Economics bulletin 16 December

Date : 15 December 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.

How high will food inflation go?

The ONS has announced that food price inflation increased to 16.5% in November from 16.4% last month, the highest level in 45 years. The inflation rate for restaurants and hotels has increased by 0.6% in November to 10.2%.

While food price inflation is in line with IGD's updated forecasts, to understand how high inflation will go, download our latest free Viewpoint report: How bad is the economic storm? here.  

Inflation and interest rates

The UK CPI inflation rate has eased back from the October level of 11.1% to 10.7% in November 2022. On the RPI measure, the broadest measure of household costs, inflation declined by 0.2% to 14%. Lower fuel prices was the largest contributor to the decrease in the inflation rate.

The Bank of England Monetary Policy Committee has voted to raise interest rates further from 3.0% to 3.5%. Interest rates have risen by 3.25% since December 2021.

For further insight, please see here.

GDP declines

The ONS has announced that GDP rose by 0.5% in October following the disruption in September due to the Queen’s death.  GDP is estimated to have declined by 0.3% for August-October 2022.

Last month the OBR predicted that the UK was already in recession, with this expected to last around a year. A recession is when GDP falls in two successive quarters.

Real pay continues to fall

Average weekly earnings were up 6.1% year-on-year. However, average wages, after adjusting for the impact of inflation, continue to fall. Using the wider RPI measure of inflation, real wages are now down about 6.8% versus 2021. This comes at a time when the number of days lost to strikes in  October was the largest number since November 2011.

See here for more details.

Unemployment and job vacancies

The UK labour market remains strong, however, there are signs that the economic pressure is having an impact. Unemployment rose slightly to 3.8%, whilst job vacancies fell for the fifth consecutive quarter, but remain high compared to pre-pandemic levels.

See here for more details.

HFSS advertisement restrictions pushed back

The Government has announced a further delay to the implementation of advertising restrictions on TV and online for HFSS products until October 2025. 

There has been no update to the restrictions on multibuy promotions scheduled to come into force in October 2023.

Seasons greetings

As this is due to be the last Economics Bulletin of 2022, we wish you a happy festive season and a joyful New Year. We look forward to providing you with an overview of economic and policy news in 2023.


More economic news and analysis

Sign up to our bulletin

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