Russia sanctions-busting? Big questions remain over UK car exports

Published

1 year ago

April 26, 2024

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The extraordinary, unprecedented and largely unexplained flows of millions of pounds of British luxury cars into states neighbouring Russia continued in February, according to new official data.

Some £26m worth of British cars were exported to Azerbaijan in February, according to data from HM Revenue & Customs.

The numbers show that in the latest quarter this former Soviet state with developing economy status was the 17th biggest destination for UK cars, bigger than long-established export markets such as Ireland, Portugal and Qatar.

Azerbaijan’s ascent has coincided almost to the month with the imposition of sanctions on the export of cars to Russia.

British cars are banned from being sent into Russia, both as “dual use” goods, which could be repurposed as weapons, and, for any cars over the value of £42,000, under specific luxury goods restrictions.

However, even as UK car exports to Russia plummeted to zero, they have risen sharply to states neighbouring Russia, including Kazakhstan, Kyrgyzstan, Georgia and, most notably of all, Azerbaijan.

While it is impossible to prove where those shipments end up eventually, there is plentiful anecdotal evidence that these countries are being used as conduits to smuggle banned goods to Russia.

The latest HMRC data shows that in the three months to February, the average value of the cars being sent to Azerbaijan was over £115,000, making this small, relatively poor economy one of the most high-value luxury car markets in the world – alongside Switzerland, Luxembourg and Saudi Arabia.

The total value of UK car exports to Azerbaijan in the two years since the invasion of Ukraine and the imposition of sanctions is now £523m. That compares to £58m in the immediately preceding two years.

Britain’s motor lobby group, the Society of Motor Manufacturers and Traders (SMMT), has insisted that this 800% increase can be explained by domestic factors in the Azerbaijani economy – and is not connected with Russian sanctions.

An SMMT spokesperson said: “UK carmakers comply with all trade sanctions and would condemn any party putting that commitment at risk. Car exports from UK factories to Azerbaijan have grown since 2019 due to multiple factors, including significant new model launches, pent-up demand and a growing domestic appetite for UK luxury cars. Indeed, UN data shows that just two cars of any origin have been officially exported from Azerbaijan to Russia this year.

“We have never ruled out the possibility that third parties might exploit any vulnerabilities in the sanction regime, and manufacturers do everything in their power to prevent this. Any UK-built vehicle on sale in Russia found its way there without their authorisation. This is a fast-moving global issue covering products from multiple sectors in many countries deploying sanctions, and tackling any vulnerabilities requires a coordinated, global response.”

However, while United Nations (UN) data suggests the quantity of cars being officially exported to Russia remains low, that same evidence suggests that, far from behaving like a normal car market, Azerbaijan does seem to be funnelling cars off elsewhere into Central Asia.

Contrary to the SMMT’s analysis, which suggests the car exports can be explained by domestic factors, car exports from Azerbaijan have risen by 4,800% since the invasion of Russia, with most of the cars destined (according to UN data) for Kazakhstan, Kyrgyzstan, Georgia and the United Arab Emirates.

According to UK government sources, these states are understood to be widely used as conduits for goods into Russia.

Cars are not the only British goods to have seen a large spike in exports to Central Asia and the Caucasus – so too have components and machinery used to make weapons. In a visit to Kyrgyzstan this week, Foreign Secretary Lord Cameron admitted that Russia is using central Asian countries to sidestep sanctions and build its “war machine”.

Business

US and China extend tariffs deadline again

Published

3 hours ago

August 12, 2025

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US and China extend tariffs deadline again

The world’s two largest economies, the US and China, have again extended the deadline for tariffs to come into effect.

A last-minute executive order from US President Donald Trump will prevent taxes on Chinese imports to the US from rising to 30%. Beijing also announced the extension of the tariff pause at the same time, according to the Ministry of Commerce.

Those tariffs on goods entering the US from China were due to take effect on Tuesday.

The extension allows for further negotiations with Chinese Premier Xi Jinping and also prevents tariffs from rising to 145%, a level threatened after tit for tat increases in the wake of Trump’s so-called liberation day announcement on 2 April.

It’s the second 90-day truce between the sides.

The countries reached an initial framework for cooperation in May, with the US reducing its 145% tariff on Chinese goods to 30%, while China’s 125% retaliatory tariffs went down to 10% on US items.

A tariff of 20% had been implemented on China when Mr Trump took office, over what his administration said was a failure to stop illegal drugs entering the US.

Sector-specific tariffs, such as the 25% tax on cars, aluminium and steel, remain in place.

Chinese stock markets were mixed in response to the news, with Hong Kong’s Hang Seng down 0.08%

The Shanghai Composite stock index rose 0.46%, and the Shenzhen Component gained 0.35%.

Business

Wage rises slow as retail and hospitality jobs continue to fall

Published

3 hours ago

August 12, 2025

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Wage rises slow as retail and hospitality jobs continue to fall

The rate of wage rises in the UK continued to slow as the number of job vacancies and people in work fell, according to new figures.

Average weekly earnings slowed to 4.6% down from 5%, while pay excluding bonuses continued to grow 5%, according to data from the Office for National Statistics (ONS) for the three months to June.

It means the gap between inflation – the rate of price rises – and wage increases is narrowing, and the labour market is slowing. Inflation stood at 3.6% in June.

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The number of employees on payroll has fallen in ten of the last 12 months, with the falls concentrated in hospitality and retail, the ONS said. It came as employers faced higher wage bills from increased minimum wages and upped national insurance contributions.

As a result, it’s harder to get a job now than a year ago.

