Economic News
CBI Economic Roundup: Unemployment falls further, whilst Bank of England maintains the Bank Rate at 0.25%.Our regular roundup of the key economic indicators. At its February meeting, the Bank of England’s Monetary Policy Committee (MPC) voted 8-1 to maintain the Bank Rate at 0.25% and unanimously for no change to the extension of quantitative easing announced at its August meeting last year. Outgoing external member Kristin Forbes voted to hike the Bank Rate to 0.5% and some others struck a more hawkish tone, with the minutes stating that “some members noted that it would take relatively little further upside news… for them to consider that a more immediate reduction in policy support might be warranted.”
Results of the Labour Force Survey showed that employment rose by 92k in the three months to January to 31.9mn. Unemployment fell by 31k over the same period, bringing down the unemployment rate to 4.7%. But real average earnings growth – pay adjusted for CPI inflation, excluding bonuses – was flat on a year ago (the weakest outturn since mid-2014) as nominal wage growth continued to edge lower against a backdrop of higher inflation.
Industrial production made a weak start to 2017, falling by 0.4% month-on-month in January following a 0.9% rise in December, albeit beating consensus expectations for a slightly steeper decline (of 0.5%). Weighing most on industrial production was a 0.9% fall in manufacturing output, though this was driven by the volatile pharmaceuticals sector, as some of strength at the end of 2016 unwound. Still, the rolling quarterly momentum actually strengthened with January’s outturn and excluding pharma results in output rising by 0.3% in January on the month.
Construction output fell 0.4% on a monthly basis in January after having risen 1.8% in December. Weakness in housing (both new work and repair & maintenance) was the main driver of the decline. But as with manufacturing, the underlying trend in construction output was stronger: on a 3m/3m basis, construction output grew by 1.8%, with growth having been picking up since October 2016.
Inflation: Rising fuel and food prices helped to push last month’s inflation rate to the highest since September 2013. Inflation as measured by the Office for National Statistics’ Consumer Prices Index (CPI) jumped to 2.3% in February – up from 1.8% in January.
The increase has pushed the rate above the Bank of England’s 2% target. Food prices recorded their first annual increase for more than two-and-a-half years, standing 0.3% higher in February than a year earlier. The Bank of England has said it expects inflation will peak at 2.8% next year, although some economists think the rate could rise above 3%.
The Brexit vote last June prompted a steep fall in the value of the pound, making imported goods more expensive.
Consumer squeeze? This month, the ONS has started to promote its preferred inflation statistic, CPIH, which includes a measure of housing costs and council tax. This was also measured as growing at a rate of 2.3% in February.
The Retail Prices Index (RPI) measure of inflation rose to 3.2% in February from 2.6% the month before.
At the last week’s meeting of the Bank of England’s interest rate setting committee, one member voted for interest rates to rise to curb the threat of inflation.
But despite inflation standing above the 2% target, some economists do not expect interest rates to rise any time soon.
Inflation is now running at the same rate as growth in wages, putting pressure on household income and spending.
Other News:
#betterwithbread Campaign: The FOB/FAB 2017 PR campaign launched this week. This year the nations bakers have teamed up with clean-eating satirist Deliciously Stella to create a series of tongue-in-cheek Instagram videos, showing what life would be like if we didn’t eat bread. The spoof films are their latest campaign celebrating the health benefits of the much-loved food and showing the ridiculous reality of cutting bread out from our everyday meals (avocado on toast, jam on toast and boiled eggs & soldiers).
The films have been created to challenge the clean-eating trend that has wrongly demonised eating bread. It comes off the back of new research that reveals two fifths of young women cut out bread to maintain a healthy weight (41%), nearly half (47%) believe it’s an unhealthy source of carbohydrate and only a fifth (22%) are aware that it’s a low salt and low sugar food.
The #BetterWithBread campaign research also found that despite the popularity of the clean-eating lifestyle, a quarter of young women admit they find the trend annoying, as it puts unrealistic pressures on them and makes them feel guilty about their current diet (20%).
The series of three videos ‘Deliciously Stella’s World Without Bread’ can be viewed on Bella’s Instagram feed @DeliciouslyStella view on a mobile, through the instagram app (on @DeliciouslyStella), where the video will start playing automatically when you scroll onto it
or the Bakers and Millers of Britain’s twitter handle @WeHeartBread. (NB Browser specific) or download the video here and watch it on your computer https://we.tl/SOqLUk4mj3
CASH Salt Awareness Week: Consensus Action on Salt and Health (CASH)’s National Salt Awareness Week (http://www.actiononsalt.org.uk/awareness/Salt%20Awareness%20Week%202017/179718.html) is taking place this week. The theme for this year’s Salt Awareness Week is ‘Salt: The Forgotten Killer’.
