Business News Round Up (16/09/2022)
August sees retail spending drop for the first time this year
Both the value and the volume of sales in the UK’s retail sector dropped last month for the first time since the end of 2021, as shoppers tighten their belts in the face of soaring prices. The Office for National Statistics (ONS) stated that sales volumes declined by 1.6% in August, higher than the 0.5% expected, building on a downward trend that started around a year ago when Covid-19 restrictions were lifted for the hospitality sector. Since then, volumes have fallen as people switch from buying beer and food in shops to going to local pubs or restaurants, for example. But the amount that people spent at retailers rose by 8% between July 2021 and July this year. Then in August, this dropped by 1.7% from the month before. The ONS said that food shops, non-food shops, online retailers and fuel sellers had all registered declines in August – the first time since July 2021. Non-store retailers – largely the online sellers – saw volumes drop by 2.6% in August, giving back some of the ground they gained during the pandemic. But sales in the sector are still a quarter higher than before lockdowns.
https://www.insider.co.uk/news/august-sees-retail-spending-drop-28006368
PwC: UK workers face £1,400 inflationary hit to wages
UK workers are facing a £1,400 hit to their real wages by the end of 2022 as the UK economy confronts a highly volatile and uncertain inflationary outlook, according to the latest PwC Economic Outlook. Although PwC forecasts that the UK economy will continue to grow at a rate of between 3.1% and 3.6% in 2022, the Big Four firm is also warning that the UK is likely to enter a recession as early as this year, followed by a period of negligible or negative growth through 2023 and 2024. PwC believes the government’s recently announced Energy Price Guarantee, which caps household energy bills for two years at £2.5k, will provide some certainty to households over the coming year. Meanwhile, the six-month business support scheme will provide some relief to businesses that are struggling to stay afloat in the face of rising energy bills. PwC has subsequently revised its projections and forecast that inflation is already at or close to its peak of around 10% to 11%. “This is significantly lower than our expected peak of 17% in 2023 based on early September market implied energy price paths and without government intervention, when household energy bills were set to reach around £5k a year,” says Jake Finney, an economist at PwC.
Manchester’s Fearless Academy raises £500k to plug skills gap
Manchester-based digital training programme The Fearless Academy has received £500,000 in funding to support its goal of closing the digital skills gap. A limited pool of digitally talented workers has been cited as a key concern for the British tech sector and the economy as a whole. For jobs in and out of tech, digital skills are becoming essential, yet data shows they are in short supply. A report from Tech Nation in July showed the number of vacancies for digitally demanding roles has hit a 10-year high. Digital skills bootcamps such as The Fearless Academy, are one of the solutions addressing the problem, offering free training to help workers develop tech-based career skills. Others have been launched in the Midlands, with the West Midlands Combined Authority (WMCA) recently partnering with Microsoft to boost digital skills in the region. The Fearless Academy, which first opened in August, received its new funding from the Greater Manchester Combined Authority (GMCA), providing the cash boost via its Department of Education’s National Skills Fund.
UK to delay food and drink labelling rule changes for EU imports by more than a year
The government has postponed plans to enforce new labelling rules on EU food imports by more than a year due to concerns about costs for businesses and consumers. The Department for Environment, Food & Rural Affairs (Defra) said new requirements for separate labels for products intended for Great Britain will now come into force on 1 January 2024. In a briefing, Defra told Just Food that it was delaying import controls on EU goods entering Great Britain due to the supply chain impact of Russia’s invasion of Ukraine and the rise in energy costs. It said: “In general, delaying these labelling requirements will mean that some labelling terms and EU addresses – in relation to the importer or FBO [Food Business Operator] address requirement – will continue to be permitted on the GB market for an additional 15 months.” The deadline to use UK/EC identification marks in the GB market – needed for products of animal origin – has also been extended to 1 January 2024. Post-Brexit labelling rules will affect a wide range of food products coming into the country from the EU, including meat, vegetables, and oils. EU producers will have to have a UK-based vendor or importer address on the label.