German-British Business Outlook 2025

The decade since Brexit has been characterised by falling trade volumes and investments for German-British economic relations. Now companies are expecting sales and investments to rise again. This trend reversal is confirmed by the „German-British Business Outlook 2025“, which KPMG in Germany is compiling together with the British Chamber of Commerce in Germany (BCCG) for the seventh year in a row: 85 per cent of the German companies surveyed expect closer ties between the EU and the UK, while 40 per cent even anticipate „significantly closer“ cooperation.

Geopolitical tensions are driving this reassessment: The protectionist and unpredictable course of the USA as well as acute security threats in Europe and worldwide are increasingly focussing on German-British relations. The UK-EU Security and Defence Pact concluded in May 2025 and the UK-German Friendship Treaty of July 2025 are sending important signals to the economy – they are creating new trust in bilateral relations.

For 2025, almost every second company (48 per cent) expects revenues in the UK-German corridor to increase. The five-year outlook is even more positive: 72 per cent expect growth. At the same time, the proportion of pessimists has more than halved – only 11% now forecast long-term sales declines (2024: 26%).

The transforming sectors are particularly attractive - from advanced manufacturing and clean energy to digital technologies, life sciences, defense and security. 30% of respondents see concrete opportunities here (2024: 24%).

The fastest-growing area of cooperation is defense and security: it is now relevant for 43% of respondents - a direct consequence of the changed security situation in Europe and the recently concluded UK-EU security and defense pact. In the previous year, this figure was only 26%.

60 per cent want the British government to improve trade relations with the EU, 43 per cent want trade barriers to be dismantled. 55 per cent of companies want the German government to use the 2026 review of the EU-UK trade agreement to achieve economic relief. 43 per cent are also in favour of more intensive bilateral cooperation at a political and economic level.

New regulations have been gradually taking effect in the UK-German economic area since 2024, which were initially postponed after Brexit. For example, 32 per cent of companies feel particularly burdened by the introduction of the Electronic Travel Authorisation (ETA) in 2025.