UK Trade Prospects Clouded by Uncertainty, BCC Reports Divergent Export Trends

Uncertainty Looms Over UK Trade in 2026

The United Kingdom's trade outlook for 2026 is marked by considerable uncertainty, according to recent reports from the British Chambers of Commerce (BCC). The business group's analysis points to a 'two-tier export economy' in 2025, characterized by a worrying decline in goods exports contrasted with robust growth in services exports. This divergence contributes to a broader forecast of subdued economic growth for the nation.

A Tale of Two Exports: Goods Decline, Services Surge

In 2025, the picture for UK exports was sharply divided. William Bain, Head of Trade Policy at the BCC, noted that the 'gap appears to be widening' in the UK's export performance.

• Goods Exports: The volume of UK goods exports experienced a 'deeply worrying' downward trend, slumping by 2.1% across the year. Sales of goods to the EU dropped by 1.8% year-on-year in December 2025, and to non-EU countries by 3.6%.
• Services Exports: In stark contrast, services exports demonstrated 'robust growth' and continued to 'surge,' now accounting for 58% of all UK overseas sales. The volume of services exports rose by 5.2% in 2025, driven by expansion in sectors such as travel, business advisory services, computing, and insurance. This growth has been aided by improved market access through new trade agreements, including one with South Korea.

Subdued Economic Outlook and Trade Forecasts for 2026

The BCC's economic forecast indicates that overall UK economic growth will remain subdued in 2026. The country's Gross Domestic Product (GDP) is expected to expand by 1.2% in 2026, a slight decrease from the 1.4% growth projected for 2025. The Office for Budget Responsibility (OBR) forecasts a significant cooling in export growth for 2026, predicting an increase of only 0.3%. The BCC itself projects slower UK trade growth, with exports expected to rise by 1.8% in 2026, a downgrade from a previous forecast of 3.3%. Imports are also projected to slow, with an expansion of 1.4% in 2026, down from 3.8% in 2025. Consequently, net trade is expected to continue contracting, with figures of -0.9% in both 2025 and 2026.

Factors Contributing to Uncertainty and Calls for Action

Several factors are contributing to this uncertain trade environment. These include ongoing geopolitical tensions, trade policy volatility, persistent cost pressures on businesses, and a perceived lack of direct growth measures in the recent Budget. David Bharier, Head of Research at the BCC, highlighted that the UK is 'trapped in a low growth cycle,' with challenging prospects for small- and medium-sized enterprises (SMEs) in 2026.

In response, the BCC urges the government to adopt a more proactive stance to stimulate growth. Key recommendations include focusing on lowering tariffs and non-tariff trade barriers, enhancing trade promotion efforts, and providing better support for businesses to access new markets.