Wages and GDP to see boost as UK and Gulf strike historic multi-billion-pound trade deal
|
Deal could boost the UK economy by an estimated £3.7 billion every
year and increase wages by £1.9 billion annually in the long
run. UK becomes the first G7 country to agree trade
deal with the GCC, bolstering our partnership with a strategically
vital region and securing economic resilience at home.
Deal removes tariffs on food exports, medical equipment and
advanced manufacturing, plus first-of-its-kind GCC commitments on
free flow of...Request free trial
The UK could see a boost to growth and higher wages for decades to come after becoming the first G7 country to secure a trade deal with the Gulf Cooperation Council (GCC) today - strengthening our economic partnership with the region, supporting jobs in the long term, and bolstering domestic resilience.
The announcement reflects the UK's solidarity and long-term
cooperation with its Gulf partners – Bahrain, Kuwait, Oman,
Qatar, Saudi Arabia and UAE - and our shared commitment to open
trade, mutual prosperity, and long-term economic
success. Prime Minister Keir Starmer said: “Today's agreement is a huge win for British business, and for working people who will feel the benefits in the years ahead through higher wages and more opportunities. "This government has now secured five major trade deals with international partners, delivering on our commitment to drive growth, support jobs and strengthen the UK economy. "The Gulf states are valued economic partners and this agreement deepens that relationship, building trust and unlocking new possibilities for trade and investment." The deal is estimated to add £3.7 billion to the UK economy every year in the long run when compared to 2040 projections and £1.9 billion in real wages, delivering for businesses and working people. Business and Trade Secretary Peter Kyle said: “I'm proud that the UK is the first G7 country to secure a modern and ambitious trade deal with the GCC – an important and growing set of markets. “For this Government to meet the challenges that our country faces, incremental change won't cut it. That's why major trade deals like this one, and that we secured with India, the US, South Korea and the EU, are vital for moving the dial towards long-term, sustainable economic growth with benefits people and businesses can see and feel. “At a time of increased instability, today's announcement sends a clear signal of confidence - giving UK exporters the certainty they need to plan ahead and reinforcing the strength and stability of the UK's trading relationship with the Gulf at a critical moment.” The UK autos industry alongside high street names like Holland & Barrett stand to gain significantly from the deal, through tariff reductions, stronger Intellectual Property protections and simplified customs processes. By reducing the burdens that create barriers to trade, it will give UK businesses a competitive edge. Anthony Houghton, Group Chief Executive Officer of Holland & Barrett, said: "We welcome this landmark agreement, which deepens economic ties between our markets. The Gulf is strategically important for us, as we continue our growth journey and expand our international presence. “Fair, reliable and low-barrier trading is essential for businesses to compete and expand internationally with confidence. This agreement provides that stability, supporting companies like ours to grow and serve customers across the region." Chancellor of the Exchequer Rachel Reeves said: “This agreement is good for jobs, good for industry and ultimately good for consumers, opening up a world of economic opportunity with a strategically important region.
“Our fifth trade deal since taking office, it's proof we are
backing British firms to compete and win globally,
delivering growth, security and jobs, and that we have the right
economic plan.” UK services - which account for around 80% of the British economy and over half of the UK exports to GCC – will gain guaranteed market access under this deal. In 2024, there were over 400,000 business visits made from the UK to the Middle East so this deal will help British professionals including lawyers, engineers and consultants to travel more easily and stay longer in the region. Anna Anthony, EY UK Regional Managing Partner, said: "The UK exported more than £20 billion in services to GCC countries last year, and this agreement should create even greater opportunities for UK professional services businesses in these high-growth markets. “The agreement's visa transparency and digital trade provisions will make it easier for UK professionals to deliver in-person and cross-border services, providing businesses with the clarity and confidence to compete in these markets.” Delivering on key business asks, the deal will:
This agreement, which could increase bilateral trade by 19.8%, is the latest in a series of major international deals the UK has struck with partners around the world to support businesses to export and grow, boost jobs and increase wages. When combined with the India trade deal, the agreements are expected to add over £8 billion a year to UK GDP when compared to 2040 projections. ENDS Notes to editors Data sources for this release include:
|