British Luxury Market Booms to £81 Billion, Bolstering UK Economy
The British luxury industry has surged to an impressive valuation of £81 billion annually, becoming a pivotal contributor to the UK economy and supporting over 450,000 jobs, as highlighted in the recent ‘Luxury in the Making’ report by Walpole. This significant economic impact, accounting for 3.7 percent of the UK’s GDP, marks a 69 percent growth over the past five years, up to 2022, according to the comprehensive analysis conducted in collaboration with Frontier Economics.
Amidst various macroeconomic challenges, including Brexit, the global pandemic, and supply chain disruptions, the UK luxury sector has demonstrated remarkable resilience, with its exports expanding by 45 percent to £56 billion over the same period. The sector’s robust growth, averaging 11 percent per year, has also contributed significantly to the national treasury, generating £25.5 billion in tax revenues.
However, Walpole warns that this upward trajectory could face hurdles without essential tax reforms and updates to intellectual property legislation. The industry body envisions an even brighter future, projecting that the luxury sector could inject £125 billion into the economy annually by 2028, potentially surpassing the economic outputs of the life sciences and construction sectors.
To sustain and enhance this growth, Walpole advocates for extending the UK’s Geographical Indicator regime to non-food luxury crafts and revisiting the tax and regulatory framework to promote high-quality employment. Additionally, the organization emphasizes the missed opportunity in the Spring Budget to reintroduce VAT-free shopping for international visitors, a move that could further fuel growth and competitiveness.
The report underlines the significant contributions of the automotive, food and drink, and fashion sectors to the luxury industry’s expansion, showcasing the resilience and potential of British luxury to continue as a leading economic force amidst evolving challenges.
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