Business

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

Published

3 weeks ago

November 6, 2024

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

Deposit Return Scheme diversion ‘illogical’ says Pembrokeshire brewery

Published

4 hours ago

November 23, 2024

Tom Sinclair

TENBY HARBOUR BREWERY and local Senedd Member Samuel Kurtz have urged the Welsh Government to reconsider its decision to withdraw from a UK-wide Deposit Return Scheme (DRS) due to its insistence on including glass.

Earlier this week, Climate Change Secretary Huw Irranca-Davies announced that the Welsh Government would no longer participate in the development of a UK-wide DRS, citing issues arising from the UK Internal Market Act 2020. This decision is believed to be influenced by the Welsh Government’s plan to include glass in its scheme—a factor that contributed to the collapse of Scotland’s DRS in 2023.

The move has been met with frustration and anger from numerous organisations, who argue that this divergence will increase costs for Welsh producers and consumers.

Commenting on the matter, Samuel Kurtz said: “This decision is deeply frustrating, and to diverge from a UK-wide scheme shows that it is not one made with the best interests of Welsh consumers and producers at its core.

“The UK market is so interlinked that any decision which places Welsh businesses at a competitive disadvantage should not proceed. These calls from a range of industry and business representatives have been ignored by the Welsh Government.

“For the sake of our businesses and consumers, I urge the Welsh Government to reconsider its decision, align itself with the UK-wide scheme, and provide proper support to Welsh businesses.”

Industries, especially the micro-brewery sector, would be especially hit hard in Wales by the Welsh Governments choice.

Speaking following this announcement, Richard Johnson, Head Brewer at Tenby Harbour Brewery said:

“The brewing industry has had to tread a path through covid lockdowns, energy price increases, a cost of living crisis and rising wage and national insurance bills, making it increasingly difficult for brewers get good returns and re-invest in their businesses.

“Wales is a recycling nation, so a blunt ‘one size fits all’ approach creates additional logistical and financial burdens on the smallest producers, when the very largest producers are generating the majority of the recycling demand.

“It also seems illogical to diverge away from a UK wide scheme which will put Welsh brewers and drinks producers at a disadvantage.

“The UK and Wales has a proud brewing heritage, but adding in measures such as DRS to small brewers means that their time and money are directed to these activities, instead of using their time for innovation and R&D, of which the UK brewing scene is known and revered for.”

Business

Bluestone crowned ‘Best Small Company for UK Parks and Lodge Holidays’

Published

4 hours ago

November 23, 2024

Tom Sinclair

BLUESTONE is celebrating a major win after being named the Best Small Company for UK Parks and Lodges Holidays at the prestigious British Travel Awards 2024.

The announcement was made at the prestigious awards ceremony this week, marking yet another significant achievement for the popular West Wales destination.

This award recognises Bluestone’s commitment to providing exceptional family holiday experiences at its 500-acre resort in the stunning Pembrokeshire Coast National Park.

“We are absolutely thrilled to receive this award,” said Bethan Rees, Head of Marketing at Bluestone. “It’s a testament to the hard work and dedication of our entire team, who create magical and memorable experiences for families all year round. We are incredibly grateful to every single one of our guests who voted for us and who choose to visit us year on year.

“When you look at the array of other finalists, the award demonstrates why we’re so proud of winning it. This is due to our continued investment, team, and commitment to environmentally sustainable tourism.”

This award builds on Bluestone’s impressive track record. It has consistently received high praise for its family-friendly facilities, commitment to sustainability, and dedication to providing outstanding customer service. Earlier this year, Bluestone was again recognised by Which? as one of the UK’s top holiday destinations and the best rated in Wales.

The British Travel Awards are the largest consumer-voted awards programme in the UK. Winning this award highlights Bluestone’s position as a leader in the family holiday market and reinforces its reputation as a top choice for unforgettable family getaways.

Bluestone, which employs over 800 people and is one of the largest employers in West Wales, is also committed to investing in its people and local community. It provides extensive training and development through its People Services team and the Bluestone Academy. In addition, it supports a wide range of local projects and initiatives through the Bluestone Foundation.

Business

Ascona CEO honoured at 2024 Allica Bank Great British Entrepreneur Awards

Published

12 hours ago

November 23, 2024

Tom Sinclair

ASCONA GROUP, the seventh-largest independent forecourt operator in the UK and one of Wales’ fastest-growing companies for the past three years, has achieved a significant milestone. Darren Briggs, CEO and founder, has been recognised at the 2024 Allica Bank Great British Entrepreneur Awards, securing wins in two prestigious categories: ‘Scale-Up Entrepreneur of the Year – Wales’ and the inaugural ‘Randall Foundation Entrepreneur of the Year – Wales.’

Celebrating its 12th anniversary, the Great British Entrepreneur Awards highlight innovators and trailblazers shaping the UK economy. The newly introduced ‘Randall Foundation Entrepreneur of the Year’ award celebrates business leaders whose ventures align with the foundation’s mission to save lives, improve life chances, and positively impact local communities.

Pembrokeshire-based Ascona’s commitment to community support has been a cornerstone of its success. The company established The Ascona Foundation in 2020 and has since donated over £400,000 to local, national, and community organisations.

Reflecting on the achievement, Darren Briggs said:
“It is a great honour to be recognised with such prestigious awards at this year’s Great British Entrepreneur Awards.

“I am incredibly proud of Ascona and everything we have achieved over the years. This is another milestone for our business and a testament to the hard work, commitment, and ethos of ‘Team Ascona.’

“However, I am most proud of our charitable endeavours and the team’s dedication to giving back. This year, we remain committed to our fundraising efforts, including our partnership with Wales Air Ambulance, as we continue to support the communities we serve.”

Since its founding, Ascona Group has focused on driving innovation in the forecourt sector while fostering community engagement. This dual commitment to growth and giving back has positioned the company as a leader in its field.

Ascona’s charitable initiatives have supported various causes, enhancing lives across Wales and beyond. Through partnerships with organisations such as Wales Air Ambulance, the Group continues to make a tangible difference.