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, disruptions to supply chains, the Ukraine crisis, labour shortages, policy developments and adapting to a new relationship with the EU.
Food inflation to be persistent
IGD expects food inflation to be more persistent than overall inflation and decline slowly as 2023 progresses. There is no expectation that food prices will fall. Food inflation will be a key driver of inflation keeping household finances under pressure.
To understand what this means for your business read our latest Viewpoint report: Time to plan for a weak recovery? Or download our one page Executive Summary.
Public sector borrowing remains high
UK Government borrowing for the month of March was the second highest on record, reaching £21.5bn. This is an increase of £16.3bn since March 2022. The rise has been primarily driven by the cost of energy support schemes provided to households and businesses.
The amount borrowed over the last financial year was 5.5% of GDP, the highest level since 2014 outside of the COVID-19 pandemic.
Availability concerns remain high
In the latest consumer research conducted for IGD (21-23 April 2023), three quarters of adults (74%) experienced shortages of some food and groceries in-store or online recently. This is still one of the highest levels recorded since this was first measured in July’21. This has declined slightly since last month (-3%).
Availability concerns have declined for fresh produce (40% compared to 52% last month).
For further insight, please see here.
Scottish Deposit Return Scheme Update
The Scottish Government has announced several changes to the Scottish Deposit Return Scheme, following the confirmation that the launch date has been delayed to 1st March 2024. These changes include:
- The exclusion of small drinks’ containers under 100ml.
- The exclusion of products that sell fewer than 5,000 units per year.
For full analysis of the announced changes, please see here.
Target Operating Model
Throughout next week, Defra is hosting a range of online sessions to give all impacted sectors the opportunity to understand how the Target Operating Model will change the process of importing and exporting to and from the UK.
To sign up to the sessions, please see here.
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Our round-up of the latest economic and political news, focused on FMCGs