Wages and GDP to see boost as UK and Gulf strike historic multi-billion-pound trade deal

• Deal could boost the UK economy by an estimated £3.7 billion every year and increase wages by £1.9 billion annually in the long run.

• UK becomes the first G7 country to agree trade deal with the GCC, bolstering our partnership with a strategically vital region and securing economic resilience at home.

• Deal removes tariffs on food exports, medical equipment and advanced manufacturing, plus first-of-its-kind GCC commitments on free flow of data.

The UK could see a boost to growth and higher wages for decades to come after becoming the first G7 country to secure a trade deal with the Gulf Cooperation Council (GCC) today - strengthening our economic partnership with the region, supporting jobs in the long term, and bolstering domestic resilience.

The announcement reflects the UK's solidarity and long-term cooperation with its Gulf partners – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE - and our shared commitment to open trade, mutual prosperity, and long-term economic success.
This will remove an estimated £580m in duties a year, based on current UK exports to the GCC, once the agreement is fully implemented, with £360 million worth of this to be removed on day one of the agreement entering into force - as well as renewed certainty for services firms, making it easier for UK companies to expand and partner in the Gulf, and supporting high quality jobs for years to come.

Many sectors including the food and drink sector are set to benefit from the deal once it enters into force. UK exports of cereals, cheddar cheese, chocolate and butter are just a few of the goods expected to become tariff-free, supporting British industry to grow.

Today's agreement marks a fifth agreement following major deals with India, the US, the EU and South Korea, as this Government continues to deliver the certainty and stability that businesses need to grow in tough times.

Prime Minister Keir Starmer said:

“Today's agreement is a huge win for British business, and for working people who will feel the benefits in the years ahead through higher wages and more opportunities.

"This government has now secured five major trade deals with international partners, delivering on our commitment to drive growth, support jobs and strengthen the UK economy.

"The Gulf states are valued economic partners and this agreement deepens that relationship, building trust and unlocking new possibilities for trade and investment."

The deal is estimated to add £3.7 billion to the UK economy every year in the long run when compared to 2040 projections and £1.9 billion in real wages, delivering for businesses and working people.

Environment Secretary Emma Reynolds said:

“This is a landmark deal for British food and farming. From Welsh lamb and Scottish salmon to English cheddar, our world-class produce will now reach Gulf markets tariff-free, creating major new opportunities for UK farmers and food businesses.

“This government has secured a deal that backs British farmers while protecting our high food, animal welfare, and environmental standards. Simply put, we are boosting exports, supporting rural jobs and driving economic growth.”

Business and Trade Secretary Peter Kyle said:

“I’m proud that the UK is the first G7 country to secure a modern and ambitious trade deal with the GCC – an important and growing set of markets.

“For this Government to meet the challenges that our country faces, incremental change won't cut it. That’s why major trade deals like this one, and that we secured with India, the US, South Korea and the EU, are vital for moving the dial towards long-term, sustainable economic growth with benefits people and businesses can see and feel.

“At a time of increased instability, today’s announcement sends a clear signal of confidence - giving UK exporters the certainty they need to plan ahead and reinforcing the strength and stability of the UK's trading relationship with the Gulf at a critical moment.”

The UK autos industry alongside high street names like Holland & Barrett stand to gain significantly from the deal, through tariff reductions, stronger Intellectual Property protections and simplified customs processes. By reducing the burdens that create barriers to trade, it will give UK businesses a competitive edge.

Anthony Houghton, Group Chief Executive Officer of Holland & Barrett, said:

"We welcome this landmark agreement, which deepens economic ties between our markets. The Gulf is strategically important for us, as we continue our growth journey and expand our international presence.

“Fair, reliable and low-barrier trading is essential for businesses to compete and expand internationally with confidence. This agreement provides that stability, supporting companies like ours to grow and serve customers across the region."

Chancellor of the Exchequer Rachel Reeves said: 

  “This agreement is good for jobs, good for industry and ultimately good for consumers, opening up a world of economic opportunity with a strategically important region.

“Our fifth trade deal since taking office, it’s proof we are backing British firms to compete and win globally, delivering growth, security and jobs, and that we have the right economic plan.”
UK services - which account for around 80% of the British economy and over half of the UK exports to GCC – will gain guaranteed market access under this deal.

In 2024, there were over 400,000 business visits made from the UK to the Middle East so this deal will help British professionals including lawyers, engineers and consultants to travel more easily and stay longer in the region.

Anna Anthony, EY UK Regional Managing Partner, said:

"The UK exported more than £20 billion in services to GCC countries last year, and this agreement should create even greater opportunities for UK professional services businesses in these high-growth markets.

“The agreement’s visa transparency and digital trade provisions will make it easier for UK professionals to deliver in-person and cross-border services, providing businesses with the clarity and confidence to compete in these markets.”

Delivering on key business asks, the deal will:

• eliminate duties worth an estimated £580 million a year on UK goods exported to the GCC based on existing trade once fully implemented, giving consumers access to high-quality UK products.

• remove an estimated £360 million duties on day one of the agreement entering into force, reducing costs for UK businesses and supporting supply chains.

• create opportunities for companies producing iconic UK products – from butter and cheddar cheese to biscuits and chocolate - as the GCC imports over 80% of its food.

• include the most ambitious commitments on customs procedures the GCC has ever signed up to, with customs cleared within 48 hours and shipments including perishable goods released in under 6 hours once all requirements are met.

• lock in clarity and certainty for our services exporters, cementing their access to key markets.

• cut red tape for business mobility, ensuring visa processes are fair, efficient, easier to navigate and increasingly digital.

• enable UK companies to store and process data outside the region for the first time ever, which will save businesses money on setting up costly data centres in the Gulf.

• unleash the power of international investment and ensure investments disputes are resolved fairly and transparently. Total bilateral investment was £18 billion in 2024 and supports critical infrastructure projects like Heathrow Airport.

• align with the UK's Industrial Strategy, supporting key high-growth sectors, including advanced manufacturing, clean energy, and digital technologies.

This agreement, which could increase bilateral trade by 19.8%, is the latest in a series of major international deals the UK has struck with partners around the world to support businesses to export and grow, boost jobs and increase wages.

When combined with the India trade deal, the agreements are expected to add over £8 billion a year to UK GDP when compared to 2040 projections.