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Why experts think Trump’s win will be blow to UK economy and your wallet

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DONALD TRUMP’S return to the US presidency casts an uncertain shadow over the UK, potentially leading to economic shocks that could burden British households with higher costs, lower growth, and less job security. His policy unpredictability and “America First” doctrine spell challenges for UK businesses, while his strong-willed approach to trade and foreign policy could drive a wedge between the two countries.

TRADE TENSIONS COULD COST UK EXPORTERS

Trump’s protectionist stance has reignited concerns about tariffs, which could cut deep into the UK economy. The US is Britain’s largest export market, receiving around 25% of all UK-manufactured exports. Proposed tariffs of up to 10% on imports to the US would affect major British exporters such as Rolls Royce and BAE Systems, impacting an estimated £56 billion in trade. If enacted, such tariffs could push costs higher, threatening thousands of jobs in sectors dependent on American demand.

A STRAINED UK-US RELATIONSHIP

While Prime Minister Keir Starmer and Foreign Secretary David Lammy have made diplomatic overtures to Trump, attending dinners and working closely with Trump’s allies, challenges in the relationship remain evident. Starmer’s reserved style contrasts with Trump’s brash manner, raising questions about how compatible their leadership styles are. This uncertainty, highlighted by one diplomat’s remark that Trump “doesn’t give a stuff” about UK relations, suggests a bumpy road ahead.

Diplomats have tirelessly built relationships with Trump’s inner circle, including former Secretary of State Mike Pompeo and Trump’s likely national security adviser, Elbridge Colby. However, Trump’s mercurial nature, marked by unpredictable social media outbursts and contentious negotiations, may test these connections. As Lammy put it, relations with Trump are likely to be “bumpy, noisy, and transactional.”

ECONOMIC FALLOUT AND SLOWER GROWTH

The potential for UK economic slowdown under Trump’s policies is profound. Economists from the National Institute of Economic and Social Research (NIESR) predict UK growth will be halved if Trump enforces his proposed tariffs. Without tariffs, the UK could expect moderate growth of around 1.2% next year; however, this figure could drop as low as 0.4% should the trade restrictions come into force. Coupled with rising inflation, this could lead to diminished purchasing power for households already grappling with a cost-of-living crisis.

CURRENCY VOLATILITY AND JOB THREATS

Trump’s victory has already weakened the pound, with the GBP/USD exchange rate falling sharply as results came in. Investors are wary of increased tariffs and Trump’s isolationist policies, both of which could stoke currency volatility and strain the UK economy. A weakened pound also drives up the cost of imports, which affects consumers directly through higher prices for everyday goods.

The potential loss of thousands of jobs in sectors heavily reliant on US trade adds to the bleak outlook. Automotive manufacturing, for instance, could be heavily impacted by Trump’s threat of a 100% tariff on imported cars. Companies like Jaguar Land Rover, whose Land Rover Defender was one of the UK’s top exports to the US, may face cutbacks if tariffs make exports uncompetitive.

UNCERTAIN INVESTMENT ENVIRONMENT

The UK’s global-facing stock market may also suffer. Companies in the FTSE 100 and FTSE 250, which derive significant profits from international operations, could experience volatility as Trump’s policies introduce uncertainty into transatlantic trade. Such uncertainty could lead investors to shy away from the UK market, diminishing capital inflows and further affecting economic growth.

SHIFTS IN GLOBAL PRIORITIES

Beyond economic pressures, Trump’s foreign policy outlook could exacerbate the UK’s security challenges. Trump’s “America First” rhetoric and emphasis on Asia over Europe may leave European allies, including the UK, less confident about US support for initiatives like defending Ukraine. While the UK has publicly aligned with Trump’s view that Europe should shoulder more of its defense costs, there are fears that a US pivot to Asia could weaken the cohesion of NATO and reduce military backing for Europe.

Lammy has attempted to foster an understanding of Trump’s instincts, acknowledging his focus on American interests and recognition of Asia’s growing influence. However, as the UK looks toward cooperation on issues like Ukraine, this alignment may prove insufficient in securing the support needed to address shared security concerns.

BRITISH FAMILIES TO SHOULDER THE COST

For British families, the impact of a Trump presidency could hit close to home. With increased tariffs potentially driving up inflation by 3-4%, the Bank of England may feel compelled to raise interest rates by as much as 2-3% in response. For households already feeling the pinch from rising prices, this could lead to higher mortgage costs, increased borrowing rates, and a tougher job market, further squeezing living standards.

