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UK Economic Pulse: Stagnation in July Signals a Fragile Balance for Trade

Sep 17, 2025 | , , , , , , ,

The UK economy stalled in July 2025, with GDP flatlining after June’s 0.4% rise. While this performance matched market expectations, the detail matters: services and construction posted marginal gains, but a 0.9% drop in industrial output dragged the total to zero.

For manufacturers, the 1.3% decline in production over the three months to July is a warning sign. Weakness in sectors such as pharmaceuticals, which typically underpin high-value exports, reflects reduced investment and ongoing global trade frictions. For importers, slower factory output means less demand for inbound raw materials and components, while exporters face thinner volumes and heightened uncertainty around international orders.

Services activity edged up by 0.1% in July, supported by retail and hospitality, while construction expanded 0.2%. For retailers, this stability is important as consumer-facing demand keeps supply chains active and underpins steady import flows of finished goods.

The resilience of construction, meanwhile, sustains demand for bulk transport, materials distribution, and specialist haulage.

Retail and eCommerce continue to play a vital role in logistics real estate, driving nearly one-third of all industrial and warehouse take-up in the 12 months to Q2 2025. However, rising vacancies and slower rental growth suggest a more competitive property market, with prime property leading.

A Slow-Growth Outlook

Economists forecast modest UK growth of 0.3% for Q3, keeping recession fears at bay but offering little upside. For manufacturers and exporters, this translates into subdued demand at home and limited relief from external pressures. Importers may see steadier conditions if services-driven consumer activity holds, but global headwinds, from tariffs to shifting sourcing strategies, will continue.

For logistics providers, the picture is mixed: growth in some verticals offsets decline in others, but rising operating costs and skills shortages are eroding margins. Many firms are delaying expansion or fleet upgrades until greater economic clarity emerges.

The Bank of England cut rates to 4% in August but has since signalled a pause on further easing. Inflation, still close to 4%, and slowing wage growth leave policymakers cautious. 

For SMEs in logistics and manufacturing, elevated borrowing costs remain a major obstacle. Access to affordable credit is restricted, curbing investment in new vehicles, facilities, and technology. Nearly one-third of smaller operators report scaling back operations due to finance constraints.

Retailers and importers, heavily reliant on efficient logistics, are indirectly affected. Higher financing costs across the supply chain can reduce investment in capacity and innovation, tightening the system at a time when resilience is most needed.

Logistics as an Economic Anchor

Despite these challenges, the logistics industry continues to prove its value. Contributing over £170 billion to the economy in 2024 and employing more than 8% of the workforce, logistics underpins every sector that manufacturers, retailers, importers, and exporters depend on.

Occupier demand for prime logistics space remains steady, investment volumes are expected to rise in the second half of the year, and long-term fundamentals are strong. Yet the market is shifting. New warehouse completions and a rise in secondhand stock are pushing up vacancy rates, softening rents, and increasing incentives for occupiers, which may present opportunities to secure favourable terms in a cooling market.

Conclusion: Caution and Opportunity

July’s GDP stagnation is not a crisis, but a signal that the economy is balancing precariously. Manufacturers face declining output, retailers and construction are holding the line, and importers and exporters must manage supply chains against a backdrop of tariffs, weak trade flows, and limited finance.

Logistics sits at the centre of this crossroads. The sector is challenged, but it also offers opportunities—from property leverage to supply chain optimisation—for businesses that act decisively. For shippers, the message is clear: staying agile, building resilience, and forging strong logistics partnerships will be critical to navigating the months ahead.

With growth flat and costs elevated, every decision on sourcing, inventory, capacity and space matters. Metro combines market monitoring with cost modelling, contract strategy and logistics optimisation to help you seize opportunities and protect margins.

EMAIL Laurence Burford, CFO, for expert guidance on risk management and supply chain resilience.

EU UK negotiations

Resetting UK–EU trade

Sep 17, 2025 | , , , , , , , , , , , , , , , ,

Five years on from the Trade and Cooperation Agreement (TCA) and with the 2026 review fast approaching, the UK and EU have a chance to move beyond firefighting and design a trading relationship that works in today’s economy.

A new Parliamentary report from the Chartered Institute of Export & International Trade sets out a practical roadmap to turn trade friction into advantage, by prioritising digital connectivity, trusted cooperation and real-world fixes for businesses, especially SMEs.

