Fashion
BCC sees modest 2025 uplift but flags weak UK growth beyond
The last month’s budget is unlikely to kickstart economic growth, with the first major post-budget forecast from a leading business body pointing to a subdued outlook. The growth prospects remain modest despite a marginal upward revision for 2025, BCC said in its latest economic forecast.
UK GDP growth for 2025 is forecast to edge up to 1.4 per cent, driven by public spending, according to the British Chambers of Commerce.
Last month’s Budget is unlikely to revive the economy.
Growth in 2026 and 2027 remains subdued, with weak business investment, slowing exports, and rising unemployment.
Inflation is easing, but only modest interest rate cuts are expected.
In 2026, manufacturing growth is forecast at 0.9 per cent, and by 2027, growth is projected to improve to 1.8 per cent in manufacturing.
Business investment is expected to weaken sharply next year. After an estimated rise of 3 per cent in 2025, investment growth is forecast to slow to just 0.9 per cent in 2026, before recovering modestly to 1.5 per cent in 2027. The BCC attributed the weakness to sustained cost pressures on firms and the absence of direct growth-boosting measures in the budget.
Exports are forecast to rise by 1.8 per cent in 2026 and 2.4 per cent in 2027, sharply lower than earlier expectations of 3.3 per cent and 3.2 per cent. Imports are projected to grow by 3.8 per cent this year, before easing to 1.4 per cent in 2026 and then rising to 2.8 per cent in 2027.
Inflation is forecast to continue easing, with consumer price inflation expected to fall to 2.1 per cent by the end of 2026 and reach the Bank of England’s 2 per cent target by the fourth quarter of 2027. Average earnings growth is also expected to cool, from 4.3 per cent by the end of this year to 3.8 per cent in 2026 and 3.5 per cent in 2027.
With inflation easing but growth remaining weak, interest rate cuts are expected to be limited. The BCC forecast sees the policy rate at 3.75 per cent by the end of this year, falling only slightly to 3.5 per cent by December 2026.
Unemployment is projected to rise further, reaching 5.1 per cent in 2026 as labour market conditions loosen and firms rein in hiring amid cost pressures and sluggish productivity. The rate is then expected to ease to 4.8 per cent in 2027.
“Our forecast suggests last month’s Budget is unlikely to be a growth game-changer for the UK economy,” said David Bharier, head of research at the BCC. “The outlook for SMEs in 2026 will continue to be challenging with business investment and export growth struggling. Inflationary pressures, specifically from rising labour and energy costs, are likely to persist, meaning only modest cuts in the interest rate. Unemployment will be a key indicator to track as labour costs rise and automation costs ease.”
“Taken together the forecast paints a picture of an economy remaining stuck in low gear. Businesses are showing remarkable resilience and innovation, but many are weighed down by political uncertainty and the cumulative cost pressures,” added Bharier. “Delivery on growth is now key—the government has published industrial, trade, and infrastructure strategies, and these must translate into action. The UK is trapped in a low growth cycle, with consequences for both the fiscal and political landscape. Maximising the AI roll-out and global trading opportunities could help break the deadlock.”
“Businesses will be steering through choppy waters once again next year after a Budget that lacked the growth measures so desperately needed,” said Vicky Pryce, chair of the BCC economic advisory council. “Getting inflation back down towards the Bank’s 2 per cent target is good news, but that masks the continuing cost pressures for businesses. Significant interest rate cuts, that would make a huge difference to businesses and households, are not guaranteed next year by any means.
“Rising unemployment will be a key part of the economic landscape next year, pushing down consumer spending and presenting further challenges for firms of all sizes,” added Pryce.
Fibre2Fashion News Desk (SG)
With sustainability benchmarks rising, companies are rethinking how they produce and deliver, pivoting toward greener, more circular models that reduce waste, emissions, and resource use.
The stakes are high. In 2025, Vietnam’s exports to the EU reportedly reached $56.2 billion, up 10.1 per cent year on year, underscoring how pivotal Europe is for the country’s manufacturing base.
Vietnam’s textile and footwear exporters are accelerating sustainability efforts as stricter EU regulations reshape market access requirements.
Rising compliance pressure from measures such as CBAM and ESPR is pushing manufacturers toward circular production, cleaner technologies and greater supply-chain transparency, though limited green finance remains a major challenge for smaller firms.
The EU market, nevertheless, comes with its own challenges as access to this market increasingly depends on meeting strict environmental and product-design requirements.
The EU is rolling out an ambitious sustainability agenda, including the Carbon Border Adjustment Mechanism (CBAM) and the Ecodesign for Sustainable Products Regulation (ESPR). Together, these measures are changing what global suppliers must document, design, and decarbonise.
ESPR shifts expectations toward durability, repairability, and recyclability, while pushing manufacturers to reduce products’ overall environmental footprint. Supply chains are also expected to become more transparent through Digital Product Passports, and practices such as destroying unsold goods being phased out gradually.
For Vietnam’s exporters, compliance is becoming a baseline requirement to keep EU orders and remain competitive.
Recognising this, both the Government and industry players are stepping up. Vietnam’s long-term development strategy for textiles and footwear, which stretches to 2030 with a vision toward 2035, places sustainability at its core. The plan charts a path toward efficient, environmentally responsible growth anchored in a circular economy, where materials are reused, waste is minimised, and production cycles are closed rather than linear.
Crucially, it also provides a legal backbone to help businesses align with global sustainability trends.
On the ground, change is already underway. Textile and apparel manufacturers are investing in renewable energy, upgrading machinery, and fine-tuning production processes to cut emissions and resource use. These shifts are not just about compliance; they are about future-proofing operations in a market where green credentials increasingly determine who wins contracts.
However, the transition has not been entirely seamless. A key barrier seems to be access to green finance, especially for small and medium-sized enterprises. Large firms can more readily fund clean technologies and certification, while smaller suppliers often struggle to fund the shift, risking exclusion from high-value export markets if they cannot keep pace.
There is also a growing recognition that policy support needs to go further. As Vietnam leans into a circular economy, industry voices are calling for a more cohesive and comprehensive framework, one that not only sets clear standards for circular products but also actively incentivises recycling, cleaner production, and sustainable innovation.
Without this, progress risks being uneven, with smaller firms left behind.
Momentum is, nevertheless, building as manufacturers and policymakers push for better-aligned standards and support mechanisms. The goal is to narrow the gap between sustainability ambition and day-to-day implementation across the sector.
The aim is clear: create an ecosystem where businesses of all sizes can invest in circular solutions, strengthen their export capabilities, and meet the EU’s exacting standards head-on.
Fibre2Fashion News Desk (DR)
The increase was driven primarily by higher reinvested earnings and intra-company loans, indicating continued engagement by existing investors with Bangladesh.
Reinvested earnings rose by 318.25 per cent, from $103.79 million in 2024 to $434.10 million in 2025, while intra-company loans increased by 25.68 per cent, from $621.96 million to $781.68 million.
Bangladesh’s net FDI inflows increased by 39.36 per cent last year to $1,770.42 million compared with $1,270.39 million in 2024, the Bangladesh Bank said.
The increase was driven primarily by higher reinvested earnings and intra-company loans.
Reinvested earnings rose by 318.25 per cent, from $103.79 million in 2024 to $434.10 million in 2025, while intra-company loans rose by 25.68 per cent.
Equity capital remained broadly stable, rising by 1.84 per cent, from $544.64 million to $554.64 million in 2025, a release from Bangladesh Investment Development Authority said.
Greenfield project announcements declined by 16 per cent in 2025.
Fibre2Fashion News Desk (DS)
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