On 8 May, the U.K. and the U.S. agreed a trade deal. The full details have not been outlined, but overall, the agreement leaves tariffs on most UK goods entering the US at a higher rate (10%) than before the tariff disruptions (around 2.5% on average). There is little direct economic impact given that only 2% of GDP comes from goods exports to the U.S., but it is helpful that the U.K. has agreed to a trade deal to prevent the risk that tariffs go up substantially at the end of the 90-day pause. It may also be a strong positive for some affected sectors and companies. For example, for U.K. steel and aluminium, the U.S. tariffs of 25% announced in March have been reduced to zero. However, it is currently unclear whether this will also apply to steel and aluminium derivative products as well, so the full details of the agreement will be important. Interest rate cuts announced yesterday have already been factored in to growth forecasts, but should provide stimulus, particularly in the housing sector.
CPA Market Data
FIS works with a number of companies to monitor the market performance and provide critical information to our members.