Featuring the PM at Sainsbury’s, nervous bond markets, share values, PM speech, record summer heat, school leavers and more war.
Government backs work experience in the food industry
IGD Chief Executive Sarah Bradbury was at a Sainsbury's store last week, alongside PM Andy Burnham, Pat McFadden, Secretary of State for Work and Pensions and Mayor of London, Sadiq Khan, to support the launch of the retailer’s new Modern Work Experience Programme.
This follows our call for food and drink businesses to explore modern work experience as part of our cross-industry movement Feeding Britain's Future.
IGD opinion
Early, meaningful interactions with employers can play a vital role in opening young people’s eyes to opportunities in our industry and helping them take their first steps towards rewarding careers. It’s encouraging to see Sainsbury’s leading the way in turning this ambition into action.
See how IGD is working with industry partners to provide meaningful encounters with food and drink employers.
UK bond yields hit multi-year high
Investors are charging higher premiums to lend money to the UK government. 10-year bond yields (effectively, the interest paid on loans to the government) rose briefly to 5.9% this week, which was the highest level since March 1998, although they have since fallen back slightly.
IGD opinion
This issue is not exclusive to the UK. It is part of a wider trend, affecting many governments, with lenders increasingly concerned about the ability of governments to pay debt obligations and to contain the impact of war in the Persian Gulf. UK bond rates are currently higher than those of the US, Japan, France, Germany, Italy, the Netherlands and Spain, however.
The UK government is extremely indebted and relies on fresh debt to make ends meet, making any increase in bond yields very painful. In the latest Budget, interest payments in 2026-27 were expected to be £135bn, or about 10% of all government spending – more than defence or public order.
In reality, the cost of debt may turn out to be even higher than previously planned – ultimately, most of this extra cost will have to be covered via extra taxes on households.
This new data underlines the pressure that the new PM and Chancellor will be facing as they prepare the forthcoming Budget – their tactical options may be very limited.
Bank of England signals asset price risk
Andrew Bailey, Governor of the Bank of England and Chair of the FSB, has raised the alarm over share valuations. In a letter to G20 finance ministers, he has warned of a combination of high prices, high debt and over-commitment to risky stocks, especially AI. This, he said, raises the risk of a “disorderly correction”.
IGD opinion
This may seem esoteric and “fringe” for those operating in the food and drink system, but “disorderly correction” is coded language for something that should worry everybody – an international stock market slump and economic shock.
The UK economy was seriously harmed by asset price corrections connected to sub-prime lending – that was 20 years ago, and the damage has not been corrected. It is not clear what food business leaders can really do to address this risk, however, except to remain financially cautious – not helpful when the system needs to evolve to be more future ready.
PM promises more control of key services
Parliament is back in session after the summer break. New PM Andy Burnham has given a wide ranging speech.
He promised that the government would take more ownership and control of key public services, singling out water for attention.
Separately, Mr Burnham responded to a question in the Commons, specifying that he will focus on farming and food production, seeing these as part of “sovereign production and manufacturing”.
IGD opinion
This represents a subtle change from previous statements, in which Mr Burnham promised only more control, not ownership. More information is promised in a new 10 Year Plan, to be delivered later in 2026.
It is still not clear exactly what is being proposed, but the government will need to tread a fine line, if it wishes to encourage private investment.
Few would be prepared to invest in a business without maintaining control over operational decisions.
Hottest summer ever?
The Met Office has issued a provisional statement, specifying that Summer 2026 was the hottest summer on record in the UK. Separately, the UN has issued a new report, saying that limiting global warming to 1.5oC is now impossible – the “best case” is 1.8oC above pre industrial norms.
IGD opinion
We have yet to see what this extreme weather will mean for food production and food pricing, but the El Nino event will not end with the arrival of cooler weather in the Autumn. UN forecasters suggest that it will continue until February 2027.
Typically, in the UK, El Ninos mean stormy wet weather in early Winter and cold dry weather in later Winter – both of which will also impact food production.
New study shows postcode lottery for pupils
A study by SchoolDash shows how local conditions can affect secondary education outcomes and life chances for pupils.
As might be expected, participation in key STEM subjects varies widely from place to place, as does final qualification.
This depends not only on income but also on other social measures, such as type of community - income is a powerful driver, but not the only one.
IGD opinion
This information will be of interest to government, as it seeks to drive social and economic progress in less affluent communities.
It will also be of interest to food and drink businesses that wish to support young adults as they move from education to work.
The most vulnerable individuals, with highest levels of NEETs are in areas classified by Gatsby as “Poor Urban” – mostly big cities, in the North of England.
The least vulnerable – and the least in need of support - are in “Affluent Suburban” areas, commuter-belt suburbs and small towns, mostly inland with long journeys to work.
Education outcomes vary by location – but access to work does not have to. See how IGD is working with industry partners to provide meaningful encounters with food and drink employers.
Geopolitics update
The US has announced a new deal, which will give a private US oil company access to 17 Venezuelan oil fields for up to 100 years. The fields have proven reserves of 65 billion barrels. The US Department of War will take a 35% stake in the company.
Meanwhile, conflict in the Persian Gulf continues, with no sign of abating – the US has attacked Iran once again, whilst Iran has launched strikes against several neighbours.
IGD opinion
Conflict in the Persian Gulf has now lasted long enough to raise risks for production and movement of food products in 2027 as well as 2026.
Farmers in the Northern Hemisphere will soon need to decide what to grow and how much fertiliser to order for the 2027 season.
These decisions will be regulated by the cost of fuel and fertiliser, with impacts on businesses further down the supply chain.