Half of the UK’s businesses now say they have been impacted by the conflict in the Middle East, almost double the proportion who said they were affected in late October last year.
The main impacts cited by businesses are increased costs, shipping disruption and delays, and uncertainty on oil prices, and some firms report cancelling work in the Middle East because of the conflict.
The findings, from the BCC’s Insights Unit, also show a rise in impact since February 2024, when firms were asked specifically about Red Sea disruption, and two-fifths (37%) were affected.
Shipping container rates have fluctuated significantly since the current Middle East conflict began in October 2023. The cost of shipping a 40ft container from Shanghai to Rotterdam has risen from just over $1,000 then to just under $4,000 now, having peaked at over $8,000 in July.
William Bain, Head of Trade Policy at the BCC, said: “Alongside the grim human impact of the ongoing conflict in the Middle East, the situation continues to have economic reverberations around the world.
“The effect on businesses here in the UK has continued to ratchet up the longer the fighting has continued.
“If the current situation persists, then it becomes more likely that the cost pressures will build further.
“Certain sectors of the economy are obviously more exposed to this than others. But with the on-going war in Ukraine, wider geopolitical uncertainty, and the prospect of tariffs looming, the UK needs to think carefully about its trade strategy.
“We need to seek out new deals with like-minded nations on critical raw materials, components and minerals to ensure their supply. And we must lean more heavily into the digital trade revolution to reduce costs and make exporting and importing simpler.
“The use of economic diplomacy can also not be underestimated. The UK has a powerful brand and distinctive reputation around the world which we must harness to greater positive effect.
“Overseas trade is vital to growing our economy. We must do everything we can to see businesses through these tough times, and then set a laser-sharp focus on expanding exports for the future.”
