Dear All,
Detailed below is the Weekly News for 10th May.
Have a good week.
The press statement from Defra regarding the easing of covid restrictions is detailed here.
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FOB Chief Executive’s Weekly News for 10th May 2021
Invitation to join the NI-GB Food Supply Chain Forum
Defra are establishing a new industry forum for all businesses within the agri-food supply chain and moving goods between Great Britain (GB) and Northern Ireland (NI).
The NI-GB Food Supply Chain Forum aims to create a community for open discussion of issues affecting business. It will focus on operational implementation issues in the main and ensure the open communication of relevant policy and delivery developments associated with movements into and from NI.
Please find further details in this document. If you have any questions about the forum in the meantime, please email NIGBFoodSupplyChainForum@defra.gov.uk. You can register your interest in joining the forum online. Please refer to our privacy notice so you know how your personal data will be used.
The Bank of England has published its May Monetary Policy Report, the link to which is below. Also attached is a direct link to the Agents’ Summary section of said report.
MPR page including charts and tables file and visual summary
https://www.bankofengland.co.uk/monetary-policy-report/2021/may-2021
PDF version of the MPR
MPC summary and minutes
https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2021/may-2021
Here is the direct link to the Agents Box in the MPR
Monetary Policy Summary The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 5 May 2021, the Committee judged that the existing stance of monetary policy remained appropriate. The MPC voted unanimously to maintain Bank Rate at 0.1%. The Committee voted unanimously for the Bank of England to maintain the stock of sterling non‑financial investment‑grade corporate bond purchases, financed by the issuance of central bank reserves, at £20 billion. The Committee voted by a majority of 8–1 for the Bank of England to continue with its existing programme of UK government bond purchases, financed by the issuance of central bank reserves, maintaining the target for the stock of these government bond purchases at £875 billion and so the total target stock of asset purchases at £895 billion. Covid‑19 (Covid) and the actions taken to contain it have continued to have a dramatic and rapidly changing impact on the United Kingdom and countries around the world. The Committee’s updated projections for economic activity and inflation are set out in the accompanying May Monetary Policy Report. Global GDP growth is likely to have slowed in 2021 Q1 as Covid‑related restrictions weighed on economic activity, although growth appears to have been stronger than expected in the February Report. Covid vaccination programmes have progressed and picked up pace in many countries. Recently, however, new Covid cases have increased significantly in India and some other economies, leading to tighter restrictions. Advanced‑economy risky asset prices have continued to increase and longer‑term government bond yields have stabilised since March, such that they are higher than at the time of the February Report. UK GDP is expected to have fallen by around 1½% in 2021 Q1, less weak than was assumed in the February Report. New Covid cases in the United Kingdom have continued to fall, the vaccination programme is proceeding apace, and restrictions on economic activity are easing. Reflecting these developments, GDP is expected to rise sharply in 2021 Q2, although activity in that quarter is likely to remain on average around 5% below its level in 2019 Q4. GDP is expected to recover strongly to pre‑Covid levels over the remainder of this year in the absence of most restrictions on domestic economic activity. Demand growth is further boosted by a decline in health risks and a fall in uncertainty, as well as announced fiscal and monetary stimulus. Consumer spending is also supported by households running down over the next three years around 10% of their additional accumulated savings. After 2021, the pace of GDP growth is expected to slow as the boost from some of those factors wanes. The level of activity is higher in each quarter of the forecast than in the February projections. The fall in activity over the past year has reflected a decline in both demand and supply. The LFS unemployment rate fell slightly to 4.9% in the three months to February, but it is likely that labour market slack has remained higher than implied by this measure. Overall, there is judged to be spare capacity in the economy at present. The extension of the Government’s employment support schemes in Budget 2021 is expected to limit significantly the near‑term rise in the LFS unemployment rate. The MPC also expects the medium‑term equilibrium rate of unemployment to rise by less than was forecast in February. Spare capacity is eliminated as activity picks up during 2021, and there is a temporary period of excess demand, before demand and supply return broadly to balance. Monetary Policy Report May 2021 Monetary Policy Summary ii Twelve‑month CPI inflation rose from 0.4% in February to 0.7% in March, with the February outturn triggering the exchange of open letters between the Governor and the Chancellor published alongside this monetary policy announcement. The weakness of recent CPI outturns has largely reflected the direct and indirect effects of Covid on the economy. As has been the case in recent MPC forecasts, inflation is projected to rise to close to the target in the near term as some of those effects fade. In the central projection, CPI inflation rises temporarily above the 2% target towards the end of 2021, owing mainly to developments in energy prices. These transitory developments should have few direct implications for inflation over the medium term, however. In the central projection, conditioned on the market path for interest rates, inflation returns to around 2% in the medium term. The outlook for the economy, and particularly the relative movement in demand and supply, remains uncertain. It continues to depend on the evolution of the pandemic, measures taken to protect public health, and how households, businesses and financial markets respond to these developments. In the central projections of the MPC’s May Report, the economy experiences a temporary period of strong GDP growth and a temporary period of modestly above‑target CPI inflation, after which growth and inflation fall back, with inflation around the target two and three years ahead. In judging the appropriate stance of monetary policy, the Committee will, consistent with its policy guidance and as always, focus on the medium‑term prospects for inflation, including the balance between demand and supply, rather than factors that are likely to be transient. The MPC will continue to monitor the situation closely and will take whatever action is necessary to achieve its remit. The Committee does not intend to tighten monetary policy at least until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably. At this meeting, the Committee judged that the existing stance of monetary policy remained appropriate.