As part of the week, there will be a Parliamentary Reception taking place on Tuesday 21st March. A press release from CASH giving details of a survey of salt levels in a wide range of foods highlighted bread rolls as the only product likely to meet the 2017 salt reduction targets.
The Groceries Code Adjudicator (GCA): is running its annual survey, collecting views of suppliers on the compliance of the UK’s ten largest grocery retailers with the Groceries Supply Code of Practice (GSCOP) as well as on awareness of the GCA’s role and training. The survey is a great opportunity to tell the Adjudicator in confidence how retailers are complying with GSCOP, while helping to identify the GCA’s priorities for the next year. Please respond to the survey at http://www.yougov.com/gca by Monday 17 April 2017. The results will be shared at the 2017 GCA Conference on 26 June at Church House Conference Centre, Dean’s Yard, Westminster SW1P 3NZ. You are invited to register for a place at this event at https://form.jotformeu.com/70302978904359
Please respond to the survey at http://www.yougov.com/gca.
Scientific Advisory Committee on Nutrition (SACN) Meeting 16th March: It is worth noting that the PHE representative at the meeting (Louis Levy), said that PHE was still working to publish a sugar reduction report by 31 March. There will also be a PHE paper on the definition of free sugars published ‘in the coming months’.
Three main streams of SACN’s work were discussed:
- SACN reviewed a risk / benefit analysis on use of potassium based sodium replacers after developing this in tandem with the Committee on Toxicology. The advice will be published soon.
- SACN received an update from its subgroup reviewing the evidence on saturated fat and health. There will be a public consultation on a report in October, which will cover the role of saturated fat in type II diabetes, cancer, cognition and cardiovascular disease. The final report will be published by the end of 2017.
- Earlier that day, SACN also held a closed session to discuss its review of the evidence on folic acid. The review is in the context of providing advice to Food Standards Scotland, which is considering mandatory fortification of flour in foods sold in Scotland.
Folic Acid: The Commons will hold the second reading of a number of Private Members’ Bills on Friday , including the Sugar in Food and Drinks (Targets, Labelling and Advertising) Bill, the Feeding Products for Babies and Children (Advertising and Promotion) Bill, and the Bread and Flour Regulations (Folic Acid) Bill. These are all fairly far down the list of PMBs and so are very unlikely to be read a second time. If MPs do not reach them the bill is either killed off or its date for Second Reading is moved.
UK Food Chain Workforce Survey – Extension on Deadline 27th March. Trade associations representing the UK food and drink supply chain are consulting with their members to establish industry’s priorities from a labour and workforce perspective.
FDF has compiled a survey with our supply chain partners with the aim of informing a coherent, evidence-based food chain perspective on workforce issues, in preparation for UK negotiations on exiting the EU.
You are invited to share your views on the questions in this link by 27th March:
https://www.surveymonkey.co.uk/r/8LRDXZV
All responses will remain strictly anonymous. If you work for a multinational business, we are keen to know views from a UK perspective.
A pdf copy of the survey can be downloaded here:
https://www.fdf.org.uk/membersonly/general/UK-Food-Chain-Survey-Mar2017.pdf?tr=221Ku5a
Other Events:
Book now for the ALP Roadshow 2017: Roadshows are free to ALP members and their clients and to all suppliers to the retailers. Entitled All Clear?, this years’ roadshows include the launch of Clearview – the global labour provider certification scheme; the latest news on Brexit and labour mobility; a full legal update on labour issues; tackling modern slavery – moving from awareness to action; what next for the GLAA and labour market exploitation and lots more.
Dates and venues below. To book, please click here.
Click here for further information including the event programme.
| Date | Region | Venue |
| 25th April | West Country | Holiday Inn Taunton, Deane Gate Avenue, Taunton, TA1 2UA |
| 27th April | Midlands | Park Inn Birmingham West, Birmingham Road, West Bromwich, B70 6RS |
| 2nd May | Scotland | Pentland Suite, Royal Highland Centre, Ingliston, Edinburgh EH28 8NB |
| 9th May | London | Hammersmith Jobcentre, 22 Glenthorne Road, Hammersmith, London W6 0PP |
| 11th May | North West | Brabners LLP, 55 King Street, Manchester, M2 4LQ |
| 23rd May | East | Urban Hotel, Swingbridge Road, Grantham, NG31 7XT |
AIBI 35th Congress 2017: You can find the Congress website at: http://jp.sitefeb.com/en/
For entering into the online – registration, please use the following passwords:
e-mail: congres@aibi.eu
password: AIBI2017
We are looking forward to this “TOP BAKERY EVENT 2017” in Versailles/France.