Economics bulletin 15 July

Date : 14 July 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 the Ukraine crisis, the rising cost of living, labour shortages, COVID-19 and adapting to a new relationship with the EU.

Economic woes worsen (fast)

Understand our latest views on the outlook for the UK economy, the likelihood of a recession in 2022 and how consumers are adapting in the midst of the cost of living crisis.

Register your place for our upcoming Viewpoint webinar at 11 a.m. on Thursday 21 July here.

Rising GDP masks recession concerns

Economic activity between April and May increased by 0.5%, ahead of expectations. Health and social care spending was the key growth contributor.

A drop in spending for retail, recreation and eating out over the month indicates weakening consumer confidence and falling spending power. For further insight, please watch our latest video here.

Retail sales falling

Helen Dickinson OBE, Chief Executive of the British Retail Consortium has stated that “Volume sales are falling to a rate not seen since the depths of the pandemic.”

Volume food sales declined in June, as shoppers felt the impact of rising inflation. IGD’s Shopper Confidence Index reached a new low in June, suggesting the retail environment is likely to remain tough in the coming months as shoppers contend with the cost of living crisis.

For further insight, please see here.

Energy price cap to be higher

Ofgem has confirmed that it expects the average annual household bill to be higher than its previous forecast of £2,800. Independent analysts are predicting that the average household bill will rise to over £3,200. Ofgem will announce the autumn energy price cap towards the end of August.

This week, 8 million of the most vulnerable households have begun to receive the first of two Cost of Living Payments. Households will receive £650 over two payments in July and later in the year.

COVID rates rising

At the end of June, over 2.7 million people across the UK were estimated to be infected with COVID-19, an increase of 18% compared to the previous week.

The number of hospitalisations is increasing across all age groups. Reported absence rates, which remain relatively low currently, are expected to increase in the short term.

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