Will shoppers have more to spend in 2019?
The employment rate (the proportion of people in work aged 16 to 64) was estimated at 75.8% in January. This is higher than a year earlier (75.2%) and the joint-highest since comparable estimates began in 1971. At 2.9, the ratio of UK job vacancies to 100 employed jobs is also high. All this points to a tight labour market.
Estimates show that in 2018 average GB weekly earnings increased by 1.2%, compared with a year earlier. This figure is adjusted for inflation and excludes bonuses. Overall, earnings were at a similar level to 2011, meaning that wages have increased at approximately the same rate as inflation over that period.
The Consumer Prices Index 12-month inflation rate (including owner occupiers’ housing costs) was 1.8% in January 2019, down from 2.0% in December 2018. The largest downward contribution to the change in the 12-month rate came from electricity, gas and other fuels, with prices falling between December and January. In contrast, these prices were rising the same time a year ago.
This combination of a strong labour market and slowing inflation ought to increase shoppers’ disposable income. The population in England is expected to grow by 0.6% in 2019, with growth especially forecast in older age groups. These factors together, all other things being equal, should be positive for meat demand in the first part of the year.
Duncan Wyatt, Lead Analyst
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