IGD - Economics bulletin 19 November

Date : 18 November 2021

Your overview of political and economic news with a focus on the food and consumer goods industry, featuring the latest developments and guidance on COVID-19, labour shortages and adapting to a new relationship with the EU.

Rising inflation

New inflation data from ONS, covering October 2021, shows that inflation continues to increase. “All items” inflation for October was +4.2% year-on-year, when measured using the CPI measure – this is above the target range set for the Bank of England’s Monetary Policy Committee (MPC) and the highest level since November 2011.

CPI inflation for food and non-alcoholic drink, while much lower at +1.3% year-on-year, has been positive for the last three months and is at its highest level since May 2020. We explore the causes and consequences of rising inflation for food and consumer goods businesses in a special report.

Rising inflation is not a surprise – it has been anticipated for some time. Official forecasts indicate that this trend has further to run. The Office for Budget Responsibility predicts that inflation will peak at about 4.4% in Q2 2022, while the Bank of England suggests +4.8% in Q2 2022.

UK-EU negotiations update

There remains speculation that the UK government may trigger Article 16 of the Northern Ireland Protocol - the process for taking unilateral "safeguard" measures if either the EU or UK concludes that the Northern Ireland protocol is leading to serious practical problems or causing diversion of trade.

In a more upbeat tone, Lord Frost stated this week that “I would like to progress this as fast as we possibly can, I'm glad there's ambition on the EU side. I think it can be done, whether it will be done is a different question.”

The UK government is also in negotiations with France and the EU to resolve a dispute over post-Brexit fishing rights. France had threatened a series of measures that may have led to a ban on British trawlers landing their catches in French ports and tighter customs checks on cross-Channel trade.

Preparing for EU-GB trade from 1 January

Businesses are encouraged to access a series of webinars to help them prepare for changes to the rules regarding imports from the EU to GB from 1 January 2022.

See the Key dates for UK-EU transition and support for businesses

See the guidance on trade with the UK as a business based in the EU.

COVID-19 update

Against a backdrop of relatively high COVID-19 cases in Scotland, the First Minister has said that the expansion of the COVID-19 vaccine passport scheme to more hospitality venues, theatres and cinemas is under consideration. A final decision will be made on Tuesday 22 November.

See the latest COVID-19: Scotland’s Strategic Framework Update.

The Prime Minister has stated that he sees no need at the moment to move to a "Plan B" of the Autumn and Winter Plan 2021 in England. The move to Plan B would include introducing mandatory Covid passports, making face coverings compulsory and advising people to work from home.

Labour shortages update

All relevant businesses have up until 01 December for temporary visas for HGV food drivers. 800 pork butchers have until 31 December for visas from the existing allocation in the Seasonal Workers Pilot Scheme, allowing them to travel and work in the UK for a period of 6 months.  See here for more details.

New strategy to boost exports

The Department for International Trade has launched a new ‘Made in the UK, Sold to the World’ plan to help businesses double exports.

The plan includes an Export Support Service that provides one-stop shop for exporting advice and a new UK Tradeshow Programme for businesses to attend and promote their products around the world.

See here for further details.

Consultation to reform AHDB

The government is seeking views on proposals to reform the Agricultural and Horticulture Development Board (AHDB) to deliver greater accountability and value for money. The consultation runs to midnight on 10 January 2022.

Avian flu update

The Chief Veterinary Officers from England, Scotland and Wales have declared an Avian Influenza Prevention Zone (AIPZ) across the whole of Great Britain. This means it is a legal requirement for all bird keepers in Great Britain to follow strict biosecurity measures to help protect their flocks.

A harsh winter ahead

Download a free copy of IGD’s newly published Viewpoint: A harsh winter ahead? report. Register for our free webinar on 11 November here  

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