is a key part of our strategy and helping businesses, large and small, to grow their export trade is fundamental to bmi regional’s strategy of enabling business. We are delighted to be part of this campaign which demonstrates the government’s and industry’s commitment to helping businesses grow and succeed. Our vision as a partner is to help businesses reach their goals and opportunities by providing a quality, efficient and cost effective transport service.”

He continues: “bmi regional has deliberately focused on flying out of specific UK airports at regular and convenient times to make business travel, even returning in a day, a viable option for our clients. We also maintain an inclusive pricing strategy with all fares offering complimentary in-flight drinks and snacks, 23kg hold luggage and allocated seating as standard. Furthermore, our speedy 30 minute check-ins are part of our efforts to create a convenient and seamless journey experience.”

International Trade Minister, Mark Garnier said: “The global appetite for UK goods and services has never been greater. With strong demand out there, I’m delighted that the Department for International Trade will be partnering with bmi to help UK companies seize the opportunities.

“We are determined to do all we can to equip UK companies with the guidance and support needed to help them take the next step in their exporting journey. Our new great.gov.uk digital hub and partnerships like this will deliver that journey.”
Business wishing to take part in the initiative should visit https://www.great.gov.uk/uk/.

To take advantage of bmi regional’s special discounts for business travellers visit https://www.flybmi.com/exporting-is-great and use discount code EXPORT10 when booking.

 

 

We like to know what you think

We constantly strive to improve the products & services we offer and how they are delivered to you. Please let us know what we are doing well and any areas where you think we could be doing better.

Email your comments to Maureen Frost our Chief Executive at maureen.frost@hampshirechamber.co.uk

To view our website terms of use please click here