Britain said it believed a trade deal with the United States was close as it sought to soften the impact of U.S. President Donald Trump's sweeping tariffs which threaten an escalating global trade war that would hurt its open economy.
Britain was spared the most punitive treatment in Trump's tariff announcement on Wednesday when it was hit with the lowest import duty rate of 10%.
London said that decision vindicated its approach of trying to strike a new economic partnership with the U.S., rather than meeting fire with fire.
But Britain's economy, which has been sluggish largely since the 2007-08 global financial crisis, is vulnerable to a global economic slowdown. Weaker growth could force the government to cut spending or increase taxes to meet its own fiscal rules.
An agreement with the United States could at least help the Labour government which promised voters in last year's election that it would speed up the economy.
Business minister Jonathan Reynolds said Britain, as an outward-facing economy, was "exposed not just to decisions between ourselves and the United States, but that wider global environment".
He told the BBC it was "not inaccurate" to say the two sides had agreed the broad outline of a deal, which might secure a carve out on tariffs, but that it had not yet crossed Trump's desk.
"We've got to keep this work going," he said, adding that he recognised that Britain was already in a better position than lots of other countries who are facing tariffs of 20% or higher.
Britain must decide how much it is willing to concede to Trump. Trade experts warn that his demands could force it to confront sensitive issues from trading ties with the European Union and China to how it treats its large cultural sector.
"Negotiations on an economic prosperity deal, one that strengthens our existing trading relationship - they continue," Prime Minister Keir Starmer told business leaders on Thursday.
"Nonetheless, I do want to be clear I will only strike a deal if it is in our national interest," he said at a meeting in Downing Street.
Britain had argued that it should not be punished by Trump's tariffs because trade flows between the two countries were broadly in balance and its exports were mostly in services, which unlike goods do not typically incur tariffs.
But its manufacturers are part of European and global supply chains, meaning they could be hurt by retaliation against Trump's tariffs. China and the EU have vowed countermeasures.
Allie Renison, a former government adviser on trade, said that while Britain had been trying to agree a relatively narrow, tech-focused deal with the U.S., Republican members of Congress would push for greater access to Britain's agricultural markets.
Attempts to strike a bilateral trade deal during Trump's first term ran into opposition from Britain's government over measures to lower animal welfare and environmental standards.
The U.S. government could also demand Britain relaxes some of its regulation around social media and artificial intelligence, with the latter potentially affecting copyright rules for Britain's cultural sector.
