Deloitte survey: business sentiment on the future of UK trade improves

• Optimism about the future of the EU-UK relationship is high (64%), with fewer UK businesses (57%) reporting losses with the EU compared to two years prior (74%); 
• The vast majority (90%) of UK businesses are seeking to mitigate the impact of a potentially higher tariff global trading environment, with strategies including increasing prices, exporting to alternative markets and relocating production; 
• Most business leaders rate the UK’s Free Trade Agreement (FTA) programme highly in terms of benefit to their business (61%) and the UK economy (71%). 

UK businesses are experiencing a period of relative stability in their trade relations with the EU following the initial disruptions of Brexit, according to Deloitte’s third annual Attitudes to Trade Survey*. The survey, which polled 750 UK business leaders, found that while over half (57%) still report a decline in EU trade, this represents a marked improvement from the 74% reported two years prior. 

64% of businesses believe the Government’s trade policy towards Europe to be beneficial to their business over the next five years. The review of the UK-EU Trade and Cooperation Agreement is also set to bring further benefits. 

Amanda Tickel, Head of Tax and Trade Policy at Deloitte UK, said: “The growth in optimism about UK-EU relations probably reflects the new Government’s clear trade policy to reset relations with the EU. The Prime Minister has promised a new UK trade strategy for 2025 and has held dialogues with EU leaders to forge a way forward to a new partnership.” 

Business and Trade Secretary Jonathan Reynolds said: “This is yet more evidence that businesses are increasingly confident about the future and this government’s Plan for Change. 

“We’ve shifted the dial as part of our twin track approach to trade – resetting relations with Europe while seizing opportunities to access new markets. Our upcoming Trade Strategy will set out our plan to back British business, boost exports, and deliver economic growth for the UK.”

The survey found that business leaders are divided on the ideal balance between regulatory autonomy and closer trading ties with the EU. Specifically, 42% favour retaining autonomy while aligning with EU regulations in specific sectors, 28% are open to dynamic alignment with EU rules in certain areas, and 18% support full alignment, including a role for the European Court of Justice. 

Businesses seek to offset tariff challenges

The survey found that 90% of UK businesses are intending to mitigate the impact of a potentially higher tariff trading environment; nearly half of respondents plan to mitigate the impact by increasing prices (45%) and exploring alternative export markets (47%). However, nearly half (45%) have not yet put a strategy in place. 

In addition, 22% of businesses are considering moving production to the United States, and 17% are looking to shift operations away from China. Nevertheless, over half (55%) of respondents anticipate that China will expand its role in their supply chains, with only 19% believing that China will play less of a role.

James Caldecourt, Head of International Trade at Deloitte UK, added: “Most international businesses recognise the need to prepare for a potentially higher-tariff trading environment, but many haven’t yet put a strategy in place. Businesses should be assessing their tariff exposure and understanding how their operations could be affected, so that they can react quickly if trading conditions become more challenging.” 

UK businesses embrace global trade opportunities

Most business leaders now have a positive attitude towards FTAs with 61% believing that FTAs could be beneficial for their business. 71% believe UK FTAs will have a positive impact on economic growth. 

In December 2024, the UK entered into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and over half (52%) of business leaders expect to export more to CPTPP countries over the next five years.

The UK Government is intending to seek targeted trade agreements which benefit specific sectors, such as digital or mutual recognition agreements, as well as comprehensive FTAs. A significant majority of business leaders felt that the Government should continue to prioritise comprehensive FTAs (64%) over more bespoke sector-focused agreements (33%). 

Caldecourt added: “It is clear throughout our survey data that business confidence in the UK’s trade policy programme has grown consistently over recent years. Now that several new trade agreements are taking effect in the UK, businesses should be evaluating their operations and assessing how they can fully utilise the improved terms of trade on offer.”

Growing confidence in government engagement 

The stabilisation in post-Brexit trade with the EU and the support for FTAs is underpinned by increased business confidence in UK trade policy over recent years. For the third consecutive year, there has been an increase in business leaders’ approval of how well the UK government is communicating the benefits of trade agreements (57%), and more businesses are regularly engaging with government about trade policy (64%). 

-Ends- 

Notes to editors

*About the research

The survey explores UK businesses’ sentiment towards UK trade policy and identifies key challenges facing UK businesses. Conducted in association with polling group Opinium between 28 November and 3 December 2024, the survey is based on the responses of 750 senior decision-makers representing a range of large, medium and small-sized businesses trading in both goods and services from the UK. Of these respondents, 100 were C-suite representatives of small businesses (10-49 employees); 150 respondents were board level representatives of medium-sized businesses (50-249 employees); 250 respondents were at least senior directors or decision makers at large businesses (250-999 employees); and 250 respondents were at least senior directors or decision makers at large corporates (1000+ employees).