UK Manufacturing PMI Increased to 60.9 in Apr’21
According to data published by IHS Markit⁄CIPS, seasonally adjusted UK manufacturing purchasing managers’ index (PMI) increased to 60.9 in apr’21 from 58.9 in mar’21, reporting the highest PMI figure since jul’94.
The upturn in the index has been supported by an increase in the rate of growth in the UK manufacturing sector. The sector recorded its highest growth in output and new orders in April, the largest growth seen in seven years, which also led to a significant increase in employment in the sector. The output growth was facilitated by the easing of lockdown restrictions, improved demand and backlogs of work.
However, the sector still remained affected by supply-chain delays and input shortages, leading to an increase in purchasing costs and selling price inflation.
Total new orders also increased for the third consecutive month in apr’21, driven by stronger client confidence, gradual re-opening of the economy and improving global market conditions
SME Manufacturing Output Remained Unchanged in the quarter to Apr’21
According to the Confederation of British Industry (CBI) quarterly industrial trends survey, small and medium enterprises (SME) manufacturing output remained unchanged in the quarter to apr’21, while business sentiment increased by 35%. however, export optimism decreased by 6%. The survey was conducted with 260 SME manufacturers.
The survey indicated that total new orders increased by 11% in the quarter to apr’21, with a 9% growth in domestic orders, while export orders remained stable.
The survey also reported a 2% improvement in investment intentions in buildings in the quarter to apr’21, which was the highest since jan’15. Meanwhile, investment intentions in plant & machinery increased by 21%, which was the highest since oct’88. In the quarter to apr’21, average costs increased by 49%, the fastest increase since apr’11, while domestic price inflation increased by 21% and export prices increased by 8%.
EU institutions consider implications of EC report on new GM techniques
The European Commission (EC) has published a report on novel genomic techniques (Q&A), which was initiated following the 2018 European Court judgement, which concluded that genome edited products and other new GMOs fall within the scope of EU GMO legislation. The report suggests that new genomic techniques (which can alter the genome of an organism) have the potential to contribute to a more sustainable food system as part of the objectives of the European Green Deal and the Farm to Fork Strategy. It also concludes that the EU’s current GMO legislation, adopted in 2001, is not fit for purpose for these innovative technologies. As a result, the European Commission (EC) plans to start consulting on the design of a new legal framework for these biotechnologies. Commission officials will give evidence on the report to the European Parliament’s (EP’s) Environment and Public Health (ENVI) Committee on 10 May and it will be discussed with EU Ministers at the Agriculture and Fisheries Council in May.
Titanium dioxide no longer regarded as a safe food additive by EFSA
The European Food Safety Authority (EFSA) has announced that it no longer regards titanium dioxide (E171) as a safe food additive, The announcement follows the publication of a scientific opinion updating its safety assessment of the food additive, following a request by the European Commission in March 2020. This updated evaluation revises the outcome of EFSA’s previous assessment published in 2016, which highlighted the need for more research to fill data gaps. EFSA said that a critical element in reaching this conclusion was that it could not exclude genotoxicity concerns after consumption of titanium dioxide particles. EFSA acknowledged that after oral ingestion the absorption of titanium dioxide particles is low, but said these particles can accumulate in the body. The new EFSA assessment has taken into account thousands of studies that have become available since 2016, including new scientific evidence and data on nanoparticles, as well as EFSA’s new guidance on the application of nanoscience and nanotechnologies to its risk assessment process. E171 has been widely used as whitening and brightening agent in cheeses, sauces, skimmed milk, ice cream, confectionery products, sweets, chewing gum, pastries and biscuits.
HMRC advises businesses importing goods from Europe
HMRC gives advice to businesses that trade with the EU on making delayed import declarations.
Digital assets for food and drink businesses
We publish digital assets on our Food and Drink Dropbox Paper page. These include a webinar talking through guidance on Rules of Origin for agri-food businesses and FAQs covering key information on Rules of Origin and food labelling. There will be further updates to the products hosted on the Dropbox Paper page over the next few weeks, so please do return to the page to ensure you are viewing the latest content.
Moving Goods Trader Showcase migration
The online Trader Showcase site that you’ve been using to find out about the new rules for moving goods to Northern Ireland and exporting to the EU has been migrated to two new locations, which you can access by using the links below:
Moving goods from Great Britain to Northern Ireland
Exporting goods from Great Britain to the European Union
The new Trader Showcase has been developed using Dropbox Paper, which usually requires users to have an account to access content. We recommend opening a free account – which involves a basic registration process – if you don’t already have one.
The new Trader Showcase site works with most modern browsers, but is best viewed using Chrome, Firefox, Safari and the latest two versions of Edge.
Plant Health Week (10th – 16th May)
Next week is Plant Health Week (10th -16th May) and its aim is to raise awareness for plant health, biosecurity and the benefits plants have. This will be the second year Defra has run a Plant Health Week that incorporates activity from multiple external stakeholders, partners and eNGOs coming together to celebrate plant health.
New plans unveiled to boost recycling
There will be a major shake-up of England’s bin collections to make it easier for millions of households to recycle and reduce costs for taxpayers.