Dear All,
Detailed below is the Weekly News for 16th April
FoB Conference: Just a quick reminder to book for this year’s FoB Conference on 23rd May.
For further information please visit our bookings page on the FOB website: https://www.fob.uk.com/event/fob-agm-and-annual-conference-23rd-may-2018/
Or use the buy tickets link at the bottom of this email.
Have a good week.
Gordon Polson – Director
Federation of Bakers
NOW BOOKING: FOB Annual Conference 23 May 2018 at One Great George Street, London SW1P 3AA
Economic News
CBI Economic Update: The “Beast from the East” negatively impacts UK economic activity.
The CBI’s latest Industrial Trends Survey (ITS) revealed that manufacturing output growth eased in the three months to March, but remained firm compared with historical averages. While total export order books softened slightly, export order books remained strong. However, export orders are down from the multi-year highs seen in recent months, tentatively suggesting that the competitiveness gains from the fall in the pound may have peaked.
The CBI’s latest survey data and member anecdotes give an early insight into the impact that March’s bad weather has had on economic activity. The recent cold snap seems to have affected the High Street, with the CBI’s Distributive Trades Survey (DTS) showing that retail sales fell in the year to March, for the first time in five months. Growth in online sales also slowed sharply (to the lowest level since the series began in 2009), which may have been down to transport disruption hampering deliveries.
The hit from the bad weather comes at an already tough time for retailers, as the squeeze on household incomes bites on consumer spending. Although real earnings growth (deflated using CPIH) edged into positive territory (0.1% y/y) in the three months to January for the first time in a year, it’s important to remember that they essentially remain flat. Although the CBI expects the squeeze on household incomes to ease somewhat further, any pick up is likely to remain tepid compared with pre-crisis levels.
Alongside retail, the construction industry and its supply chain also reported widespread disruption from the colder weather. Anecdotal estimates so far point to two to five days of lost output over this period, with most projects unable to catch up on this lost work. IHS/Markit’s construction PMI revealed the fastest decline in construction output since July 2016, with the sector noting that bad weather disrupted staff availability and activity on site. Likewise, the IHS/Markit’s services PMI revealed the weakest performance since July 2016. Anecdotal evidence from the services sector highlighted that the unusually bad weather had disrupted business operations and contributed to slower consumer spending. In addition, there were some reports that Brexit-related uncertainty had led to delayed decision-making and risk aversion among clients.
Taken together, this suggests that the UK can expect a small hit to GDP growth over Q1 2018. Much depends on the degree of offset from other sectors – for example, colder-than-usual weather tends to boost energy output. As an illustration, the Bank of England believe that the bad weather will reduce GDP growth by 0.1 percentage points (with their forecast for Q1 growth currently at 0.3% – consistent with what the PMIs are pointing to for Q1 growth).
Brexit(1): CBI sets out A-Z guide on the EU rules that matter most to business.Smooth operations, the CBI’s new Brexit report, provides negotiators with unparalleled economic evidence from 23 industry and services sectors.
In order to ensure the EU negotiations are rooted in economic evidence, the CBI has published a new piece of research – Smooth operations – on the regulatory needs of 23 industry and service sectors in the UK. Over the past few months, Ministers and civil servants have increasingly been asking the business community to provide more detailed evidence of what they need for the final deal, including on the future of rules and regulations. This new report is one of the CBI’s steps to bring that detail and fact-based evidence to the table.
Headline messages from the report
The analysis is based on evidence from thousands of UK businesses of all sizes and sectors, as well as dozens of leading trade associations, and seeks to provide negotiators with the evidence on where businesses want to stay closely aligned to EU rules and where they do not.
An important finding of the report is that changes to rules in one sector have significant knock on effects for companies in other sectors and throughout supply chains. Whilst the report acknowledges the UK will no longer have the same say in EU rule-making as member states, new mechanisms will be needed to manage alignment and for the UK to influence rules that affect it.
Based on the findings, the CBI has devised three principles that should guide both UK and EU negotiators:
- Where rules are fundamental to the trade or transport of goods, the UK and EU must negotiate ongoing convergence.
