Dear All,

Detailed below is the Weekly News for 25^th June.

Its getting hot, not great for bakeries, but have a good week.

Gordon Polson

Director – Federation of Bakers

Economic News

CBI Business surveys show modest improvement in Q2 growth: Overall, business surveys point to a slightly stronger (albeit still tepid) growth over Q2 so far, after a weak Q1. Meanwhile, retail sales saw a lift in May from the Royal Wedding and good weather. However, while real earnings are slowly recovering, they remain low by historical comparison, which is continuing to hit consumer-facing sectors hard.

The second estimate of Q1 GDP growth was left unchanged at 0.1%, disappointing hopes that some of the weakness at the start of the year would be revised away. Nevertheless, business surveys for Q2 so far point to stronger growth than in Q1, although are still consistent with fairly tepid momentum overall: notably, the CBI’s growth indicator picked up in the three months to May after output growth slowed to the weakest since September 2016 in the quarter to April.

The services PMI also picked up in May, with many service providers citing a catch-up from the snow-related disruption seen in Q1. The manufacturing PMI edged higher, although this was mainly down to the steepest build-up of finished goods inventories in the survey’s 26-year history, and a sharp reduction in backlogs of work. The May construction PMI signalled a modest improvement (unchanged from the April reading), after the PMI fell into contraction territory in March. Some firms cited that unusually good weather conditions had supported activity and enabled them to continue catching up after prior months’ weather-related disruption.

But official data for Q2 so far has been weak. Industrial production declined by 0.8% in April, the steepest fall since February 2017 (excluding December 2017, when a one-off shutdown of the Forties oil pipeline significantly dragged oil production). The reading was well below expectations of 0.1% growth, and well below average growth of 0.2% per month recorded over the last 12 months. Manufacturing output growth turned negative in April on a three-month-on-three-month basis (a better gauge of the underlying trend), for the first time since May 2017. However, prospects for the rest of Q2 look better: alongside the pick-up in the May manufacturing PMI, the CBI’s latest Industrial Trends Survey showed a strong pick up in output and order books in the three months to June.

In contrast, warm weather and the Royal Wedding celebrations supported retail sales in May, which rose by 1.3% on the month. Some of the pick-up in retail sales was also likely due to consumers having previously delayed purchases due to the cold weather in March. Nevertheless, conditions remain tough in the sector with real household earnings still weak historically, over-leveraging and deeper structural issues such as digital disruption.

Following three months of decrease, CPI inflation remained unchanged in May, at 2.4%, the joint-lowest since March 2017. However, only the transport component of CPI kept inflation from falling further – reflecting a combination of rising global oil prices, and the later timing of Easter this year distorting air and sea fares.

Nominal regular pay growth (excl. bonuses and before adjusting for inflation) was 2.8% on the year in the three months to April 2018, down marginally (by 0.1% pts) on March. Despite this softening in nominal wage growth, the falling inflation over April meant that real wages grew year-on-year for a second consecutive month on a three-month rolling basis. But real wage growth remains weak by historical comparison, which continues to put pressure on household spending.

Other News

GOVERNMENT ANNOUNCES NEW MEASURES TO HALVE CHILDHOOD OBESITY BY 2030: The government press release on the launch of Childhood Obesity Chapter 2 is detailed below.

• • Jeremy Hunt announces package of measures to halve childhood obesity by 2030
  • Plans include consulting on mandatory calorie labelling on menus and on banning the sale of energy drinks to children.
  • Primary schools will be encouraged to introduce an ‘active mile’ initiative, such as the Daily Mile, with additional funding to support cycling and walking to school.

New measures to halve the number of obese children by 2030 have been announced by Health and Social Care Secretary Jeremy Hunt today.

Building upon the world-leading first chapter of the Childhood Obesity Plan, the new measures include proposals to mitigate ‘pester-power’ by preventing stores from displaying unhealthy food at checkouts or including it in buy-one-get-one-free deals.

We will consult on introducing clear, consistent calorie labelling on menus in restaurants, cafés and takeaways, so parents can make an informed choice about what their families are eating, and on banning the sale of harmful, caffeine laden energy drinks to children. A quarter of 6-9 year-olds consume these energy drinks, which have as much caffeine as a cup of coffee.

The Government is also today calling on industry to recognise the harm that constant adverts for foods high in fat, sugar and salt can cause, and will consult on introducing new TV and online advertising restrictions to prevent children from being targeted by these unhealthy products, and to incentivise companies to reduce the sugar and calories in the products they sell.

This could include extending the current advertising watershed and considering limiting the number of unhealthy food adverts shown during programmes children watch to 9pm. There is evidence that popular family television programmes can be saturated with adverts for products high in sugar, fat and salt, and there is a clear link between these adverts and children eating sugary and fatty foods.

Jeremy Hunt, Secretary of State for Health, said:

“Parents want what is best for their children, but keeping them healthy and active can be difficult.

“It is near impossible to shield children from exposure to unhealthy foods. Parents are asking for help – we know that over three quarters of parents find offers for sugary sweets and snacks at checkouts annoying. It’s our job to give power to parents to make healthier choices, and to make their life easier in doing so.

“The cost of obesity – both on individual lives and our NHS – is too great to ignore. Today we are taking steps to ensure that by 2030, children from all backgrounds have the help they need for a healthier, more active start in life.”

