Culture

K economy has been surviving the wave of global financial crises of 2008, which leads to weak job creation, high-energy prices and negative real income growth, which keep consumer-spending low and restrained business investment, weighed on the economy. From the year 2013 however, UK economy has started improving as Gross Domestic Product (GDP) grew by 1.7% and by 2.8% in 2014. Similarly, the UK economy grew by 2.2% in 2015 as a whole, down markedly from the growth of 2.9% recorded in 2014. In May 2015, the inflation rate rose to 0.1% from -0.1% in the previous month. UK public finances remain weak despite slow good progress. Public-sector borrowing (excluding public-sector banks) is in deficit of £7.5 billion in December 2015, £4.3 billion lower than the total recorded in December 2014. For the period between the month of April and the month last month of the year 2015, borrowing of public sector amounting £74.2 billion, which is £11 billion smaller than that recorder from previous financial year. This improvement means that there is a chance government could meet its borrowing target for financial year 2015/16. The official bank rate has been 0.5% since March 2009; the rate is low when compared to historic trends comparison and has a positive impact on the economy, because reduces the cost of borrowing and makes savings less attractive – so people invest and consume more. Despite Bank of England downwardly revised its UK GDP forecast for 2016 to 2.2%, from 2.5% but Uncertainty over ‘Brexit’, weak overseas growth and financial market volatility potentially rising inflation and interest rates are prospecting to create poor environment for business performance in the years 2016.

1.2 Overview of United Kingdom Food Industry

According to FTSE 100 (2015), Hilton Food Group Plc classified into Food Producers and Processors, which form main suppliers of retail food Sectors. The food industry is the United Kingdom largest sector with turnover of approximately £70bn annually. Food Industry represents about 15% of the total manufacturing sector, about 20% of consumer expenditure and 500,000 people employed by the food manufacturing and processing industries. The sector affected by economic downturn and has a compound annual growth rate (CAGR) of 3%-4%. Overall performance of food industry defined in three phases according to history of UK economy. First phase defined between July 2007 and July 2008, in this period sales volumes experience growth with varying degree. More over this period dominated with lower Consumer Prices Index (CPI), which resulted in rising real earnings or purchasing power of consumers. On the other hand consumer credit increased by 8.6%, which driving sales growth. Second phase defined between August 2008 and May 2013, where volume of retail sales fluctuated between periods of contraction and expansion, which partly explained by the economic climate when consumer credit reduced by 24.8%. Moreover, earnings fell in real terms during this period.

Sample Solution