- As part of the new relationship, negotiators should set a new international precedent for liberalising trade in services and digital products.
- Alignment will need to come with mechanisms for influence and enforcement that benefit both sides. Cooperation will be vital to ensure that regulatory systems match sufficiently to enable frictionless trade.
The evidence from companies across the country will be essential in the months ahead to ensure that negotiators understand the complexity of rules and the effects that even the smallest of changes can have on businesses. A major acceleration in the partnership between business and the UK Government is now required to make a success of Brexit. The CBI will be doing all it can to ensure the business voice is heard by policy makers, who will set the future direction of our economy for generations to come.
Brexit(2): FDF has created a toolkit for members on Settled Status for EU nationals in the UK once we leave the EU.
The toolkit explains what Settled Status is, who can apply and what they will be entitled to, how to apply and what happens to those arriving during the transition period.
The toolkit can be found in the members section here: https://www.fdf.org.uk/membersonly/settled-status_toolkit.aspx?tr=22DaZ7T
Brexit(3): The Recruitment and Employment Confederation (REC) have launched a research project focusing on the supply of EU temporary and seasonal workers post-Brexit. We would encourage FDF members are encouraged to participate in REC’s survey. This research aims at delivering a clear, evidence-based picture of EU nationals contributing to the UK economy in key sectors. It will inform the Brexit negotiations and the UK government of the precise need for EU temporary and seasonal workers so that appropriate provisions are made. To complete a short survey of 8 questions please click here.
TV Programme: Processed Food: What Are We Eating? Tonight (Thursday ITV, 19:30), the British nation relies heavily on processed food, with tinned vegetables, packaged meats, cakes and biscuits, bread and ready meals all being eaten on a regular basis. But how much do people really know about what they are eating? Fiona Foster investigates.
Transport: Cleanest lorries will pay less to use UK roads: The HGV Road User Levy which was introduced in 2014, as a measure to ensure lorries pay a charge to cover the greater wear and tear they cause to road surfaces than other vehicles. According to new legislation, lorries meeting the latest Euro VI emissions standards will be eligible for a 10.0% reduction in the cost of the Heavy Goods Vehicle (HGV) levy from feb’19. Such change to the levy will further incentivise the industry to choose less polluting lorries. The cleanest lorries generate 80.0% less nitrogen emissions than dirtier ones. Those lorries that do not meet the latest emissions standards will be expected to pay 20.0% more. When the change comes into effect, more than half of UK vehicles will pay less. As increasing numbers of companies move to cleaner lorries, the UK haulage industry overall will pay less. The HGV levy is just one element of the government’s £3.5bn programme to clean up the air and reduce emissions, which includes £255.0m for councils to improve air quality and a dedicated clean air fund of £220.0m for those local areas with the biggest air quality challenges. Jesse Norman, Roads Minister stated that the government is committed to improve the air and to deliver a green revolution in transport. He further added that heavy goods vehicles account for around a fifth of harmful nitrogen oxide emissions from road transport, but they only travel 5.0% of the total miles. Hence, changing the HGV Road User Levy will encourage firms to phase out the most polluting lorries and bring in the cleanest ones. (From The Chartered Institute of Logistics and Transport)
Apprenticeship Levy: Free webinar: Transferring Levy funds to another employer: Levy Paying employers are now able to transfer up to 10% of their unused funds to another employer. EEF is hosting a free webinar with the Education and Skills Funding Agency on Tuesday 1st May 2018 which will take you through the process step by step. It will be of interest to both those Levy payers who may want to transfer funds to another employer and to those Levy and non-Levy payers who may want to receive funds from another employer.
For more information and to book your place click here.
Groceries Code Adjudicator Annual Survey 2018: last chance to have your say. The GCA’s annual survey closes soon (Sunday 22 April). The GCA considers it vital to get the views of as many direct suppliers to the ten regulated retailers as possible. The survey is a really important source of information and it helps THE GCA to determine where to focus her priorities in the year ahead. Filling in the survey should only take 10 minutes. www.yougov.com/GCA The results of the survey will be launched at the GCA annual conference on 25 June in Westminster, London. Registration for the conference is now open on the GCA website and there is a link at the end of the survey.