Economics bulletin 11 November

Date : 10 November 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.

Food inflation to worsen

A new forecast by IGD reveals that annual CPI food price inflation will peak between 17%-19% in early 2023, then begin to slow over the following year.  Price rises will be most significant for meat, fruit and vegetables, dairy and bread. Data from ONS shows that food and drink inflation reached +14.5% in September 2022, which is in line with IGD forecasts.

Register here to join our team live for our upcoming webinar on 18 November, to discover:

  • Further insight into our latest food inflation forecasts,
  • The impact of the Autumn Statement on the food and consumer goods industry
  • How consumers may react
  • An overview of the volatile policy landscape

GDP declines 

The ONS has announced that GDP is estimated to have declined by 0.2% for July-September 2022. This follows a 0.2% rise in Quarter 2 (Apr to June) 2022. GDP is estimated to have fallen by 0.6% in September 2022. The Bank of England recently predicted 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. A recession is when GDP falls in two successive quarters.

Farming production decline

During evidence to the Environment, Food and Rural Affairs select committee on food security, NFU President, Minette Batters warned that rising input costs and labour challenges are likely to lead to a fall in agricultural production in 2023. Minette Batters predicted that there will be “huge contractions [of production] in the protected crops sector” alongside a decline in production in the pig, poultry and horticulture sectors.

Avian Flu 

A number of cases of a highly pathogenic strain avian influenza have been confirmed across the UK as the poultry industry faces its worst ever outbreak. An England-wide mandatory housing order came into force on 7 November for all poultry and captive birds.

Labour Shortages

DEFRA is encouraging food businesses to complete the survey for the Independent Review into Labour Shortages in the Food Supply Chain.  The review intends to make clear policy recommendations to Government in spring 2023.

To complete the survey please see here.


More economic news and analysis

Sign up to our bulletin

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