In addition to the US deal, the UK successfully secured a free-trade agreement with India, its largest such deal since the Brexit vote, which is expected to contribute £4.8 billion annually to the UK economy by 2040.

Bailey's comments about the need for a more open economy for trade with the EU come amid the backdrop of the recent UK-US trade agreement, raising questions about its broader economic implications.

Meanwhile, discussions between US and Chinese officials are set for the weekend, potentially marking a first step towards resolving ongoing trade tensions.

Following the announcement of the US-UK trade deal, the FTSE 100 index rose by 0.4%, gaining 32 points to reach 8564, reflecting increased investor confidence and positive sentiment in sectors like retail and pharmaceuticals.

Despite concerns regarding US influence over Chinese investments in the UK, Treasury minister Darren Jones dismissed reports suggesting that the US would have a veto over such investments.

In contrast, the US-China trade relationship is showing signs of strain, with April exports from China to the US dropping 21%, the steepest decline in years, indicating the impact of US-imposed tariffs.

The Bank of England recently lowered interest rates to a two-year low of 4.25% in response to a slowdown in inflation and increased trade tensions, projecting slower global economic growth.

Under the new trade agreement with India, UK farmers will gain tariff-free access for 13,000 metric tonnes of beef, enhancing agricultural trade between the two nations.

On May 8, 2025, US President Donald Trump announced a 'breakthrough' trade agreement with the UK, marking a significant achievement for Prime Minister Rishi Sunak and a result of Sir Keir Starmer's diplomatic efforts.

British Prime Minister Keir Starmer hailed the agreement as a 'historic day,' although he acknowledged that the deal lacks detailed terms and further negotiations are anticipated.

The trade deal eliminates several planned tariffs, including a reduction of US import taxes on British high-end cars from 27.5% to 10% and the removal of a 25% tariff on steel, while also granting greater access for US agricultural products to British markets.

As the UK Government negotiates its trade and security relationship with the EU, Bailey emphasized the importance of reversing the decline in UK-EU trade post-Brexit, describing it as beneficial for the UK economy.