16 Mar Post Brexit – Post Pandemic…(hopefully)
Brexit (what ever that actually means) is with us and, undoubtedly, many businesses are seriously struggling with the extent to which the new post – Brexit bureaucracy and certification systems are disrupting their trade.
Initial data on some European trade flows ie between the U.K. and Germany show a significant down turn, but this should, in time, sort itself out and Kent has not, as many predicted, become a lorry park.
Back to where we were by the end of 2021?
Covid has changed us all and the world in which we live, but, now on the back of the UK’s, world leading, vaccination programme, the BOE tentatively suggests that the U.K. economy, at the end of 2021, will be “where it was at the end of 2019”.
World economic growth has taken a beating, but, at the same time, grain prices have risen significantly. The UN cereal price index is up 25%+ yoy and commodity prices look to remain high based on global demand, the tight supply of many commodities and weather concerns for many South American crops.
Even sugar and palm oil, commodities closely associated with the energy complex, and so world GDP growth, have performed well.
Whilst the plant based food market is still firmly on the rise, U.K. livestock markets saw an increase in turnover and throughput throughout 2020. Jan 2021 vs Jan 2020 retail meat sales increased 15% and dairy sales 12% and the recent announcements of route maps out of lockdown bode well for the hard pressed hospitality sector.
In December 2020 the online grocery market in the U.K. doubled its market share to 12.5%, up from 6.7% the previous year.
Despite more people also supporting their local businesses, as a result of Covid, more than 6 million U.K. households tried online shopping in 2020 and the pandemic has significantly increased the pace of this behavioural shift.
The BoE Chief Economist, Andy Haldane, predicts a ‘coiled spring’ recovery with the household savings accrued during the pandemic likely to be spent once lockdown ends.
Significant challenges remain but opportunities abound.