“Job vacancies, likewise, have continued to fall, also driven by fewer opportunities in these industries,” the ONS director of economic statistics, Liz McKeown, said.

The number of job vacancies fell for the 37th consecutive period and in 16 of the 18 industry sectors. Feedback from employers suggested firms may not be recruiting new workers or replacing those who left.

Unemployment remained at 4.7% in June, the same as in May.

The ONS, however, continued to advise caution in interpreting changes in the monthly unemployment rate due to concerns over the figures’ reliability.

The exact number of unemployed people is unknown, partly because people do not respond to surveys and answer the phone when the ONS calls.

The worst is yet to come

Wage rises are expected to fall further, and redundancies are anticipated to rise.

“Wage growth is likely to weaken over the course of the year as softening economic conditions, rising redundancies and elevated staffing costs increasingly hinder pay settlements,” said Suren Thiru, the economics director of the Institute of Chartered Accountants in England and Wales (ICAEW).

“The UK jobs market is facing more pain in the coming months with higher labour costs likely to lift unemployment moderately higher, particularly given growing concerns over more tax rises in this autumn’s budget.”

What does it mean for interest rates?

While wage rises are slowing, the fact that they’re still above inflation means the interest rate setters of the Bank of England could be cautious about further cuts.

Higher pay can cause inflation to rise. The central bank is mandated to bring down inflation to 2%.

But one more interest rate cut this year, in December, is currently expected by investors, according to data from the London Stock Exchange Group (LSEG).

The evidence of a weakening labour market provides justification for the interest rate cut of last week.

Business

Money Problem: ‘My husband is freelance and in hospital – how can I make sure we don’t lose our home?’

Published

3 hours ago

August 12, 2025

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Money Problem: 'My husband is freelance and in hospital - how can I make sure we don't lose our home?'

Every week, our Money blog team finds the answer to a reader’s financial problem or consumer dispute. Here’s our latest…

My husband is freelance and the breadwinner of the family. He is in hospital for an unknown length of time. Is there any support for us in the short term, so we can keep our home?
Anonymous

Our cost of living specialist Megan Harwood-Baynes tackles this one…

I am so sorry to hear this – I have recently been through something similar with my husband, and it can be really stressful when you add financial worries on top of medical issues.

To help you navigate the next steps, I’ve broken this up into what support you can get with your mortgage specifically, government help and some advice on the rest of your bills.

Help with housing

Your most immediate concern seemed to be housing (understandably). First, try not to panic – it is easy to skip to the thought of losing your home, but the last thing your mortgage lender is going to want to do is go through the hassle of repossession for what could just be a short-term issue.

Start by having a look through your insurance – certain types of insurance can help with mortgage repayments if your income falls due to sickness.

(If you don’t have this, make a note to consider taking it out for next time – you never know when something like this could happen again, and income protection insurance could make a huge difference in the future.)

Assuming you don’t have insurance coverage, the next step is to contact your lender. The sooner you do this, the better, as you’re more likely to have better options available to you before you miss a payment.

Things you can ask for include:

To lengthen the term of your mortgage;
To switch to interest-only repayments;
Ask about a temporary mortgage payment holiday.

There are pros and cons to all of the above, which you should consider carefully.

For example, a mortgage holiday is only suitable as a temporary fix – remember, you are still racking up interest on your remaining mortgage. It will leave the balance and remaining payments higher than they were before.

If you have already missed a payment, you are now in mortgage arrears. This can damage your credit file, and yes, it could eventually lead to you losing your home. But there is still support to get you back on track. Again, contact your lender and ask them for support.

The UK’s biggest mortgage lenders and the Financial Conduct Authority agreed on a set of standards under Rishi Sunak’s government, known as the Mortgage Charter. Under this, lenders are obligated to offer tailored support to anyone struggling – whatever the right option is will depend on your circumstances – so go into discussions with the mindset that they are there to help you.

Government support

If your husband is freelance, you won’t be eligible for Statutory Sick Pay (SSP), but he will be able to claim Employment Support Allowance. This is for people who are self-employed, unemployed, classed as a student or who are employed but not eligible for SSP.

To apply, you will need to demonstrate that he is unable to work because of his illness or injury. The doctors should be able to provide a sick note and medical evidence for this.

You will need to make sure he has paid enough national insurance contributions. He should be able to check his records for gaps and then voluntarily fill them if need be.

He may also be eligible for a personal independence payment or PIP, which is for people living with disabilities or long-term health conditions.

In some cases, he may also be able to claim universal credit – this would be based on his monthly income before he went off sick.

As well as benefits, you may be entitled to a working-from-home tax rebate, or you could reclaim bank charges if you’ve incurred fees for going beyond your limit.

This seems overwhelming, I realise, so the best bet is to start by looking at the government’s benefits calculator.

You should also reach out to Citizens Advice or a charity such as Turn2us for advice from someone who can look at your situation in more detail.

If you aren’t yet in a debt crisis, I would caution against visiting a debt-counselling agency. They may push you towards declaring bankruptcy or an individual voluntary arrangement, which you may not need at this point. They are serious measures designed for those with few options left.

Help with bills and all the rest

Before you start missing payments on your bills, try to contact your utility companies first. Explain the circumstances – they are also obligated to help you.

You can claim support with your energy bills and any other costs. There’s no “one-size-fits-all” approach, so the best thing is to contact each of them individually.

Good luck, and I hope your husband recovers soon.

This feature is not intended as financial advice – the aim is to give an overview of the things you should think about. Submit your dilemma or consumer dispute via: