British wages could receive a much-needed raise, and gross domestic product (GDP) growth in the economy may be bolstered by £3.7billion a year under a landmark new deal.
The UK has secured a trade agreement with the Gulf Cooperation Council, becoming the first G7 nation to strike such a deal with the six-member bloc comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.
This agreement is projected to deliver an annual boost of £3.7billion to the UK economy in the long term, with wages set to rise by £1.9billion each year.
Once fully implemented, the deal will eliminate approximately £580 million in duties currently levied on British exports to the region, with £360million of those tariffs scrapped from day one.
The Prime Minister has welcomed the new trade deal between the UK and Gulf states
|
GETTY
The announcement strengthens economic ties with a strategically significant region whilst providing domestic resilience, according to the Government.
British food and drink producers stand to gain significantly from the arrangement, with exports including cereals, cheddar cheese, chocolate and butter becoming tariff-free once the agreement takes effect.
The GCC currently imports more than 80 per cent of its food supplies, creating substantial opportunities for UK manufacturers of iconic products.
Prime Minister Keir Starmer described the agreement as “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”.
GDP has been downgraded by the OBR for 2026. | OBR
A fifth of the world’s oil and gas passes through the Strait of Hormuz before the blockade | GB NEWS
He added: “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 deal also removes tariffs on medical equipment and advanced manufacturing goods, whilst introducing unprecedented GCC commitments on the free movement of data.
Services represent approximately 80 per cent of the British economy and account for more than half of UK exports to GCC nations, with the sector now guaranteed market access under the new terms.
Business 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.”
The Chancellor has backed the new deal
|
PAThe agreement enables British companies to store and process data outside the Gulf region for the first time, eliminating the need for costly local data centres.
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.”
The agreement represents the government’s fifth major trade deal since taking office, following arrangements with India, the United States, the European Union, and South Korea.
Combined with the India agreement, the two deals are expected to contribute more than £8 billion annually to UK GDP when measured against 2040 projections.
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.”