Economics bulletin 10 November

Date : 09 November 2023

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, conflicts in Ukraine and the Middle East, labour shortages, policy developments and adapting to a new relationship with the EU.

Recession risk

The ONS has reported that GDP increased by 0.2% in September 2023, following an increase of 0.1% in August. GDP showed no growth (0%) in the three months to September 2023 compared to an increase of 0.2% in the previous quarter. Food store sales volumes increased by 0.2% in September 2023 following a rise of 1.4% in August.

IGD Viewpoint: The latest data from the ONS confirms that the future path of the UK economy remains uncertain. The impact of relatively high interest rates is helping to bring down inflation slowly. However, it is also having an impact on consumer spending. Many consumers are still feeling financial stress as mortgage arrears are increasing. The current short to mid-term outlook is for low or zero GDP growth, but there is a risk of recession (two or more quarters of contraction), especially in the event of a new financial or economic shock.

Register now for our next Viewpoint webinar on 16 November where we will discuss the economic outlook, changing consumer sentiment and the policy landscape ahead of 2024.

Powering growth

Despite the bleak forecasts by the Bank of England concerning the outlook for the economy, this does not mean there is no opportunity for growth. Wage growth has begun to outpace inflation, meaning that the real value of wages is rising once more.

We have identified key growth opportunities for the food and consumer goods industry in both the retail and eating out markets.

The food and consumer goods industry will need to play its part and provide opportunities for growth across the UK.

Read our full analysis.

Energy prices

Independent analysts have predicted that the energy price cap for a typical dual fuel direct debit household will rise to £1,897 per annum compared to £1,834 currently. This rise is mainly due to higher wholesale prices.

Ofgem is due to review the price cap in November 2023 for the January update.

Tobacco and vapes legislation

The King’s Speech included plans to introduce a Tobacco and Vapes bill. This will ensure that children born after 1 January 2009 will “never be able to be legally sold cigarettes”. This will raise the age of sale by one year each year. The government will be consulting on new regulations to reduce the appeal and availability of vapes to children. The bill also includes new powers “to fine, on the spot, rogue retailers who sell tobacco products or vapes to people underage.”

Reusable packaging report

A new report from IGD’s Sustainability team ‘How to help consumers adopt refill on the go’ provides new insight to help businesses better understand the opportunities to communicate with consumers and help them adopt refill on the go.

The report includes key findings and recommendations from communication trials with three UK retailers promoting refill on the go.

Download the free Reusable packaging report here.

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Our round-up of the latest economic and political news, focused on FMCGs