The collapse of Saudi Arabia's sovereign wealth fund-driven spending programme has left British exporters facing a sharp downturn in orders, with losses estimated in the billions. The fund, the Public Investment Fund (PIF), has slashed overseas procurement by nearly 40 per cent in the current fiscal year, according to trade data reviewed by this correspondent. Whitehall sources confirm that the Foreign Office has convened emergency meetings with UK Trade and Investment officials to assess the damage.
The shift follows a dramatic reassessment of fiscal priorities in Riyadh. After years of lavish investments in infrastructure, entertainment, and luxury goods under the Vision 2030 reform plan, the kingdom has ratcheted back spending as oil revenues fall short of projections and the budget deficit widens. The International Monetary Fund estimates Saudi Arabia needs Brent crude at $91 per barrel to balance its books; prices have hovered near $75.
British firms, traditionally strong in defence, engineering, and high-end consumer goods, are among the hardest hit. Rolls-Royce, which supplies engines for the Saudi military and civil aviation, reported a 15 per cent drop in Middle East orders in the last quarter. Luxury carmaker Aston Martin, which opened a showroom in Riyadh in 2022, has seen sales to Saudi buyers decline by more than a third. Smaller exporters in sectors such as textiles and medical equipment are also reporting cancelled contracts.
The PIF's retreat is particularly acute in mega-projects like Neom, the $500bn futuristic city. Contracts valued at £2.3bn for British construction and project management firms have been postponed indefinitely. A senior executive at a London-based consultancy, speaking on condition of anonymity, described the situation as “frozen assets on the ground.”
Diplomatic sources indicate that the British government is exploring financing guarantees and risk insurance for SMEs. However, the scale of the downturn suggests structural rather than cyclical factors. Saudi Arabia is prioritising domestic manufacturing and local content requirements under its “Made in Saudi” programme, reducing reliance on imports. The kingdom’s Public Investment Fund has redirected capital towards domestic ventures, including a $1bn investment in Saudi defence production.
The impact on UK export figures is tangible. Preliminary data from HM Revenue and Customs show a 12 per cent decline in goods exported to Saudi Arabia in the first half of the financial year compared to the same period last year. Services exports, which include consultancy and education, have also slowed. If the trend continues, the total value of lost business could exceed £4bn annually, according to the UK Trade Policy Observatory.
For British exporters, the Saudi market was once a reliable source of high-value contracts. The sudden reversal underscores the volatility of relying on petrodollar economies undergoing rapid transformation. As one trade negotiator put it: “The party is over. Now we have to adjust to a new reality where Saudi Arabia is a competitor, not a customer.”
The Foreign Office has declined to comment on specific measures, but officials stress that the UK remains committed to the bilateral relationship. In the meantime, firms are diversifying into Qatar, the UAE, and Southeast Asia. But the window of opportunity in Saudi Arabia has narrowed, and the cost for British exporters is already being counted in lost revenue and jobs.
