Economics bulletin 09 September

Date : 09 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.

New Defra Secretary of State

Ranil Jayawardene, the newly appointed Secretary of State for Environment, Food and Rural Affairs has stated that “It is a privilege to serve as Environment Secretary. From food security and supporting our farmers, to water quality and economic growth for our rural communities, there is much to do.

“I am looking forward to working with the department and people across Britain to deliver a thriving British food industry, a cleaner environment and maximise the benefits of Brexit.”

Household energy support package

The average annual household energy bill will be capped at £2,500 from October for 2 years, as part of the Government’s Energy Price Guarantee. Ofgem had previously announced that the energy price cap would increase to £3,549 from October.

The Bank of England suggested that the plans to freeze energy bills could curb inflation. However, it also stated that it may have to raise interest rates higher than predicted due to the scale of the package.

For further insight please see here.

Business energy support package

The government will freeze the energy unit price for businesses and public services, in line with the level of support provided for households.

This support will run for six-months, after which the Government will provide ongoing, focused support for vulnerable industries. There will be a review in 3 months’ time to consider where this should be targeted.

For more insight, please see here.

Shopper confidence falls to all time low

IGD’s Shopper Confidence Index has recorded its biggest monthly decline (6 points) and is now at -27, another all-time low.

Confidence declined sharply towards the end of the month due to the announcement of the energy price cap. It is expected that the Government’s Energy Price Guarantee may stabilise confidence in the short term.

ShopperVista subscribers can access the full report here.

CO2 Gas Supplies

CF Industries is expected to temporarily halt ammonia production at its Billingham plant due to the rising price of natural gas, making production uneconomical.

Although supply may be maintained through imported CO2, industry remains concerned about continuity of supply and cost of CO2.

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