Though the UK government has prepared for Trump’s return, the effectiveness of these plans remains to be seen. As Britain braces for another unpredictable chapter with Trump at the helm, citizens may face a “bumpy, noisy, and transactional” relationship that could reshape the economy, impacting everything from job security to the prices at the supermarket.

Business

Pembrokeshire industrial jobs ‘could be at risk’ as parties clash over investment

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TRADE unions have warned that hundreds of industrial jobs in Pembrokeshire could be at risk without stronger long-term support for Welsh manufacturing, as political parties set out competing approaches ahead of the Senedd elections.

TUC Cymru says its analysis suggests 939 industrial jobs in Pembrokeshire could be vulnerable if investment in clean industrial upgrades were withdrawn, warning that policies proposed by Reform UK, and to a lesser extent the Conservatives, pose the greatest risk to industrial employment.

The warning comes as the union body launched its “Save Welsh Industry – No More Site Closures!” campaign at events in Deeside and Swansea, calling on all political parties to commit to a five-point plan to protect and future-proof Welsh industry.

According to TUC Cymru, jobs at risk locally include 434 in automotive supply chains, 183 in rubber and plastics and 75 in glass manufacturing. The union body says these sectors rely on continued investment to remain competitive and avoid offshoring.

TUC Cymru said its modelling focused on industries most exposed to closure or relocation if industrial modernisation and decarbonisation are not delivered. It argues that without sustained public and private investment, Welsh manufacturing faces further decline.

A GMB member working at Valero in Pembrokeshire said: “It’s clear Nigel Farage has no clear plan. I can see this industry collapsing under his policies. We need support, not division. His way will lead to job losses across the board and the lights will go out.”

The union body stressed that all parties need to strengthen their industrial policies, but claimed Reform UK’s stated opposition to net zero-related investment would place the largest number of jobs at risk across Wales, estimating that almost 40,000 industrial jobs nationally could be affected. Conservative policies were also criticised, though the TUC said the likelihood of job losses under the Conservatives was lower.

Labour has rejected claims that Welsh industry is being neglected, pointing to recent investment announcements made at the Wales Investment Summit, where more than £16bn worth of projects were highlighted as being in the pipeline across Wales.

Ministers said the summit demonstrated growing investor confidence, with projects linked to clean energy, advanced manufacturing, ports, digital infrastructure and battery storage, and thousands of jobs expected as schemes move from planning into delivery.

Labour has argued that public investment is being used to unlock private sector funding, particularly in industrial regions, and says modernising industry is essential to keeping Welsh manufacturing competitive while protecting long-term employment.

At UK level, the party has also highlighted its National Wealth Fund and GB Energy commitments, which it says will support domestic supply chains, reduce long-term energy costs for industry and help secure both existing and future jobs.

Opposition parties and some business groups have questioned whether all announced projects will translate into permanent employment, arguing that greater clarity is needed on timescales and delivery.

Reform UK has argued that scrapping net zero policies would cut public spending and reduce costs for households and businesses, while the Conservatives have pledged to roll back climate-related targets and reduce regulation on industry.

Unions dispute those claims, warning that higher electricity prices and a lack of investment would make Welsh industry less competitive internationally.

TUC Cymru President Tom Hoyles said Welsh industry needed urgent action from all parties to survive and thrive in the 21st century, warning that policies which sought to turn back the clock could put thousands of Welsh jobs at risk.

With industrial areas including Flintshire, Neath Port Talbot and Carmarthenshire also identified as facing significant pressures, the future of Welsh manufacturing is expected to remain a key political issue in the run-up to the Senedd elections.

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Business

New digital toolkit aims to future-proof rural Welsh businesses in AI search era

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A NEW digital toolkit developed in Ceredigion is being hailed as a potential game-changer for small businesses in rural Wales, as artificial intelligence reshapes how customers discover local services online.

Created by Antur Cymru Enterprise, the SMART Busnes programme is giving Welsh SMEs an early foothold in Answer Engine Optimisation (AEO) – a rapidly emerging discipline focused on how businesses appear within AI-generated search responses.

As AI-driven tools increasingly replace traditional search results with instant, conversational answers, SMART Busnes – supported by the UK Shared Prosperity Fund – has launched one of the first practical AEO toolkits available in Wales.

