Blog: Carney takes Bank hot seat as UK food poverty grows
Katy Askew | 1 July 2013
The weak macro-economic climate is likely to be drawn into sharper focus in the UK as Mark Carney takes the reigns as the new governor of the Bank of England.
While most of this morning's (1 July) headlines seemed to centre on the fact Carney took the Tube to work, trivialities cannot detract from the daunting task ahead: that of kick-starting the country's economy.
In a climate of government austerity measures, deep cutbacks, poor GDP growth, rising unemployment, declining spending power and weak business confidence this will be no mean feat. Indeed, there are those that feel the economic trajectory set out for the country means that Carney has little hope of success.
"With the UK economy struggling to return to sustainable growth while the government implements an unprecedented post-war programme of fiscal austerity, the weight of expectation on new Bank of England governor Mark Carney has been enormous," UK economist Neil Prothero commented.
Prothero, who wrote the Economist Intelligence Unit's report latest report The end isn't nigh: central bank challenges as the era of cheap money enters a new phase, said Carney is unlikely to meet these expectations.
"Central bankers are used to managing expectations about monetary policy, but Mr Carney has had to manage downward expectations about his ability to revive the economy single-handedly. It is all but certain that his tenure will begin with a concerted attempt to bolster activity, but it is unlikely that Mr Carney has the tools at his disposal that would allow the economy reach escape velocity."
Carney is not expected to reveal his hand until August, when the Canadian could potentially employ forward guidance on interest rates. The new governor is thought to favour further quantitative easing to help the economy reach "escape velocity", although six of the nine-member MPC are currently blocking more stimulus.
While the country awaits Carney's verdict, poor economic conditions are having a very real impact on the nation's poorest and most vulnerable groups. The food sector is oft cited as one of the industries most insulated from the deteriorating economic climate - with the mantra "people have to eat" being thrown around. However, new research from Tesco has revealed that a growing number of people are struggling to do just that.
According to the retailer one in five parents in the country are struggling to feed their children. "More than 20% of parents have skipped meals, gone without food to feed their children or relied on family members or friends for food in the last twelve months," the research, carried out by Tesco, the Foodbanks charity the Trussell Trust and food redistribution charity FareShare, found.
Only one-third of those suffering from "food poverty" (a phrase that has become part of the common lexicon since the downturn hit with epic proportions in 2008) think that their situation will improve in the past year. And - alarmingly - more than one-quarter of those struggling to eat said they would be unable to feed their children over the school holidays (when they won't be entitled to free school meals).
Tesco's research provides a very real dimension to the more abstract discussion of how to get the country's economy moving again.
In the meantime, as the welfare net is gradually being withdrawn as the Government looks to knuckle down on public spending, communities and private companies are increasing their activities in this area.
This weekend Tesco will be staging its second national food collection - where Tesco customers will be asked for food donations in store. The supermarket group will add 30% to whatever is donated while continuing with its efforts to reduce food waste (it currently donates whatever is wasted by its online delivery business to FareShare).
Tesco is not alone in its support of charities providing succour for under privaliged families. At the end of May, Asda revealed that it will donate all surplus stock within its supply chain to FareShare, equating to 3.6m meals a year, while Sainsbury's has partnered with FareShare since 1996.
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