Bulletin: GDP, employment rights, lower confidence

Slow GDP growth

The ONS has reported that GDP has increased by 0.2% in August and has increased by 0.2% for the three months to August 2024. This is the second month running of no growth. Services output was the main contributor with growth of 0.1% for the quarter.

Retail sales volumes are estimated to have risen by 1.0% in August 2024, following a rise of 0.7% in July 2024.

The Chancellor has committed to taking action to drive sustained economic growth. More detail is expected in the budget on 30 October.

Our next Viewpoint report, due out 14 November, provides our analysis of the budget along with our predictions for what's in store for the economy, consumer sentiment and government policy in 2025 and beyond.

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Confidence declines

IGD’s Shopper Confidence Index has declined for the second month running. This has coincided with negative media headlines concerning rising taxes and higher energy bills. ShopperVista subscribers can see how the results differ by different demographic groups.

IGD opinion

Since the general election, consumers have been faced with the announcement of the withdrawal of winter fuel payments for the elderly, an increase in energy bills and talk about an increase in taxation for some in the forthcoming budget.

It is therefore not surprising that confidence has been impacted. Consumers and businesses within the food system will be hoping that the budget at the end of the month will provide greater certainty to ensure spend on food is not impacted.

Employment rights

The government has published the much-anticipated Employment Rights Bill. Key proposed measures include:

• Consultation on new statutory probation period for new employees

• Protection from unfair dismissal from day one on the job

• Ending zero hour contracts

• Day one rights for paternity, parental and bereavement leave

• Strengthening statutory sick pay

• Action to reduce “pay gaps” based on disability, sex or race

• A new Fair Work Agency to enforce rights such as holiday pay and support employers looking for guidance on how to comply with the law

• Change the law to make flexible working the default, unless employers can prove it’s unreasonable

Most of the planned changes will not take effect for two years following a period of consultation.

IGD opinion

The Employment Rights Bill will be a central pillar for the new government to boost economic growth. The Bill proposes 28 policies, which will drive significant change for businesses. However, for many businesses across the food system, certain practices or contract types are not common practice and so parts of the Bill will have limited impact.

The most impactful areas beyond the Employment Rights Bill, include the updating of trade union bills, ‘A right to switch off’ and a new statutory probation period.

Implementation will be the key challenge when it comes to these policy changes. Many of the changes will undergo a period of consultation. It will take two years or more until parts of the package will be enforced. This will be welcomed by many businesses within the food system as it allows the opportunity to influence and ensure there is not only clear guidance but also adequate time to prepare. However, it will be important that the needs of small businesses are taken into account.

Record population

The UK population increased by 1% in 2023 to 68.3m, mainly due to international migration. This is the largest increase since records began in 1971.

More people died than were born in 2023 (natural change). This is the first decline since 1976, apart from 2020 during COVID.

IGD Opinion

The UK population is expected to rise to about 78m by 2050. The growing population will increase volumes, placing greater demands on the industry. The global food system must produce more food in future to feed a growing population.

Read one of our most popular free reports: Resilience: A system under pressure to understand the risks affecting the UK food system.

Border check delays

Post-Brexit checks on fresh produce have been delayed until 31 January 2025. The government had planned to introduce safety and security declarations for all imports as part of the Border Target Operating Model on 31 October.

Precision breeding

The government has announced new laws to support precision breeding technology, like gene editing on plants. The aim is to help increase food production, reduce costs to farmers, reduce the use of pesticides, and increasing food security and resilience.