Economics bulletin 09 June

Date : 08 June 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.

Food inflation to decline slowly

Food price inflation has proven surprisingly persistent in recent months, peaking in March at 19.1%, broadly following our previous inflation forecast published last November.

Our NEW forecasts, released yesterday, indicate that food inflation will slow as 2023 progresses. It is expected to be 8-10% by the end of this year, 1% higher than our previous forecast.

Download our new Viewpoint Special: Exploring what’s next for food inflation or read the Executive Summary to understand our new forecasts and the impact food inflation will have on consumers and the industry.

Price rise investigation update

The Competition and Markets Authority (CMA) has sent an open letter updating stakeholders in the grocery sector on the investigation they are carrying out.

The CMA has confirmed they “have seen no evidence at this stage of specific competition problems” but will be looking at retailer profitability trends and examining which product categories merit closer examination.

The CMA aims to publish an update to its work in late July. In that time, they plan to speak to a wide range of stakeholders across the grocery industry. Evidence can be submitted to [email protected]

Deposit Return Scheme update

The Scottish Government has confirmed that the Deposit Return Scheme in Scotland will be delayed until October 2025 at the earliest.

This brings the scheme in line with the planned scheme the UK Government announced earlier this year. The delay raises the possibility of a UK wide inter-operable scheme.

Oil production to fall

The OPEC+ group of oil-producing countries has confirmed that they will extend oil production cuts, in order to reduce supply to the market and support oil prices.

Oil prices have fallen considerably over the past year, to below $80 per barrel down from the peak of over $120 per barrel in Spring 2022.

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Our round-up of the latest economic and political news, focused on FMCGs