Bulletin: El Niño and economic growth

El Niño raises supply and inflation risks 

The World Meteorological Organization has confirmed high risk of an El Niño weather event developing in 2026, with an 80% chance by summer and over 90% likelihood later into the year.  

The event is expected to raise global temperatures and disrupt rainfall patterns, increasing the risk of drought, flooding, and wider supply chain disruption across agriculture.  

See A climate risk assessment of the UK food system report 

IGD opinion 

For food systems, this points to greater volatility in key producing regions, with potential impacts on crop yields and global commodity markets. Combined with higher energy costs, these pressures could feed through to food prices later in 2026 and into 2027. 

Milburn review urges volunteering action 

Rising youth inactivity is back in the spotlight following the Milburn review, which warns of a growing risk to the UK’s future workforce. Employers are being urged to play a bigger role in helping young people transition into work, with volunteering in schools highlighted as a practical way to build skills, confidence, and career awareness.  

Act now: Join IGD’s Feeding Britain’s Future schools programme - commit volunteer time, engage with students, and help rebuild the talent pipeline.  

See our latest article, Milburn review: Volunteering can bridge the gap 

Middle East update 

Middle East tensions add to energy and supply risks 

Renewed escalation in the Middle East has pushed oil prices higher, with Brent crude approaching $97 per barrel amid ongoing disruption risks to key routes such as the Strait of Hormuz. Falling inventories have added to upward pressure, reinforcing concerns around energy costs. Continued constraints on supply and logistics are increasing volatility and could feed through to inflation and food prices later in 2026.

Growth under pressure 

The OECD has nudged down its global outlook, forecasting growth of around 2.8% in 2026, compared with 2.9% previously, as energy shocks and geopolitical tensions push up inflation and downside risks intensify.  

For the UK, the picture is mixed. Growth has been revised up slightly to 0.9% for 2026 (from 0.7% in March), but remains subdued, with higher energy costs expected to lift inflation and squeeze real incomes. 

Overall, the OECD highlights a more fragile outlook, with weaker growth momentum and persistent inflation pressures shaping the near-term environment. 

Healthy and Sustainable Diet Network summary 

IGD have recently relaunched the Health and Sustainable Diets Network, a group of food system stakeholders who come together to face into some of the biggest opportunities and challenges facing the food system today, specifically improving the population’s diet.  

This article provides summary of the event. If you, or a colleague, wants to be a part of the next network event in Q4 2026 email [email protected] 

The group who will meet every six months going forward, had their first event in May. 

Free HFSS webinar: Monday 8 June 

New UK food rules are moving up the agenda as the government consults on applying a stricter Nutrient Profiling Model to HFSS restrictions. The changes could bring more products into scope, with tighter rules on free sugars and fibre, creating significant implications for reformulation, marketing, and promotions. 

With the consultation closing on 17 June, time is limited. IGD’s free 45‑minute webinar will break down the 106‑page impact assessment, offering clear insight on policy changes, commercial implications and how to submit an effective response. 

Act now: Register for the webinar to gain practical guidance and prepare your submission before the deadline.