UK's Autumn Statement fails to raise industry enthusiasm
FDF CEO Karen Betts, the CBA’s director of Operations Karen Dear and Scottish Bakers CEO Alasdair Smith have expressed disappointment for Chancellor Jeremy Hunt’s essentially support-poor plans to help the sector tackle the cost-of-living crisis.
Lack of clarity
Welcomed, of course, are plans to further support businesses through freezing business rates for an additional year. However, said Dear, “the CBA is disappointed by the lack of clarity regarding further support for businesses in terms of the energy crisis and an extension to the energy cap.
“Many of our members will still be facing a significant rise in energy bills in the coming year and have been left with justified concerns following the lack of additional support provided by the government at this moment.
“We will be continuing to liaise with the BIES (Department for Business, Energy and Industrial Strategy) to ensure our members’ concerns and needs are heard and accounted for with the hopes that long-term support can be provided to ensure their businesses can continue to operate.”
Scottish Bakers added its members would have like to have seen more focused support, especially around the high energy prices.
“Crucially, so far as we are aware, there is nothing in the pipeline for support beyond the end of March,” said Smith.
Would have liked more measures
Betts said the FDF recognises the barrage of difficult issues the Chancellor had to deal with in the Autumn Statement, but added, “While there was positive news on tariff suspensions – something we have long called for – food and drink manufacturers would have liked to have seen more measures to help our industry deal with the powerful inflationary pressures we are facing.
“With food and drink inflation now standing at 16.4% and energy costs now accounting for a quarter of food and drink businesses’ operating costs, our sector would have liked to have seen more clarity on future energy support, a plan for working with business to tackle labour shortages, commitments to improve the implementation of the EU trade deal, and regulatory reforms to reduce costs to businesses and to help our sector weather the inflationary crisis while protecting consumers as far as possible from price rises.”
Economy in a recession
On a wider scale, Walid Koudmani, chief market analyst at online investment platform XTB said the market seems slightly reassured with a marginally brighter forecast for 2022, but the economy, for the short term at least, is in a recession.
He also noted the extent of some of the measures announced were unclear.
“[The] announcement was meant to shine some light on the government’s plans to tackle rampant inflation while outlining its economic forecasts.
“As some expected, there were several announcements related to public spending, new policies and the need to deal with rising costs, despite the extent of some of the measures mentioned remaining unclear,” said Koudmani.
“The new economic forecast for 2022 was better than the previous one as UK GDP is expected to grow 4.2% this year, up from 3.8% in the previous forecast.
“The Pound reacted negatively to the announcement, with the cable pair pulling back and reaching a low of 1.18 after several days of consolidation.
“All in all, markets seem to be slightly reassured by the statement despite a variety of policies that may prove to be unpopular, but one thing is clear, the economic backdrop remains negative, at least for the short term with the economy in a recession and a variety of new policies which could impact incomes across the board.”
