IGD – Economics bulletin 04 February

Date : 03 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.

Shopper confidence drops

Latest results from IGD’s Shopper confidence index (for ShopperVista subscribers) reveal that shopper confidence reached its lowest level since the index started in 2013.

With the cost of living rising at its fastest rate in 30 years, 89% of shoppers expect food prices to get more expensive in the year ahead.

Rising cost of living

Shopper confidence is likely to be further impacted by the rising cost of living.

Ofgem has announced a 54% increase in the energy price cap, meaning the average bill will rise to £1,971 year from 01 April.

The Chancellor of the Exchequer has announced the following package of support for households:

  • Households across England in council tax bands A to D will receive a £150 council tax rebate in April.
  • Electricity customers will receive a £200 discount on their bills from October. This is to be paid back in £40 installments over the next five years.
  • Devolved administrations have been provided similar levels of funding to provide support.

This comes as the Bank of England has announced an increase of 0.25% in interest rates to 0.5%, to curb rising inflation.

The Bank of England has also updated its inflation forecast, predicting a peak of 7.25% on the CPI measure in April.

Declining absence

Absence rates within the food and consumer goods industry due to the Omicron variant are declining and remain manageable.

Businesses can also reduce the risk by encouraging staff to get vaccinated and to receive the booster. See the section on ‘reducing contact for workers’ for further details.

The Department for Environment Food & Rural Affairs (DEFRA) is requesting that businesses continue to complete a daily labour absence survey.

CO2 supplies

An agreement has been reached to ensure UK businesses have access to a sustainable supply of CO2. This deal allays fears of shortages for key industries over the next few months following the end of the previous agreement on 31 January between the government and CF Fertilisers.

The government is continuing to engage with the industry in order to improve the resilience of CO2 supplies across the country.

Levelling up

The Government has published it’s levelling-up white paper, detailing plans to address geographical inequalities across the country.

The paper sets out 12 “missions” focussed on improving the productivity, public services, and sense of community across the country.

The transfer of power from central government to local government, through the offer of devolution to every region, will be a key mechanism of the agenda.

The Government is expected to set out further policy developments with implications for the food and consumer goods industry in its National Food Strategy white paper in Quarter 2022. Later in the year a new White Paper analyzing health disparities across the UK is expected to be released.

Government launches Help to Grow scheme

The Help to Grow scheme, originally announced in March 2021, has now been launched.

Small and medium-sized business leaders can now access a 12-week practical management training programme.

Businesses can also access free, impartial advice on the best digital technology services available. Support of up to £5,000 is available for eligible businesses to purchase approved digital technologies.

IGD offers free learning programmes for the food and consumer goods industry.

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