BUSINESS NEWS


The pound was up 12% against the dollar since January at the start of this week


Global uncertainties give mixed signals for travel


Analysis: Industry hopes not aided by fall in disposable income, says Ian Taylor


The US bombing of Iran appeared poised to trigger a global crisis a week ago. Now the world looks different, but no less in turmoil, with contradictory implications for travel. Perhaps surprisingly, US and


Iranian actions appear to have been calibrated to limit the fallout. Extended airspace closures and travel warnings applied relatively briefly, although Israel’s war on Gaza continues. Oil and jet fuel prices briefly spiked but remained down year on year and fell back last week – oil by 8% and jet fuel by 7.4%. The sector could hope to get back to business as a result. Unfortunately,


48 3 JULY 2025


there is no guarantee war in the Middle East won’t return, with the International Institute for Strategic Studies warning: “Gulf states must plan for a prolonged period of uncertainty.” However, the focus of ‘crisis’ has


already moved on. UK MPs’ vote on government


welfare ‘reform’ on Tuesday will have impacts on business and household spending whatever the outcome. PM Keir Starmer’s climbdown on £3 billion in planned welfare cuts, on top of a £1.25 billion reversal on winter fuel payments, will add £4.25 billion to government spending since the June 11 Spending Review.


Tax rises in the autumn are now inevitable. The more costly reversal came after


Bank of England governor Andrew Bailey last week forecast a “significant decline” in UK wage growth, noting: “Employment growth is subdued and hiring intentions have softened.” UK households’ ‘real’ disposable


income, adjusted for inflation, fell 1% year on year in the three months to March, according to latest Office for National Statistics data, despite 0.7% growth in UK GDP in the same quarter.


Continued on page 46 travelweekly.co.uk


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