Economics bulletin 02 September

Date : 02 September 2022

Your overview of economic and policy news with a focus on the food and consumer goods industry. Featuring the latest developments and guidance on the rising cost of living, the Ukraine crisis, labour shortages, COVID-19 and adapting to a new relationship with the EU.

Food inflation accelerates

Food prices rose at their fastest rate in August, up to 9.3%, according to the latest measure of shop price inflation. Dairy products such as milk and margarine are seeing largest contributors to food price rises.

IGD forecasts that food inflation will reach 15%, on the CPI index, with a +/- 1% margin of error, by the autumn.

Download our free Viewpoint Special: Exploring the outlook for food inflation here.

Inflation outlook worsens

Independent analysts have predicted that UK inflation could reach 22% unless change is seen in wholesale gas markets. High energy prices are predicted to push the UK economy into a recession in Q4 2022. GDP is expected to fall by 0.6% over 2023.

In our latest Viewpoint report, IGD forecasts that the UK will enter recession in late 2022 due to declining household incomes and rising inflation.

Pub closure warning

The leaders of the UK’s largest breweries have warned of closures and job losses due to rising energy costs of over 300% when compared to pre-pandemic levels.

The leaders have called on government to implement an urgent support package that effectively caps the price of energy for businesses.

Three key challenges for food industry

As the new Prime Minister is set to meet a daunting set of economic challenges, see here for our latest insight on three key challenges facing the food and consumer goods industry; Rising food price inflation, widespread supply chain disruption, labour shortages and productivity concerns.

Sales of horticultural peat to be banned

The Government has banned the sale of peat in garden centres and supermarkets by 2024. The ban only applies to England and does not apply to the horticultural trade sector.

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