As announced by the Prime Minister this week, the NHS will receive increased funding of £20.5 billion a year in real terms by 2023-24 compared to today to support a new 10 year, long term plan.

A priority in the long-term plan is a renewed focus on prevention so people can live longer, healthier, happier lives and take greater responsibility for their own health and care. The measures announced today will play a key role in making this happen and are designed to make it easier for families to eat more healthily.

The updated plan also promotes a new national ambition for every primary school to adopt a daily ‘active mile’ initiative, such as the Daily Mile. This is supported by £620,000 funding for Living Street’s Walk to School project, as well as £1 million to support the Department for Transport’s Bikeability cycling training programme, expected to fund an additional 25,000 training places.

Steve Brine, Public Health Minister said:

“One in three children are now overweight or obese by the time they leave primary school. Dangerous overconsumption, combined with reduced activity, is having a catastrophic effect on our children’s health, limiting their potential and putting them at risk of a shorter life.

“We all have a responsibility to act before we lose a generation of young people to this entirely avoidable epidemic. We can’t afford to waste time, which is why we’re committing to halve obesity in the next twelve years with bold new action.”

Professor Dame Sally Davies, Chief Medical Officer for England said:

“This is a strong, robust and bold chapter 2 which will help children live healthier lives and support parents across the country.

“This series of measures will undoubtedly help shift the balance towards a healthier environment.”

Duncan Selbie, Chief Executive at Public Health England (PHE), said:

“Reversing this epidemic is possible provided everyone pulls together and the bold steps announced today will help turn the tide. No other country in the world is tackling this in such a comprehensive way.”

The plan acknowledges that childhood obesity is a complex issue and while parents are responsible for protecting children from obesity, there is a role that Government can and should play.

The latest figures show that one in three children are now overweight or obese by the age of 11, with children from deprived areas more than twice as likely to be overweight, and being obese or overweight can lead to illnesses such as Type 2 Diabetes and liver disease.

To tackle this, Government is also committing to setting up a three-year trailblazer programme with local authority partners to help close the deprivation gap, looking at what can be achieved within existing powers and better understand what could be fuelling obesity in specific communities.

Minister for Children and Families Nadhim Zahawi said:

“We want every child to be happy and healthy throughout their education and beyond. But the reality is that by the time they leave primary school one in three children will be overweight.

“Parents and teachers are already doing great things to encourage children to be active – today’s announcement is about giving them extra support to build on this. By inspiring every child to walk or run a mile every day, or to take part in a sports club, we will not only improve their health but will help them to make healthier choices throughout their lives.”

The plan follows a report from Public Health England last month which showed industry has made an encouraging start towards reducing the amount of sugar in foods regularly consumed by children.

However, the Government has been explicit that they will continue to monitor industry progress on reformulation until 2020 and have not ruled out further fiscal or mandatory action if needed. New plans include a commitment to extend the Soft Drinks Industry Levy to milk-based drinks if sufficient sugar reduction is not seen.

Sir Harpal Kumar, Cancer Research UK’s chief executive, said: “We congratulate the Government on putting forward this bold plan, demonstrating its commitment to address one of the most significant health challenges of our time. Once implemented following the consultation, the proposed restrictions on junk food advertising will make an enormous impact on childhood obesity rates.

“More than 60 cancers are diagnosed daily in the UK due to excess weight, and our research has shown that young people are more than twice as likely to be obese if they remember seeing a junk food advert every day. Children who carry too much weight are five times more likely to be obese adults, putting them at risk of many diseases, including several types of cancer.

“The Government now needs to be steadfast in taking forward these measures with urgency and determination.”

CO2 Shortages: If you have any concerns regarding supplies the government are anxious to heart from you by answering the following questions and sending your reply direct to Defra.

General questions:

1. What are the timescales around CO2 running out? What are the short and medium-term impacts.
2. What are the timescales around certain products running out on shop shelves?

There are also abattoir specific questions which do not appear to relevant to our members but for transparency are as follows:

Meat specific questions:

1. We would welcome some more granular information on poultry and pig abattoirs as below.
2. How many have had to stop slaughtering because of a shortage of CO2? What throughput is affected.
3. How many have switched their method of stun? What is the impact on throughput
4. How many anticipate running short of CO2 in the next week? What will be the impact on throughput?

To answer these questions directly a central Defra email account, has been created at the following account: foodresilience@defra.gsi.gov.uk .

Wheat Yields: have been revised down by 2.4% since may as a  result of warm weather across Europe according to the EC crop Monitoring report. In the UK the weather has been described as favourable. UK wheat is forecast at 8.16 t/ha just below the five-year average.

Folic Acid: A new All Party Parliamentary Group(APPG) on Mandatory Fortification of Folic Acid has been formed and its inaugural meeting is due to take place this week. I have made contact with them to try and find out what their activities are likely to be.

Food Waste: Have you heard of OLIO? They’re a food sharing app (a bit like the FreeCycle for food) and they connect neighbours and local food retailers so food can be eaten, not wasted. They currently have over half a million people signed up  all over the world, sharing food and keeping waste at bay. OLIO also has a Food Waste Heroes programme, where volunteers collect unsold food from stores, bakeries, markets, catered events – and redistribute it to the community via their app. If you would like to know more about OLIO and their food sharing platform or know a business that would benefit from this solution, please email volunteer@olioex.com.