Detailed below is the Weekly News for 30th October.
Have a good week.
Gordon Polson – Director
CBI Economic Update: UK Q3 GDP growth beats expectations: UK GDP grows by 0.4% quarter-on-quarter but rising inflation seems to be squeezing household spending.
The UK economy grew by 0.4% in Q3 2017, according to the ONS’ preliminary estimate of GDP. This is slightly higher than both consensus expectations and the CBI’s “nowcast” (both 0.3%). The uptick in Q3 growth was largely driven by a firmer rise in manufacturing and business services & finance output. The Q3 outturn was slightly firmer than the average rate of growth seen in H1 2017 (0.3%), which may give some ammunition to those on the Bank of England’s MPC who are leaning towards vote for a rise in interest rates in their November meeting.
Turning to more recent data, the CBI’s quarterly Industrial Trends Survey pointed to slower growth in manufacturing output and new orders in the three months to October. Optimism about business conditions also fell for the first time in a year. Investment intentions deteriorated for the year ahead, particularly for buildings, where spending is expected to be cut back at the fastest pace since July 2009. Concerns over labour shortages edged higher, with the number of respondents citing them as a limitation to investment plans rising to the highest since October 2013. Meanwhile, unit costs growth picked up compared with the previous quarter, defying predictions for softer growth and consequently, selling price inflation is expected to remain elevated in the near term.
Retail sales growth rose on the year, with volumes rising by 1.2% in September. Non-food, in particular household goods and clothing stores, as well as non-store retailing drove the increase in sales volumes. This chimes with the CBI’s Distributive Trades Survey which reported a brisk expansion of sales volumes in the year to September. However, the October Distributive Trades Survey reported that retail sales volumes subsequently fell at the fastest pace since March 2009, in a sign that households are increasingly feeling the pinch from higher inflation.
CPI inflation rose to 3.0% year-on-year in September, up from 2.9% in August and marking the strongest growth in prices since March 2012. The uptick in inflation was driven by rising prices of food, recreational goods (including computer games, books and theatre admissions) and transport costs (mainly driven seasonal changes in air fares). As a result, the core rate of CPI (which excludes food and energy prices as they are considered to be more volatile), actually fell to 2.6% in September from 2.7% in August.
Brexit:FDF Comment: The departure late last week of Baroness Anelay from the Department for Exiting the EU, and her replacement by Lord Callanan, has not generated much coverage but it is significant. The EU Withdrawal Bill, we now know, will return to the Commons to begin its committee stage on 14 November. With so many amendments tabled, including some highly significant ones from former Conservative minister Dominic Grieve, the government will have a difficult time getting the legislation through. When the Bill goes to the Lords – where it will face even greater scrutiny and with less procedural protection – it is now Lord Callanan who will be responsible for its passage. Lady Anelay has been in the Lords for 20 years and has served as Chief Whip, as a Foreign Office minister and in a variety of shadow roles. Lord Callanan was created a peer in 2014 and was appointed to his first ministerial post following this year’s general election.
These changes of personnel in key Brexit posts – of which there have been several in recent months – are a source of concern about the government’s practical capacity to get the country ready for EU exit. When people talk about ‘no deal’ they are usually referring to the progress of the exit/future trade negotiations with the EU. It is important to remember that there are many practical and legislative steps we must complete ourselves if we are to exit without chaos
Scottish Government Obesity Strategy: Last week the Scottish Government launched their Diet and Obesity Strategy Consultation. The key actions in the strategy include measures to restrict price promotions on foods high in fat, sugar and salt, a call on UK Government to introduce a 9pm watershed, a look to further extend the Committee of Advertising Practice’s restrictions on advertising e.g. on trains and buses, a separate Out of Home Strategy to be produced, and exploration of options on labelling. The Strategy consultation also said it would work with FDF Scotland and others on reformulation support for SMEs, and that they wanted to extend the soft drinks levy to cover milk based, and powdered drinks.
Sugar: A reminder that Action on Sugar’s annual Sugar Awareness Week is taking place this week from Monday 30th October to Sunday 5th November.
Health and Safety:HSE Courses
Nearly 5% of the workforce in the food and drink manufacturing industry suffer from ill health caused or made worse by work.
Occupational asthma and rhinitis, related mainly to exposure to flour and bakery dusts, causes around 8% of ill health. Occupational lung disease is a priority area for HSE and inspections are being focused on health risks in particular.
Find out how you can help to protect your workforce at HSE’s Workplace Healthy Lungs Summit in London on November 22nd.
Thursday 2 November 2017 ETC Venues, Marble Arch, Garfield House, London, W2 2EA BOOK YOUR PLACE NOW
HSE Training & Conferences are running a 1 day master class in partnership with EEF on Managing Health Risks in Manufacturing.
You will learn how to effectively manage your health risks and also get access to exclusive tools and models to help you be confident you are focusing on the right things.
You will hear directly from HSE and find out what HSE will be looking for and how you can demonstrate that you are actively managing the health risks in your business.