The UK has signed a major trade agreement with the Gulf Cooperation Council (GCC), becoming the first G7 country to secure a trade deal with the bloc. The government says the agreement could add £3.7 billion to the UK economy every year in the long term and increase annual wages by £1.9 billion.

The GCC includes Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain, and Oman.

According to the UK government, the agreement will remove around £580 million in tariffs on UK exports each year once fully implemented, with £360 million of those tariffs removed immediately when the deal comes into force.

Food and drink exporters are expected to benefit significantly. Products including cereals, cheddar cheese, butter, and chocolate are set to become tariff-free, opening up greater access to Gulf markets.

The deal also places a strong focus on services and digital trade. UK services exports to the GCC were worth more than £17 billion last year, and the agreement includes commitments aimed at improving market access and making it easier for professionals such as lawyers, engineers, and consultants to work across the region.

One of the most significant parts of the agreement is a new commitment allowing UK companies to store and process data outside the Gulf region for the first time. The government said this could reduce costs for firms that would otherwise need to build local data centres.

The agreement also includes faster customs processes, with goods expected to clear customs within 48 hours and perishable shipments released in under six hours once requirements are met.

Prime Minister Keir Starmer described the agreement as “a huge win for British business”, while Business and Trade Secretary Peter Kyle said the deal would provide greater certainty for exporters during a period of global instability.

The government said the agreement could increase trade between the UK and GCC by nearly 20%, further strengthening economic ties between the two regions.