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.
How bad is the economic storm?
The UK is entering a period of economic difficulty with inflation eroding away household incomes. Register here to join our team live for our final webinar of 2022 and be the first to hear:
- Our forecasts for food inflation
- The impact on the economy and outlook for growth
- How consumers might react
- An overview of the changing policy landscape
Longest recession forecast
The Bank of England has forecast that the UK is facing its longest recession since records began. GDP is projected to continue to fall throughout 2023 and the first half of 2024.
The unemployment rate is expected to increase to 6.4% by the last quarter in 2025 from 3.7% in Q4 2022. CPI Inflation is also expected to increase to around 11% in Q4 2022 before falling back sharply from mid-2023.
See here for more details.
Rising interest rates
The Bank of England Monetary Policy Committee has voted to raise interest rates from 2.25% to 3.0%. This is the largest rate rise since 1989. The Bank has forecast that interest rates may increase to 5.2% in the last quarter of 2023.
Treasury warns of tax rises
Ahead of the Autumn Statement on 17th November, treasury sources have stated that “everybody will need to contribute more in tax if we are to maintain public services."
Experts have forecast that the UK will enter recession, with GDP likely to be 2-4% weaker than forecast at the budget in March.
Shopper increased focus on savings
IGD’s Shopper Confidence Index remains at an historically low level. More consumers than ever recorded are shifting their focus to saving money on their food and groceries. 47% are prioritising saving money over quality, compared to 26% in October last year.
A UK wide mandatory housing order will come into force on 7th November for all poultry and captive birds. All birds must be kept indoors and strict biosecurity measures must be followed.
The Government has announced a new package of measures to support farmers impacted by avian flu. In the event of an outbreak of avian flu, farmers will receive compensation from the outset of culling rather than at the end.
DEFRA has launched the survey for the Independent Review of Labour Shortages in the Food Supply Chain. To complete the survey please see here.
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Our round-up of the latest economic and political news, focused on FMCGs