Supporting steel

Economic Week In Review | Issue 494 | 26 August 2025

UK construction and property

  • Infrastructure fast-track | A new Defra Group Infrastructure Board will accelerate the planning process for major infrastructure projects such as Hinkley Point C, East West Rail, and Heathrow. More than 50 major infrastructure projects would benefit immediately, rising to 150 by the end of the decade. The board is backed by £500 million in funding.
  • Insolvencies | Figures from the Insolvency Service revealed that 3,984 construction firms went under in the 12 months to June, accounting for 17% of all business failures, the highest total among all industries.
  • Construction starts | Glenigan’s latest data shows that from May to July, project starts fell by 20% compared with the previous three months, while main contract awards dropped by 26%, mostly due to a fall in large project starts worth over £100 million. Starts on projects worth less than £100 million grew moderately in the three months, but sectors including industrial, offices, and residential still saw declines. Most regions saw a decrease in project starts, with Yorkshire and the Humber experiencing the sharpest decrease.
  • Project ratings | Data from the first annual report from the National Infrastructure and Service Transformation Authority (NISTA) showed that sector projects worth £88.8 billion were rated red, meaning “successful delivery of the project appears to be unachievable.” Just £7.6 billion worth of projects are rated green, meaning successful delivery of the project on time, within budget, and of high quality. The £88.8 billion represents eleven construction projects classified as red, while ten projects are rated green.
  • Apprentices | Research from HR consultant Apprenticeship Central Ltd shows that almost half of construction’s apprentices are over 25 years old and are a mix of new joiners and tradespeople wanting to formalize their skills.

Global economy

  • Tariffs | The US and the EU have released additional details on their major trade agreement, which was agreed upon in July. The US will keep its 15% tariff on the bloc, with the EU expected to introduce legislation to eliminate its tariffs on all industrial goods coming from the US, as well as agricultural products. The statement said this would be done before automobile imports see a lower tariff rate. EU pharmaceutical industries will see tariffs capped at up to 15%, despite threatened tariffs as high as 250% in recent weeks.
  • Global post | Due to the high level of uncertainty, postal services in Europe have suspended parcel shipments to America. Parcels valued at less than $800 were previously tax-exempt but now face a 15% tariff.
  • French politics | France’s Prime Minister François Bayrou has called a confidence vote which could prompt the government to fail. Its previous Prime Minister, Michel Barnier, lasted just 90 days. The instability has unsettled French markets and investors. Bayrou said, “Yes, it’s a risk, but the supreme risk is doing nothing.”

UK economy

  • UK inflation | Prices rose by 3.8% in the year to July, a larger increase than expected. The jump was primarily driven by airfares and food prices. The Bank of England expects inflation to peak at 4% in September.
  • Government borrowing was lower than expected in July at £1.1 billion, £2.3 billion less than the same month last year, marking the lowest July figure for three years, helped by the rise in tax and national insurance receipts. However, borrowing over the first four months of the financial year has now reached £60 billion, which is up £6.7 billion from the same period last year.

Materials currencies and commodities

  • JCB has warned that US tariffs on steel and aluminium will cost it “hundreds of millions of pounds” and has urged the government to intervene. The recently expanded steel tariffs have worsened the impact, with JCB previously expecting a hit of around £2 million.
  • Section 232 tariffs | As of the 18th of August, the US has added 407 new steel/aluminium derivative products to the Section 232 tariff list. These products include wind turbines, mobile cranes, bulldozers and other heavy equipment. As a result, the steel and aluminium content of these products will be subject to a duty rate of 50%.
  • UK steel |The UK government has taken control of the UK’s third-largest steelworks as ministers try to protect 1,450 jobs after Liberty Steel’s operations in South Yorkshire were put into administration.

Environment

  • Extreme heat is becoming a major workplace hazard, with millions of workers globally exposed to heat stress. A report by the World Health Organisation found that for every one-degree temperature rise above 20°C, productivity falls by 2%. Construction and agricultural workers are particularly at risk, with European countries like Italy and Switzerland adapting rules to the changing climate. Last month Italy passed an emergency decree to halt work during peak heat hours.
  • Loss of nature costs | According to a report by the Green Finance Institute and the WWF, loss and degradation of nature in the UK could cut 5% off GDP within the decade and that soil degradation alone costs the UK economy £1.4 billion annually.

Friday to Friday

Price / Index Week %
change		 Annual %
change
FTSE 100 9,321.40 2.00 11.93
FTSE 250 22,077.23 1.47 4.19
Nikkei 42,633.29 -1.72 11.13
CSI 300 4,378.00 4.18 31.58
S&P 500 6,466.91 0.27 14.77
Nasdaq 21,496.54 -0.58 20.24
CAC 40 7,969.69 0.58 5.18
Dax 24,363.09 -0.06 30.75
$ per £ 1.3527 -0.26 2.52
€ per £ 1.1548 -0.33 -2.19
Gold £/oz 2,492.69 1.26 31.11
Brent Oil $/barrel 67.22 2.08 -14.93

Weekly Summary

The news this week that Liberty Steel’s Specialty Steel UK operations in South Yorkshire will be taken into government control, just a few months after British Steel’s Scunthorpe site saw the same fate, serves as a reminder of the pressures the UK’s steel industry faces beyond the threat of rising tariffs. Noting that the UK’s steel industry is a vital part of the UK’s sustainability ambitions and manufacturing base, the government launched its Steel Strategy engagement earlier this year, which could provide opportunity and support.

Author contact

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

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