Director’s Weekly News – 10th July 2017

Economic News

CBI Economic Update: Surveys suggest economic growth has softened in June. In its third estimate of GDP, the ONS reaffirmed that the economy grew by a tepid 0.2% over the first quarter of 2017. This marks a sharp softening in momentum for the second half of 2016 when quarterly growth averaged 0.6%. The data continued to flag weak foundations for household spending, with real incomes falling for the third quarter running and the household savings ratio dropping to a new record low. Meanwhile, the CBI’s Growth Indicator showed that growth in the UK’s private sector had slowed in June. A fall in business volumes in consumer services and slower growth in distribution and manufacturing all contributed to the weakening in momentum. Private sector firms expect growth to pick up over the next three months. The CBI’s Growth Indicator chimes with the IHS Markit composite PMI for June, which eased to 53.8 from 54.3 in May. The softening was fairly broad-based across both the manufacturing and services sectors. Output in the construction industry – which is excluded from the weighted composite – also eased. The UK’s current account deficit widened a little in the first three months of the year (to -3.4% of GDP) after having narrowed sharply in the final quarter of 2016 (to -2.4% of GDP), driven by slightly larger deficits on trade and net investment income. However, by the standards of the recent past, the current account deficit remains relatively contained. Lending data for May showed that both secured and unsecured credit as well as mortgage approvals had continued to rise at a faster pace than nominal incomes. The pace of credit growth has been a source of concern for the Bank of England’s Financial Policy Committee, partly contributing to its decision to raise the counter-cyclical capital buffer by 50bp to 0.5% at its June meeting and signalled that it expected to raise it by a further 50bp to 1.0% at its next meeting in November in the absence of “a material change in the [the FPC’s] outlook”.

Brexit-CBI Uses Bread as Case Study in Call for UK to Remain Until Final Agreement: The speech in full can be found here

The relevant sections where bread is referenced are “Everyday products affected” and “transitional arrangements”, though bread is mentioned elsewhere.

FDF Publish report On Food and Drink in the UK Economy: FDF has announced the publication a report analysing the economic contribution of the Food and Drink Industry to the UK economy. This Grant Thornton work, commissioned by FDF, will be celebrated later today at FDFs Parliamentary Reception with Defra Secretary of State, Michael Gove. Full report:

Exec summary:

Other News

Date Labelling: On 6 July, WRAP (Waste & Resources Action Programme) launched a public consultation on their draft updated guidance for the use of date labels and related consumer advice (Annex 1), which they have been working on with the Food Standards Agency and Defra.

The consultation is now open to help shape the content, format and promotion of the new guidance and is available for review and comment until 3 August 2017, via an online survey. The response to the consultation will be reviewed with the intention of the new guidance being issued before the end of 2017.

Harvest predictions(From Nabim newsletter) If the weather remains favourable the start may be earlier than last year. It is never easy to predict yield and quality of the new crop. The UK wheat area has declined to just over 1.8 million hectares so an average yield is likely to produce a slightly smaller crop than last year, 14 to 14.5 million tonnes. The prolonged dry period in April may also impact on yield although the higher levels of solar radiation in May are likely to have assisted the production of quality traits. Crops were beginning to suffer from lack of rain in June but this was corrected in many localities towards the end of the month. As always, quality is impossible to predict until harvest takes place but AHDB will again be conducting its survey from early in the harvest period.

GLAA National Conference, 11 October 2017: The newly transformed Gangmasters and Labour Abuse Authority (formerly the GLA) is gearing up for their National Conference on the 11 October 2017.  This is an opportunity to get up to speed with the extended remit of the GLAA and its additional powers that are changing the way labour abuse and exploitation is tackled in the UK. The conference is taking place at the Edgbaston Cricket Ground, Birmingham and will include keynote addresses from the recently-appointed Director of Labour Market Enforcement Professor Sir David Metcalf, the UK’s first Independent Anti-Slavery Commissioner Kevin Hyland and the National Crime Agency’s Director of Vulnerability, Will Kerr among many others. Head to their website for more details and to book your place.

International Convention of Modern Bakery: Please note that the International Convention of Modern Bakery to take place in Paris on 12th October 2017.  An information flyer with further details and booking information International Convention of Modern Bakery 2017is attached.