Exports in services have grown, but goods trade, and particularly for smaller exporters, still hits too many barriers. The Institute proposes a coherent package of measures that reduces cost and complexity at the border, unlocks mobility and skills, and aligns climate and industrial policies so supply chains can invest with confidence.

h4b>The Institute’s eight recommendations

1) Streamline borders and customs

  • Build interoperable UK–EU digital trade corridors to remove duplication and delays.
  • Create a Common Security Zone to simplify newer safety and security requirements.
  • Align the UK’s Trade Strategy with the EU Customs Reform programme to deliver a seamless user experience.

2) Make SPS trade predictable

  • Implement the Common Sanitary and Phytosanitary (SPS) Area via a joint SPS committee (as trailed at the 2025 summit).
  • Work directly with industry to fix recurring pain points in food, plant and animal movements.

3) Modernise rules of origin

  • Simplify and harmonise product-specific rules in the TCA.
  • Enable diagonal cumulation with shared FTA partners.
  • Consider UK participation in the Pan-Euro-Mediterranean (PEM) Convention to increase sourcing flexibility.

4) Deepen regulatory cooperation

  • Use outcome-based equivalence and dynamic alignment where it matters most.
  • Strike targeted “side deals”, including mutual recognition for conformity assessment, and collaborate on emerging areas such as AI and digital trade.

5) Link carbon and energy frameworks

  • Link UK and EU emissions trading schemes and align CBAM approaches.
  • Broaden energy cooperation to support secure, affordable decarbonisation.

6) Back Northern Ireland’s dual-market role

  • Build on the Windsor Framework to deepen trade, energy and mobility links.
  • Position Northern Ireland as a practical model of friction-reduction that benefits both sides.

7) Enable skills and mobility

  • Launch a reciprocal youth mobility scheme and explore re-entry to Erasmus+.
  • Accelerate mutual recognition of professional qualifications in high-impact sectors.

8) Align industrial and digital policy

  • Establish a UK–EU Industrial Cooperation Council to coordinate investment, innovation and regulation.
  • Add a dedicated digital trade chapter to future-proof the partnership.

The last five years have shown that technical workarounds are not enough. SMEs need consistent rules, fewer duplicative checks and clearer pathways. By sequencing border simplification, SPS certainty and origin reform, policymakers can cut costs quickly while building a platform for long-term competitiveness.

What success would look like

  • Lower cost-to-export for SMEs through simplified formalities and interoperable systems.
  • Faster, more predictable food flows via an SPS framework that solves problems at source.
  • More resilient supply chains thanks to compatible rules and modernised origin provisions.
  • A digital-ready TCA that reflects how firms actually trade in 2026 and beyond.

From rules-of-origin compliance to fast-changing customs requirements, our experts deliver integrated and automated solutions that simplify compliance, cut costs and keep your trade moving.

To learn about our automated CuDoS platform and how we can help you navigate the evolving UK–EU trade environment with confidence, please EMAIL our Managing Director Andrew Smith today.

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Asia Pacific Freight Markets Reshape as Tariffs Shift Trade Flows

Sep 3, 2025 | , , , , , , , , , , , , , , , , ,

Air and sea freight in the Asia Pacific region is at the centre of global freight realignments, as eCommerce and feeder shipping operations are reshaped by recent policy changes in the US. 

Adjustments to tariff rules and the elimination of duty exemptions have pushed shippers to reconsider sourcing strategies, shifting some flows from China to other Asia Pacific markets while amplifying pressure on already-congested sea and air networks.

Air cargo: eCommerce realignment

The removal of de minimis exemptions on China–US eCommerce shipments has sharply reduced volumes from mainland China and Hong Kong to the US, while boosting flows from alternative Asia Pacific origins and into Europe.

Airlines across the region reported strong growth in July, as exporters diverted shipments to avoid tariff penalties and took advantage of front-loading opportunities during temporary pauses in tariff implementation.

This shift highlights the growing role of Asia Pacific beyond China in meeting US and European demand, with trade lanes from Southeast Asia and emerging eCommerce hubs gaining traction. While China remains dominant in cross-border online trade, its reduced share of US-bound volumes has accelerated diversification across the region.

Sea freight: Feeder bottlenecks

At the same time, feeder shortages in Southeast Asia are disrupting supply chains, delaying transshipments and creating congestion at major hubs including Singapore (operating near 90% yard capacity), Shanghai, Ningbo and Port Klang.

