German-British Business Outlook

Spring 2025 – Executive Summary
 

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The German-British business community continues to be upbeat for their UK business activities, but global challenges and weaker economic growth are beginning to bite.
 

Currently, 47% of survey respondents view their UK operations as performing positively or very positively, 34% as stable, and 19% as negatively. These numbers paint a similar picture to the autumn of last year, suggesting that most companies continue to operate reasonably successfully in the UK. As a result, investment plans within the German-British business community have remained broadly unchanged, with one third aiming to expand their activities.

In contrast to the positive outlook for their own operations, the sentiment towards the overall development of the UK economy has continued to deteriorate compared to six and twelve months ago. Currently, only 10 % of firms (down from 21% in autumn 2024 and 34% in spring 2024) expect the UK economy to improve over the coming twelve months, with 48% expecting a sluggish performance (up from 33% in autumn 2024 and 19% in spring 2024).

As in past surveys, political uncertainty, administrative hurdles resulting from Brexit, the politics of the new US administration, as well as lack of demand (as a result of the weaker economic outlook) continue to be major challenges for doing business in the UK. However, in line with the slightly weaker economy, addressing skills shortages has become somewhat less challenging.

Unsurprisingly, the majority (63%) of companies, even those focused solely on the UK market, still expect to be negatively impacted by the current US trade policies, underlining the global interconnectedness of European trade relations.