News in brief: food and drink, currency, inflation

News in brief
News in brief

UK consumers do not see provenance of food and drink as important

Analysis of the latest official ONS data by Santander Corporate and Commercial has found that many consumers in the UK do not view provenance as important when buying food and drink. More than a fifth (21%) admit to not looking where their food and drink comes from and only 18% always look for local products.

The UK food and drink manufacturing sector grew by 6% in 2014 to a total of 8,225 firms, according to the research, making it one of the UK’s most successful industries. Figures from the Food and Drink Federation reveal the sector to be the largest manufacturing sector in the UK, with a turnover of £95.4 billion and accounting for 18.3% of the total manufacturing sector by turnover.

In terms of food and drink, Britons believe the UK exports the most to the US (39%), Ireland (32%), Spain (24%) and France (20%). In reality, Ireland is the country’s biggest export market, followed by France, the Netherlands and Germany, with the US coming in at number five. Beers and wines (28%) top the list of items that British consumers would like to see exported around the world, followed by cheese and dairy (26%), local meats (18%), local confectionary (16%) and spirits (15%).

However, while many correctly identified salmon, cheese and beef as being on the list of the UK’s biggest exports, the list did not include chocolate, which is the UK’s biggest food export: the popularity of British chocolate brands are worth some £257 million to the UK economy. Chocolate is also reported as the most missed food by Brits when they travel abroad.

Head of international at Santander SME Banking Mark Collings said: “The UK food and drink manufacturing sector has become a major UK success story on an international scale. British people are proud of their local produce and certainly miss their favourite tea, chocolate, meat and cheese when travelling abroad, yet many do not realise quite how popular these items have become beyond our shores. Over the years the “Made in Britain” brand has become synonymous with good quality products and services.”

Federal Reserve ignored inflationary warning signs and destabilised global economies

The Federal Reserve's adoption of an expansionary monetary policy following the 2008 recession ignored inflationary warning signs on the dollar standard's periphery, destabilising both the US and global economies, according to a new report by the National Centre for Policy Analysis.

The Fed's actions impacted each country differently, depending on its monetary policy:

• Inflation in China [no full stops] China had pegged the yuan to the dollar, allowing the Federal Reserve to control its monetary policy. While China attempted to mitigate the accelerating inflation and oversupply of dollars by investing large percentages of capital abroad, it still experienced a sharp increase in economic activity that included the construction of massive infrastructure projects, opulent government buildings and a housing property bubble.

• Bubbling Brazil Brazil saw a huge bubble from 2004 to 2012, with exports rising 500 percent and domestic consumer debt increasing eight-fold as the cost of living rose higher than some European nations.

• Effects on Mexico Mexico's property bubble pushed prices to record levels, but the focus was mostly on commercial real estate. Weaker links between homebuilders and the financial sector meant that the risks for the overall economy were not as serious.

"The current Fed's policy is the equivalent of a regressive income-transfer policy," said research associate Hector Colon. "The economic distortions created by these unsustainable policies have produced a sluggish and vulnerable post-recession recovery and created a workforce approaching full employment, but with the lowest labour participation rate since 1977."