The UK Food System plays a key role in delivering growth and jobs: IGD | ESM magazine

As the UK’s new Labor government inherits a struggling economy, IGD’s economics experts have published a Viewpoint report, New government, new direction? breaking down the role of the UK food system in delivering growth and jobs.

As the government grapples with how policy can boost growth, the report highlights the fact that food and consumer goods make up 7% of the UK economy and that the UK food system is the largest private sector employer.

The implications are that UK food and consumer goods may continue to rise in value and increase household wealth and spending.

However, the report shows that the long-term outlook is not so simple, as the increase in the minimum wage will be felt strongly by retailers, who are already struggling with rising costs and weak volume sales.

Food and beverage inflation

Although the economy has moved towards real growth, food and beverage inflation is expected to remain positive. According to the forecast, it is expected to remain at 0.1% in the third quarter of this year and will gradually increase to between 1% and 3% during 2025, creating a leveling effect.

IGD expects that the downward part of inflation is almost over.

“The UK will not return to a pre-crisis economy for some time,” commented James Walton, chief economist, IGD. “But the food system has a huge role to play in supporting economic resilience, growing GDP and providing jobs in our local communities.”

Revenue sharing

Elsewhere, IGD’s ShopperVista data shows that the income divide between high- and low-earning households is still a major factor influencing shopper confidence.

Among adults with lower incomes, 29% expect to be better off in the next year, compared to 59% of those with higher incomes. Based on the survey, 62% of all adults expect food prices to be more expensive in the next year and only 13% expect food prices to fall over the next year.

In addition, a recent survey undertaken by IGD reveals that the current mood among buyers is tentative post-election, with a modest view that financial conditions will improve.

“Our food system is critical to our UK economy and to driving growth. However, as we experience the greater impacts of a changing climate and ongoing geopolitical uncertainty, it is also facing a period of much greater risk ,” added Naomi Kissman, socialite. director of impact at IGD. “Therefore, it is encouraging to hear that the new government is prioritizing increasing food security.

“There is a huge opportunity for businesses and policy makers to work in partnership to deliver a more resilient, sustainable and economically successful UK food system.”