Economics bulletin 30 September

Date : 29 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.

IMF concerns

The IMF has raised concerns about the Growth Plan announced by the Chancellor of the Exchequer last Friday. It stated that “we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy”.

The IMF urged the government to use the November 23rd Medium-Term Fiscal Plan “to consider ways to provide support that is more targeted and re-evaluate the tax measures, especially those that benefit high income earners”.

Interest rates forecasts

The Bank of England chief economist, Hugh Pill, has warned the Growth Plan and the market reaction to it including the declining value of the pound against the dollar “requires a significant monetary policy response”.

Independent analysts now forecast that interest rates could rise from 2.25% to 5.5% or even higher by next spring.

The Bank of England has announced that it “will carry out temporary purchases of long-dated UK government bonds from 28 September to restore orderly market conditions”.

Productivity gaps

IGD has identified potential solutions to closing the productivity gaps in the food and drink supply chain. Look out for our latest Viewpoint special report due out 6 October.

Availability concerns relatively high

In the latest consumer research conducted for IGD (23-25 September 2022) more adults (63% vs 60% 02-04 Sep’22) experienced shortages of some food and groceries in-store or online recently. Availability concerns have increased the most for dairy and bakery products. See here for more details

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