Shippers are being forced to secure space weeks in advance, with rolled cargo and high yard density compounding the disruption.

The surge in demand from Southeast Asia, partly driven by tariff-related cargo diversions, has stretched feeder capacity, with carriers prioritising direct lanes over transshipment-heavy routings. For US exporters, this has meant greater scrutiny over which cargoes are accepted, adding uncertainty to already fragile trade flows.

Implications for US and European businesses

For US and European importers, these developments underline the risks of over-reliance on single-source markets, as both regulatory shifts and operational pressures can disrupt established flows. For exporters, feeder constraints and selective carrier acceptance policies may limit market access and slow supply chains out of Asia.

Diversification of sourcing, earlier booking strategies, and closer collaboration with supply chain stakeholders is essential in navigating these disruptions. With eCommerce volumes continuing to grow and Asia Pacific playing a more pivotal role, freight strategies must evolve to maintain resilience and competitiveness.

Metro gives you the visibility, agility, and expertise to adapt to shifting trade flows and capacity constraints. EMAIL managing director, Andy Smith, today to strengthen your supply chain and secure your freight movements across Asia Pacific, the US and Europe.

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Gold’s Record Surge Amid Falling Dollar: A Global Signal for Trade and Transport

Sep 3, 2025 | , , , , ,

On the 2nd September Gold surged past $3,500 per troy ounce, setting a historic high that resonates beyond financial markets. While often seen as a safe-haven asset, this dramatic rise reflects deep global economic shifts, alongside the depreciation of the US dollar, which underpins much of international trade and commodity pricing.

For supply chains and global logistics, the gold surge is both a symptom and a signal of changing risks and market dynamics.

What’s Driving the Surge?

The US dollar has weakened significantly in 2025 due to a mix of monetary policy easing, geopolitical uncertainty, and controversial tariff policies. As the dominant currency for fuel purchases and trade contracts, the dollar’s decline impacts prices and costs widely. This weakening makes gold cheaper for holders of other currencies, spurring demand and driving gold prices higher.

Geopolitical Tensions and Trade Policies
Ongoing geopolitical conflicts and rising protectionist measures, including tariffs and trade disputes, heighten uncertainty. These factors disrupt supply chains and drive investors and central banks to increase gold reserves as a hedge.

Central Bank Accumulation
Emerging market central banks are aggressively diversifying reserves away from the US dollar towards gold and other currencies to reduce vulnerability to dollar volatility, tightening gold supply and further weakening the dollar.

As the dollar falls, commodities priced in dollars – including oil, gas, and bunker fuel – often rise in dollar terms. This dynamic raises costs for importers and exporters outside the US, despite relative currency strength.

Implications for Trade and Logistics

The dual pressures of currency volatility and geopolitical tension make traditional trade routes and cost forecasts unreliable. Shippers face higher insurance costs, regulatory compliance burdens, and risks of disruption.

The interaction between rising commodity prices and a falling dollar means that importers in Europe and the UK may see costs rise despite their currencies strengthening against the dollar, due to sticky contracts and global market adjustments.

Building resilience is critical. Flexibility in routing, diverse supplier networks, and dynamic contract currency management become essential. Data-driven forecasting and financial hedging strategies can help mitigate currency and commodity price risks.

Strategic Takeaway

Gold’s record-breaking rise amid the US dollar’s fall is more than a financial milestone, it is a barometer of systemic economic stress and changing global monetary dynamics. 

For global trade and logistics leaders, this signals the need to:

  • Monitor geopolitical, economic, and currency developments closely.
  • Invest in supply chain resilience against cost inflation driven by commodity and currency fluctuations.
  • Adapt contracts and sourcing strategies to manage exposure to dollar volatility.
  • Embrace flexible operations and agile financial management to navigate an increasingly volatile global trade environment.

In 2025, the intertwined rise of gold and fall of the dollar underscore a new era where resilience and adaptability in supply chains and trade finance are not optional, but essential.

Effectively overcoming the complexities of currency fluctuations, commodity price volatility, and geopolitical risks demands timely insights and expert guidance. Metro continuously monitors global markets, interest rate movements, currency shifts, evolving trade regulations, and supply chain disruptions to help you de-risk operations and unlock strategic opportunities.

Make confident, informed decisions with Metro’s dedicated support. EMAIL Laurence Burford, Chief Financial Officer, for tailored advice on trade insights, risk management, and optimising your supply chain resilience.

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