Bulletin: Eatwell, jobs outlook and food policy shifts

Middle east shocks heighten jobs risks  

The EY ITEM club, respected economic analysts, have issued new forecasts, suggesting that UK economic performance will weaken significantly in 2026 as a result of conflict in the Middle East and higher energy prices. 

They expect that employment will fall by about 163,000 in 2026, with job losses focused on the private sector. This would be a 0.4% drop in employment. Poorer regions will be most affected.  

Separately, a joint report by KPMG and the Recruitment & Employment Confederation shows that pay growth remained very weak in April. Recruitment to permanent positions has fallen, whilst recruitment to temporary roles has increased, implying that employers are being cautious about taking on staff at present. 

Read our latest article Middle East briefing: Food workforce impact.

IGD opinion 

This insight suggests a gloomy outlook for UK households and the businesses that serve them. There is high risk that high energy costs for production businesses will create complex knock-on effects as inflation spreads through commercial networks and ultimately into households. 

Risk of extensive job losses - or simply restructuring in the job market – is especially concerning. The situation for food and drink businesses may be slightly different, however. IGD stakeholders continue to report challenges in recruiting and retaining workers. 

If the employment situation does indeed continue to deteriorate, then food and drink employers may be in a position to offer roles to both young adults exiting education and older adults in need of new opportunities. 

However, both sets of potential employees may not be aware of the roles available in food and drink – this is what IGD’s Feeding Britain’s Future initiative is intended to address. 

Why Feeding Britain’s Future matters more in a slowing labour market 

As the economy cools, it may be tempting to pause workforce investment. But a weakening labour market can mask deep‑rooted structural issues and create a window to rebuild future talent pipelines. A softer jobs market does not remove the barriers that leave food and drink short of people and skills.  

Feeding Britain’s Future helps businesses act collectively, without each organisation reinventing the wheel. By reaching young people earlier, strengthening work‑readiness support and improving perceptions of the sector, the initiative helps protect future capacity and resilience. In a period of energy volatility and margin pressure, collaboration now can reduce long‑term recruitment risk and rebuild confidence at scale. 

Pledge support to Feeding Britain’s Future 2026. Email feedingbritain'[email protected] by 25 May 2026.

Delivering Eatwell – the change required 

Delivering the Eatwell Guide will require significant change across the food system. The Eatwell Guide sets out where our diet needs to get to; the IGD Eatwell Economics report sets out the challenges and opportunities to get there. 

For industry this means: 

• executing a health and sustainable diets strategy; 

• implementing healthier sales reporting across retail, manufacturing and out‑of‑home; 

• rebalancing supplier funding toward future demand; and 

• collaborating with government to align supply chains with Eatwell growth categories. 

The question is no longer whether change is needed, but the pace at which it can be delivered. 

Read the IGD Eatwell Economics executive summary article for more information. 

King’s Speech reaffirms food policy direction 

The King’s Speech set out the Government’s legislative agenda for the next parliamentary session, signalling priorities for the next 1–2 years. 

• Four Bills will impact the food industry, none delivering major surprises. 

• The European Partnership Bill will underpin a new EU deal, including proposed sanitary and phytosanitary (SPS) arrangements, aimed at simplifying food and plant movements and easing trade frictions. 

• The Small Business Protections (Late Payments) Bill will cap payment terms at 60 days for transactions involving SMEs. 

• A Competition Reform Bill will give the CMA faster and clearer powers over market reviews and mergers. 

• The Regulating for Growth Bill will strengthen regulators’ growth duties, potentially easing barriers to new food infrastructure. 

• The Speech also reaffirmed commitments to apprenticeships and tackling youth unemployment, while warning that key food policies – such as HFSS changes – may proceed via secondary legislation despite limited mention. 

See our latest article: What does the King’s Speech mean for the food industry? 

New push on surplus food redistribution 

The Prime Minister has announced plans for a new National Programme to Redistribute Surplus Food, following the King’s Speech. Co‑authored by IGD and the newly merged FareShare and The Felix Project, the sector‑wide plan aims to triple the volume of surplus food redistributed across the UK. Food businesses, charities, social enterprises, philanthropists, and government will work collectively to reduce waste and support communities, as demand for food support is expected to rise amid renewed food inflation pressures. See here for more details. 

UK growth picks up 

UK GDP grew by 0.6% in Q1 2026, marking the strongest quarterly expansion in a year. The Office for National Statistics said growth was driven by services, with production and construction also contributing.   

IGD opinion 

While the latest data points to a more resilient start to the year, growth is likely to remain weak over the rest of 2026 amid persistent cost pressures and global uncertainty. 

Food policy shifts in devolved nations 

Following last week’s elections, there are important implications for the food industry from the new Governments in Wales and Scotland. These devolved Governments are responsible for key policy areas including health, the circular economy, EPR and DRS.  

• In Scotland, the SNP was re‑elected and has pledged to introduce food price caps on essential items, though this would require UK Government consent and may instead be pursued on a voluntary basis. HFSS restrictions, vape display bans and agricultural reforms will also progress.  

• In Wales, Plaid Cymru is set to form a minority Government, with plans to develop a new national Food Strategy, phase out plastic packaging for fruit and vegetables, proceed with a separate DRS including glass, and strengthen support for Welsh food systems and farmers.