Economics bulletin 18 May

Date : 19 May 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, disruptions to supply chains, the Ukraine crisis, labour shortages, policy developments and adapting to a new relationship with the EU.

Price rise investigation

The Competition and Markets Authority has announced that they are stepping up their work in the grocery sector to understand whether any failure in competition is contributing to grocery price rises.

The work will assess how competition is working in the retail sector and whether any specific categories require further investigation.

Food price inflation in March reached a 45 year high of 19.1%, in line with IGD’s forecasts. IGD will be launching our latest forecasts for food price inflation in early June. Click here to see our latest insight and be the first to learn of our expectations for food prices once they are released.

Farm to Fork Summit

Representatives from the whole food supply chain attended the Farm to Fork Summit at Downing Street attended by the Prime Minister. The Prime Minister has confirmed that:

  • A new and expanded Fruit and Vegetable Scheme to support the horticultural sector will be launched
  • The Grocery Code Adjudicator will be kept separate from the Competition and Markets Authority
  • 45,000 visas will be available for the Seasonal Worker Visa Scheme in 2024, with the capacity for a further top up of 10,000

Ahead of the Summit the Government announced a package of support to promote British food and drink exports. Central to this is the confirmation that farmers’ interests will be at the “heart of trade policy”.

Real pay continues to fall

The growth rate in average weekly earnings between January to March 2023, excluding bonuses, increased strongly to 6.7% year-on-year. Average wages, after adjusting for the impact of inflation, continues to fall. Using the wider RPI measure of inflation, real wages are now down 7.8% year on year.

See our article here for our analysis of pay.

Out of work sickness at record level

More than 2.5 million people are economically inactive due to long term sickness. This is the highest level on record. This compares to 2.1 million in the period January to March 2020.

Read our article here for our analysis of the UK labour market.

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