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)
While rates initially jumped in early January, weak underlying demand and the potential return of vessels to the Suez Canal are creating a volatile environment for shippers, it noted.
Carriers pushed through general rate increases (GRIs) in early January this year, briefly lifting China-to-US West Coast rates above $3,000 per forty-foot equivalent unit (FEU). However, these hikes were largely unsustainable due to weak volumes, with rates quickly correcting to the $1,800-$2,200 range by mid-month, the logistics and supply chain market research firm said in an insights brief.
Asia’s ocean freight market is navigating short-term seasonal surges and long-term structural overcapacity, Ti said.
Asia’s air freight market is seeing a significant ‘post-peak’ correction following a record-breaking end to 2025.
Warehousing capacity in the Asia-Pacific is under severe strain in late January as manufacturing slows and labour shortages emerge ahead of the Lunar New Year.
Seasonal demand ahead of the Lunar New Year (starting mid-February 2026) has pushed North Europe rates to roughly $2,700 per FEU as of mid-January. This is a significant recovery from the October 2025 lows of $1,300 per FEU.
Despite a peak ahead of the holiday, Intra-Asia rates have begun to ‘cool’ in mid-January, settling at an average of $661 per 40-feet container as new services and capacity entered the market.
The Asian air freight market is witnessing a significant ‘post-peak’ correction following a record-breaking end to 2025. While rates have dropped sharply from their December highs, demand remains resilient in key high-tech sectors, and a ‘mini-peak’ is expected in late January ahead of the Lunar New Year.
Spot rates from major hubs like Hong Kong and Shanghai fell significantly in early January as year-end peak season demand evaporated.
Despite the rate correction, global air cargo tonnages jumped by 26 per cent in the first full week of January 2026 compared to the end-of-year slump, with the Asia-Pacific region seeing an 8 per cent year-on-year (YoY) increase in chargeable weight.
Volumes from Southeast Asia to the United States rose by 10 per cent YoY in early January, driven by importers continuing to diversify sourcing away from China.
Warehousing capacity in the Asia-Pacific is under severe strain in late January as manufacturing slows and labour shortages emerge ahead of the Lunar New Year.
India closed 2025 with 36.9 million sq ft of warehouse leasing (16-per cent YoY growth), a trend continuing into early 2026 with high demand in Delhi National Capital Region and Chennai.
After a period of oversupply, development pipelines are expected to drop by a third by 2027, making 2026 a critical ‘inflection point’ for occupiers to secure quality space before terms tighten again.
Fibre2Fashion (DS)
The goal, however, is challenging due to external pressures, including stricter technical barriers, reciprocal tariffs on goods exported to the United States, and the European Union’s Carbon Border Adjustment Mechanism (CBAM) for selected industrial products.
Therefore, major export industries in the country have started restructuring and adjusting strategies early in the year to seize market opportunities.
Following a record export value of $475 billion achieved in 2025—up by 17 per cent YoY—Vietnam aims at adding nearly $38 billion to the figure in 2026.
Major export industries in the country have begun restructuring and adjusting strategies early in the year to seize market opportunities.
The textile and garment sector, which earned $46 billion in 2025, has set a target of $50 billion in exports in 2026.
The textile and garment sector, which earned $46 billion in 2025, has set a target of $50 billion in exports in 2026.
The sector is focusing on strengthening domestic supply chains, raising localisation rates and making more effective use of free trade agreements (FTAs), Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), was cited as saying by a domestic media outlet.
Exports may grow by 15-16 per cent this year, driven by market expansion and a shift towards higher-value products, according to MB Securities’ Vietnam Outlook 2026 report.
Fibre2Fashion (DS)
The data showed that the decline was driven mainly by weaker domestic exports, with goods produced in the Netherlands down 8 per cent YoY. In contrast, re-exports to the US rose 3.9 per cent during the period. Exports to the US have fallen every month on a YoY basis since July, CBS said in a press release.
Trade flows were influenced by uncertainty around US import tariffs. In the first half of 2025, trade between the two countries continued to grow, possibly as companies advanced shipments ahead of announced tariff measures.
Goods exports from the Netherlands to the United States fell 4.7 per cent YoY to €27.5 billion (~$33 billion) in the first ten months of 2025, driven by an 8 per cent drop in domestic exports, according to CBS.
Re-exports rose 3.9 per cent, while tariff uncertainty weighed on trade.
Imports from the US increased 1.9 per cent to €48.1 billion (~$57.7 billion).
Meanwhile, imports from the United States rose 1.9 per cent YoY to €48.1 billion (~$57.7 billion) in the first ten months of 2025.
Fibre2Fashion News Desk (SG)
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