Trade in focus

Economic Week In Review | Issue 487 | 7 July 2025

UK construction and property

  • Construction administrations in the first six months of the year have reached 150, slightly higher than the same period last year. However, June’s total is 10% lower than June 2024. Weak activity, driven by high interest rates and a slow planning system, has offset bright spots in commercial development and support for the energy transition.
  • Construction fatalities | Data from the Health and Safety Executive show the construction industry accounted for 28% of the 124 workplace fatalities from April 2024 to March 2025. However, fatalities have fallen annually from 51 to 35, the lowest total recorded since 2021-22.
  • New orders | The latest S&P Global UK Construction Purchasing Managers’ Index found that new orders fell in June for the sixth successive month. Respondents cited fewer tender opportunities and intense competition for new work. However, they pointed to some reassurance from the government announcing its long-term investment plans. Commercial work fell at the fastest pace since May 2020, which contractors blamed on “subdued UK economic conditions and cutbacks to investment spending among clients.”
  • Energy projects | Ofgem has approved an initial five-year, £24 billion funding package to upgrade the UK’s gas and electricity infrastructure as part of the RIIO-3 price control period from 2026 to 2031. It includes funding for 80 electricity transmission projects, connecting clean energy capacity.
  • Social home building | The Deputy Prime Minister announced a £39 billion plan to build 300,000 homes, with at least 60% available for social rent. This would be six times greater than the number of social homes built in the last decade.

Global economy

  • Annual inflation in Europe edged back up to 2% in June, marking the first rise seen since January. Core inflation remained steady at 2.3% annually and rose 0.4% on the month. Services inflation—a key focus for the ECB—rose to 3.3% in June from 3.2% in May and jumped by 0.7% month-on-month, suggesting lingering demand-driven dynamics as the summer begins.
  • Smelter issues | Across the world, smelters are warning that high electricity prices and access to power are limiting expansion plans and any aspirations of on-shoring production from China. Aluminium producer Norsk Hydro has said that in the US, smelters are battling for electricity contracts with technology firms that are willing to pay higher fees.

UK economy

  • Growth | Britain’s economy expanded at its fastest pace in a year as GDP increased by 0.7% in the first three months of 2025, buoyed by home buyers and a pre-tariff rush. From January to March, household expenditure increased by 0.4%. Manufacturing grew by 1.1% in Q1 compared to the last three months of 2024. The increase seen in early 2025 is not expected to last into the rest of the year.
  • UK-US trade agreement | The UK-US trade deal came into force last week, lowering US tariffs on the UK’s automotive and aerospace sectors. UK car manufacturers can now export 100,000 vehicles to the US under a reduced 10% tariff quota. The UK’s aerospace sector also gains a major boost, with 10% tariffs on goods like engines and aircraft parts removed, with a commitment to maintain them at 0%. In return, the UK will scrap tariffs on beef and US ethanol imports – a move that the British bioethanol industry says will make it impossible for it to compete. However, UK steel and aluminium remain subject to a 25% tariff, which could double to 50% if the UK and US do not reach a deal by deadline day on the 9th of July. Negotiations over steel have been difficult due to the US’s “melt and pour” rule, which means that a product is only considered to be from the UK if it is melted and poured in the UK, which is not the case for many semi-finished products.

Materials, commodities and currencies

  • US dollar | The US dollar has had its worst half-year in more than 50 years, falling by almost 11% against a basket of currencies as the financial markets have been dominated by geopolitical crises and Donald Trump’s trade war. It is its worst performance over the first six months of any year since 1973 and the worst half-year since the second half of 1991.
  • Brick deliveries increased by nearly a quarter in May 2025 compared with a year earlier but remain far below levels seen in the years before 2023 (when the housing market slowed down following the Liz Truss government’s mini-Budget). Concrete block deliveries were down by 0.3% in May 2025 compared with May 2024.
  • Anti-dumping duties | China will extend its anti-dumping duties on some stainless-steel products from certain countries and regions for another five years in a bid to protect domestic manufacturers. Imports of stainless-steel billet and hot-rolled stainless steel originating from the EU, UK, South Korea, and Indonesia will remain subject to the anti-dumping duties ranging from 20.2% to 103.1%, according to China’s commerce ministry.
  • Copper prices have increased, almost to the highest level this year, as supplies have fallen after a continued push to move metal to the US ahead of any possible tariffs. Stores in London are at their lowest since 2023.

Environment

  • EU Climate Law | The EU Commission proposed an amendment to the EU Climate Law, setting a 2040 EU target of a 90% reduction in net greenhouse gas emissions compared to 1990 levels. The proposed 2040 climate target takes into account the current economic, security, and geopolitical landscape. The proposed change is believed to provide more certainty to investors and innovation, strengthen the industrial leadership of EU businesses, and increase Europe’s energy security.
  • Solar panel balconies | UK ministers are considering proposals to install “plug-in” “balcony solar panels,” which are already found on balconies across Spain and Germany. With no installation required and an expectation that they could save 30% on energy bills, they could pay for themselves within six years.

Friday to Friday

Price / Index Week %
change		 Annual %
change
FTSE 100 8,822.91 0.27 7.54
FTSE 250 21,557.34 -0.73 3.71
Nikkei 39,810.88 -0.85 -2.69
CSI 300 3,982.20 1.54 16.06
S&P 500 6,279.35 1.72 12.79
Nasdaq 20,601.10 1.62 12.25
CAC 40 7,696.27 0.06 0.27
Dax 23,787.45 -1.02 28.75
$ per £ 1.3645 -0.54 6.54
€ per £ 1.1583 -1.01 -2.07
Gold £/oz 2,446.33 2.50 31.06
Brent Oil $/barrel 68.80 2.99 -20.50

Weekly Summary

This week sees the end of the 90-day pause in the US reciprocal tariffs, which could lead to a return of some volatility and confusion, as the President still says that they are “close to several deals.” With the situation likely to be in flux over the next few weeks, we will continue to monitor the changes.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst
Kishan Patel
Kishan Patel,
Research Analyst

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