Economics bulletin 03 February

Date : 02 February 2023

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, policy developments and adapting to a new relationship with the EU.

Shopper confidence boost

IGD’s Shopper Confidence index has risen to -17 compared to -21 last month, the highest level in a year as shoppers started the year in an upbeat mood.

As predicted in our latest Viewpoint Report: From inflation to recession: what to watch out for in 2023, food price inflation will fade as prices flatten over 2023. IGD’s latest ShopperVista research shows that only 33% of shoppers expect food prices to get much more expensive compared to 53% last August.

ShopperVista subscribers can read the full Shopper Confidence Index report here.

Interest rate rise

The Bank of England Monetary Policy Committee has voted to raise interest rates further from 3.5% to 4.0%. This is the highest level since the 2008 financial crisis.

The Bank expects inflation to fall rapidly in 2023, from 9.7% in Q1 2023 to 3.0% in Q1 2024. Throughout this period the UK is forecast to experience a shallow recession.

Negative growth predicted

The UK is projected to be the only advanced economy to experience negative growth in 2023 according to the International Monetary Fund (IMF).

The IMF significantly downgraded the UK’s growth forecast to -0.6% in 2023, due to tighter fiscal and monetary policies and the impact of high energy prices on households.

For more analysis, please see here.

Sustainable agriculture

DEFRA has set out plans for an accelerated roll out of its Environmental Land Management schemes (ELMs).

Six additional standards will be added to the Sustainable Farming Incentive including actions on hedgerows and grasslands. The update also sets out how farmers will receive funding through the enhanced Countryside Stewardship scheme.

Additionally, the Government has set out how it will restore nature and improve environmental quality in the new Environmental Improvement Plan 2023.

CMA pricing review

The Competition and Markets Authority (CMA) has launched a review into grocery unit pricing practices. The review will consider whether the issues raised in its 2015 report still remain, whether retailers are compliant with the law and how consumer awareness has shifted on unit price information.

2023 Groceries Code Adjudicator survey

The annual Groceries Code Adjudicator (GCA) survey is now open for businesses to provide feedback on their experience of how retailers are complying with the Groceries Supply Code of Practice (GSCOP). The survey can be found here and will close on 26th February.


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