Economics bulletin 20 January

Date : 19 January 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, COVID-19 and adapting to a new relationship with the EU.

Food inflation rises

The ONS has announced that food and drink CPI inflation increased to 16.8% in December from 16.4% last month, the highest level since 1977. Food inflation has now been increasing for 17 consecutive months, since July 2021.

Food price inflation continues to be in line with IGD's latest forecast. To hear our predictions on what’s in-store for the economy, consumers and government policy, register here for our upcoming Viewpoint Webinar on 26th January – From inflation to recession: What to watch out for in 2023.

Overall inflation falls again

The UK’s overall CPI inflation rate has eased for the second consecutive month from 10.7% to 10.5% in December. The downward movement in inflation is primarily due to falling fuel prices. It is expected that inflation will continue to ease over 2023.

For further insight, please see here.

Real pay falls again

Average weekly earnings in the UK were up 6.5% 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 7.1% versus 2021.

See here for more details

Availability concerns remain high

In the latest consumer research conducted for IGD (13-15 January 2023) two thirds of adults (66%) experienced shortages of some food and groceries in-store or online recently. This remains high and compares with just 50% in July’21. Availability concerns are increasing the most for dairy including eggs and medicines.

For further insight, please see here.

UK-EU negotiations update

The UK and EU have continued to hold talks on the Northern Ireland Protocol. It was agreed that the current work for “potential solutions should continue in a constructive and collaborative spirit”.

Single-use plastic ban

The Government has announced a ban, from October 2023, to the use of single use plastic items such as plastic cutlery, plates and polystyrene trays in England. The ban will apply to all businesses; however, it will not apply to packaging in shelf-ready pre-packaged food items.


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