Dear All,
Please note the FoB AGM and Conference which will be held on Wednesday, 23rd May at One Great George Street, London SW1P 3AA. This event will be a ¾ day business conference starting at 9.30am and finishing mid-afternoon. We are currently finalising the programme and further details will be published shortly but in the meantime please make a note in your diaries.
Gordon Polson – Director
Federation of Bakers
Economic News
CBI Economic Update: CPI inflation rate eases for the first time since June 2017.The UK inflation rate slowed in December, suggesting that upward pressure from the fall in the pound post-Brexit may have subsided. Meanwhile, surveys point to resilient growth in the fourth quarter of 2017 and manufacturing growth remains strong.
CPI inflation edged down to 3.0% in December 2017 (from 3.1% in November) – in line with consensus expectations. The decrease in headline CPI inflation was mainly driven by lower prices of recreational goods (mostly games & toys and audio-visual equipment). While air fares rose sharply in December (as they tend to at the end of every year) they still dragged on CPI inflation, because they now have a lower weight in the CPI basket compared to a year ago. December’s inflation data suggests that the upward pressure on prices from the post-referendum fall in the pound has likely peaked – as evidenced by the gradual fall in inflation in the most import-intensive parts of the CPI basket.
IHS Markit’s composite PMI remained broadly unchanged at 54.9 in December, compared with 54.8 in November. Overall, the average for Q4 (55.2) was above the average for Q3 (54.1), suggesting that economic growth may have ticked up a little towards the end of last year. The increase in the average composite PMI for Q4, along with the broad-based sectoral growth, chimes with the CBI growth indicator’s more positive performance for the quarter (+19% in the three months to December, compared with +11% in the three months to September).
The pick-up in the composite PMI was driven by the services sector PMI, which rose to 54.2 in December from 53.8 in November. The manufacturing PMI posted its strongest quarter in three years, despite easing to 56.3 in December from a 51-month high of 58.2 in November. The construction PMI (which is not included in the composite) slipped to 52.2 in December, from 53.1 in November. Despite the acceleration in activity, Markit reported signs that trends in business investment and hiring had deteriorated as companies delayed spending decisions pending greater clarity over Brexit.
Industrial production grew by 0.4% in the month to November 2017, in line with consensus expectations. This reflected both an uptick in energy output (due to colder than average temperatures in November) and continued growth in manufacturing output. Total production increased by 1.2% in three months to November, building further on the strong growth seen over much of H2 2017. Meanwhile, construction output contracted for the sixth consecutive rolling quarter (falling by 2%) – the fastest fall since August 2012. The accelerated fall in construction output in the three months to November was largely driven by decreases in private commercial work.
Brexit: The EU (Withdrawal) Bill completed its passage through the Commons last week, with the Government winning the final vote 324 to 295 – a majority of 29. The Bill now moves to the House of Lords for the final part of its legislative journey, which man be more difficult given the large number of Peers that would like to see Britain remain in the EU. The first day of the Bill’s debate is expected to be 30 January.
Other news:
Folic Acid: Tomorrow Tuesday Labour’s Lord Rooker will lead a short debate in the House of Lords on the advice of the Scientific Advisory Committee on Nutrition on the mandatory fortification of flour with folic acid to reduce pregnancies affected by neural tube defects, and whether the Government has made a decision on this advice.
Get an Industrial Placement Student in Your Business: The Graduate Excellence MEng program at Sheffield Hallam University is requesting applications for some vital industrial placements for their 2nd year students for 2018. Offering an industrial placement for a food engineering student gives you the chance to benefit from the skills and knowledge they must offer, and identify future talent for your business. For information on industrial placements, including key dates, salary advice, guidance for supervisors and more, contact Liz Berry at FDF who can send you the relevant forms. The application process for students is due to begin in the next weeks so we are looking for finalise places as soon as possible. If you are uncertain whether you can offer a placement at this time and need more time to consult with colleagues, please email Liz directly to discuss.
Food Industry Carbon Footprint: On Monday last week FDF published its annual Sustainability Progress Report, outlining the progress made by FDF members to deliver its Ambition 2025. The report shows that progress was made towards each of FDF’s environmental ambitions, including further reductions in CO2 emissions from manufacturing operations down 51 per cent in 2016 compared to the 1990 baseline. It is accompanied by case studies from FDF member companies Bettys & Taylors, Britvic, Coca-Cola European Partners, Mars, Matthew Algie, Mondelez International, PepsiCo, Pladis, and Warburtons. The publication of this report was accompanied by the public launch of FDF’s Sustainability Resource Hub, an online platform providing information on various sustainability tools that was previously only available to member companies.
Plastics: Last week, the European Commission published its plastics strategy setting out measures for national authorities and industry which it believes will help turn the vision for a circular plastics economy into reality. Of particular interest to industry is the Commission’s objective that by 2030 all plastic packaging placed on the EU market shall be reusable or easily recycled, meaning it can be recycled cost effectively. Other measures aim to stimulate demand for recycled content and increasing recyclability. In respect of food contact materials, the Commission is committed to swiftly finalise the authorisation procedures for over a hundred safe recycling processes, and in conjunction with EFSA, will also assess the safe use of other recycled plastic materials. Specifically on curbing plastic waste and littering; the Commission remains keen to see a reduction in the use of single use plastics and refers to the separate consultation on possible legislative and/or fiscal measures. Read the Commission’s press release on the strategy’s launch here.