The initiative is being led by Digital Business Advisor Lynne Rees and centres on a new insight framework known as Agentic AEO. The approach is designed to help rural and micro-businesses remain visible online as search engines and AI platforms prioritise structured, easily interpreted information over conventional keyword-based webpages.

Kevin Harrington, Project Manager for SMART Busnes

Kevin Harrington, Project Manager for SMART Busnes, said the shift represents a fundamental change in how businesses need to think about their online presence.

“AI search is here to stay, and our Agentic AEO insight series isn’t a tweak – it’s a reset,” he said.

“It’s about helping Welsh SMEs show up wherever customers search: on Google, on social media, and increasingly within AI-generated answers. This gives rural businesses access to the kind of digital advantage that large brands often pay thousands of pounds for.”

Traditional search engine optimisation is already being overtaken by AI-led systems such as Google’s Search Generative Experience and tools like ChatGPT, which provide direct responses rather than lists of links.

For small businesses, this presents a growing risk. If online content is not structured in a way AI tools can understand, businesses may fall below the point where potential customers ever see them.

Agentic AEO focuses on improving clarity, structure and user intent across websites, social media platforms and Google Business Profiles. By presenting information in formats AI systems can easily process, businesses can improve both visibility and credibility within automated responses.

The SMART Busnes AEO Insight Series provides practical support, including step-by-step guidance on restructuring webpages, examples of effective layouts, and tailored AI prompts to help business owners produce optimised content quickly and affordably. Even modest changes – such as a website review, targeted content update or short advisory session – can influence how a business appears in search results over the coming year.

Antur Cymru chief executive Bronwen Raine

Antur Cymru chief executive Bronwen Raine said the programme was designed to help businesses adapt to long-term change.

“SMART Busnes was created to support small businesses through change, not simply to chase trends,” she said.

“The Agentic AEO insight series shows how Shared Prosperity Fund investment is driving genuine innovation, building confidence, skills and sustainability across local economies.”

With many SEO providers in Wales still focused on older techniques, SMART Busnes is positioning Ceredigion and the wider Mid and West Wales region at the forefront of AEO adoption.

By translating emerging digital theory into accessible, practical support, the programme aims to strengthen resilience among rural enterprises and ensure they remain visible, trusted and competitive in an AI-led future.

More information about SMART Busnes and the support offered by Antur Cymru Enterprise is available via the organisation’s website.

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Business

Unemployment in Wales rises to highest level in a decade

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Welsh jobless rate hits 6.1% as Conservatives blame Labour and Plaid budget deal

UNEMPLOYMENT in Wales has climbed to its highest level in ten years, according to the latest labour market figures.

Statistics covering September and October 2025 show the unemployment rate in Wales now stands at 6.1 per cent — the highest since mid-2015. The figure represents a rise of 1.4 percentage points compared with the previous quarter and remains higher than the UK average.

The increase comes amid continuing pressure on households and businesses, with higher costs, weaker growth and ongoing uncertainty affecting parts of the UK economy.

The figures have prompted criticism from the Welsh Conservatives, who have blamed both the UK Labour Government and the Welsh Government for what they describe as a deepening employment crisis in Wales.

Commenting on the data, Welsh Conservative Shadow Cabinet Secretary for Economy and Energy, Samuel Kurtz MS said the Welsh Government needed to take urgent action.

“Labour and Plaid’s unemployment crisis is deepening; the Welsh Government must get a grip,” he said.

“Rachel Reeves’ latest budget has hit business hard, with unemployment rising every month under Labour and yet again higher here in Wales than elsewhere.

“Labour can’t be trusted with the economy. The Welsh Conservatives are offering a bold and costed tax-cutting agenda to kickstart growth, including the abolition of stamp duty and cuts to business rates, but Plaid and Labour’s stitch-up of a budget deal will mean more of the same economic decline.”

The Welsh Government has previously argued that employment figures are influenced by wider global and UK-wide economic challenges, as well as long-standing structural issues within the Welsh economy, including lower average wages and higher levels of economic inactivity.

Ministers have pointed to investment in skills, apprenticeships and infrastructure as part of efforts to support jobs and stimulate growth, while also noting that key economic levers remain reserved to Westminster.

Economists caution that quarterly unemployment figures can fluctuate and should be viewed alongside longer-term trends, including economic inactivity and underemployment.

However, with unemployment now at its highest level for a decade, pressure is increasing on both the UK and Welsh governments to demonstrate how their economic policies will deliver sustained job growth in Wales.

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