Economic News

CBI Economic Update: Pace of growth cools in June. Growth in the UK’s private sector slowed slightly in the three months to June, according to the latest CBI Growth Indicator.

The composite measure, based on 677 respondents across the distribution, manufacturing and service sectors, showed the balance of firms reporting a rise in output at +6%, down from +10% in the three months to May.

The mild slowdown was driven by weaker activity in business and professional services which, after a spike in May, returned to the fairly subdued rates seen in March and April. Volumes also continued to fall in consumer services and remained unchanged in distribution. Meanwhile, manufacturing output growth picked up significantly to meet the healthier rates seen towards the end of 2017.

Looking ahead, private sector growth is expected to strengthen a little in the three months to August (+11%), buttressed by a pick-up in distribution and consumer services growth. Manufacturing growth is expected to ease but remain firm.

The CBI’s latest economic forecast highlighted that despite real pay growth inching into positive territory, living standards will continue to be dogged by weak productivity. As a result, any further pick up in real wages and consumer spending is likely to be modest. Meanwhile, manufacturers should continue to benefit from the lower level of sterling and solid global economic growth.

Rain Newton-Smith, CBI Chief Economist, said:

“While our latest survey shows pace the growth slowed slightly in June relative to late Spring, we still expect to see healthier GDP growth in Q2 overall compared with Q1.

“Progress in lifting productivity growth at home is urgent if UK firms are to grasp opportunities overseas. Using proven technologies and sharing best practice are just two examples of how companies can borrow others’ ideas to promote growth.

“Meanwhile flexibility in the UK-EU negotiations will enable both sides to find solutions that protects goods and services trade across Europe, which matters for tens of millions of jobs.”

Tesco/Carrefour: Tesco says it is planning a “strategic alliance” with French retail giant Carrefour, as the two try to use their joint buying power to cut costs and offer lower prices to customers. The two plan a “strategic relationship” when dealing with global suppliers, and the tie-up will also mean sharing their own-brand products. Tesco is the UK’s largest retailer while Carrefour is Europe’s largest. Carrefour operates 12,300 stores across more than 30 countries, employing about 375,000 people worldwide. Last year, it had sales of €88.2bn (£78bn).The two have been talking for two years and, although no formal agreement has yet been signed, they said they were hoping to confirm a deal in the next two months.

Brexit Planning: EEF is dedicated to helping the UK manufacturing industry navigate the complexity of Brexit. They have developed a range of tools to help businesses plan and prepare for the future. Find out more here. or here https://www.eef.org.uk/business-support/our-services/brexit

Diet and Healthy Weight Plan: The Scottish Government has just launched their Diet and Healthy Weight Plan this morning. It is on their website here and here http://www.gov.scot/Resource/0053/00537708.pdf

The outcomes expected are summarised on page 31.

Other News

Wheat Markets: nabim has produced two recent briefings (May 15 and June 22) on the UK wheat market. These publications highlight the rise in the price of UK feed and milling wheat since Spring 2017 and the recent sharp rise, with November 2018 futures contract for feed wheat at record highs. Both documents are available on the nabim website: nabim.org.uk/recently-added

American Pan UK joins Federation of Bakers: The Federation of Bakers is delighted to welcome a new associate member, American Pan UK. American Pan UK, part of the Bundy Baking Solutions group of companies, is a specialist bakery equipment company providing enhanced industrial bakeware solutions and world class glaze and pan maintenance service for the European bakery market. Bundy Baking Solutions, originally founded in 1964 in North America as a family business engaging in the purchase and resale of pre-owned bakery pans and equipment, has grown to become a global industry leader serving many of the world’s largest and most successful bakeries. In 2015, Bundy Baking Solutions expanded their pan sales and servicing to Europe with the opening of American Pan UK.

FDF Webinar Thursday 5^th July: FDF will host a free webinar: Advertising and Promotions in the Food & Drink Industry. Paul Godsmark of Walker Morris will present this webinar which will cover topics such as the regulatory framework; categories of marketing claims and the specific requirements and risks; comparative advertising and the potential pitfalls; plus much more.