Economics bulletin 21 October

Date : 21 October 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 price inflation rises again

Food price inflation increased to 14.6% in September from 13.1% last month, the highest level since 1980. Food price inflation is now in line with IGD's forecasts at this point in the year. IGD expects margin pressures to affect retail price changes over the coming months. See here for more details.

Join our team live for our Viewpoint webinar on 18th November and be the first to hear our next Viewpoint update where will reveal IGD’s new forecast for food inflation. Register here.

Inflation reaches 40 year high

The CPI inflation rate increased again to 10.1% in September from 9.9% in August. On the RPI measure, the broadest measure of household costs, inflation reached 12.6%. Rising costs for food (see above), housing and household service due to increased energy costs are contributing most to this increase.

For further insight, please see here.

Changes to Growth Plan

The Government has announced a number of changes to the planned tax cuts included in the Growth Plan following negative reaction from the financial markets. These include:

• Corporation taxes will now increase to 25% from 19% in April 2023.

• The cut to the basic rate of income tax from 20% to 19% in April 2023 has been scrapped indefinitely.

• Alcohol duty rates will not be frozen for 2023.

For further details, please see here.

Changes to energy price guarantee

The Government has confirmed that the Energy Price Guarantee for households will now expire in April 2023, after six months, rather than two years. Independent analysts indicate that the energy price cap will increase to around £4,300, for the average annual household energy bill in April 2023, once the Energy Price Guarantee expires. The Government confirmed that there will be no changes to the Energy Bill Relief Scheme, supporting businesses with their energy bills for the next six months.

Avian Flu

An Avian Influenza Prevention Zone has been declared across Great Britain. All bird keepers must implement strict biosecurity measures. The regional housing order in Norfolk, Suffolk and parts of Essex remains in place.

Changes to seasonal workers visas

The Government has confirmed that the Seasonal Worker visa route is being expanded to include poultry workers to support the industry in the run up to Christmas.

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