Economics bulletin 18 February

Date : 17 February 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 COVID-19, the rising cost of living, labour shortages and adapting to a new relationship with the EU.

Rising cost of living

UK inflation has reached its highest point for 30 years recording 5.5% on the CPI index and 7.8% on the old RPI index. Price rises in ‘food and drink’ have accelerated dramatically, from -0.6% in August to 4.4% in January.

Input prices for food producers are up 5.5% since August, it is expected these rises will feed into retail prices over the coming months.

The Bank of England expects inflationary pressure to peak in April, once the energy price cap is lifted by 54%.

Understand IGD’s view on how far inflation will go and the impact on the food and consumer goods industry by downloading the latest Viewpoint report: 2022: Will inflation kill the recovery.

Wages pressure

The latest UK labour market data reveals a continued decline in unemployment, while the number of vacancies have again increased to record levels.

The average weekly wage is rising, however, adjusting for the impact of RPI inflation, workers are 2.7% worse off than a year ago.

Pig industry review

The government has launched an immediate review of supply chain fairness in the pig industry. The review will engage with the industry immediately, with a formal consultation expected to follow later this year.

The government has extended its measures announced in the Autumn through to March. These measures include the admission of overseas butchers on temporary visas.

It has been reported that there are a significant number of pigs backed-up on farms, unable to be taken for slaughter.

Changes to EU-GB imports and exports

To date there have relatively few reported issues following the introduction of new border controls on 1 January and new Animal Health Regulation Export Health Certificates (EHCs) on 15 January 2022.

The government is continuing to engage with the European Commission to clarify the French Border Control Posts (BCPs) requirements for wild caught species of shellfish. Currently BCPs are temporarily showing flexibility to traders, allowing Food Competent Certifying Officers, in addition to Official Vets (OV’s) to sign off shipments.

It is recommended that exporters remain in regular contact with BCPs. For any further information around shellfish exports please contact: [email protected]

There remains continued concern around the number of OV’s that will be available to sign off shipments once the upcoming border changes in July take place.

New research by the British Chambers of Commerce of more than 1,000 businesses reveals that 71% of exporters say EU trade deal is not enabling them to grow or increase sales.

See the key dates for UK-EU transition and support for businesses

Food traders are advised to comply with ongoing safety checks on agri-food goods entering Northern Ireland from Great Britain, following the instruction from the Northern Ireland Executive to halt checks.

See the guidance on trade with the UK as a business based in the EU.

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