Economics Society Magazine - March 23

2023 job losses & store closures

uK inflation

Should childcare be free?

McDonald's prices are rising & More...

Economics THE WorLD IN BrIEF

March 2023

uK inflation – which goods and services have risen most in price?

raj & Ted

Over the past few years, the UK has seen a steady rise in prices across various sectors. This includes food, transport, and utility bills. While inflation is an unavoidable economic phenomenon, some factors have contributed to the sharp increase in prices that we have witnessed recently.

One of the primary causes of food inflation in the UK is the fluctuations in global food prices mainly due to the volatility in commodity prices. The UK imports a significant proportion of its food, making it vulnerable to global price changes. Additionally, natural disasters such as droughts, floods and storms can affect the supply and demand chains, leading to higher prices.

in recent years, leading to higher prices. Additionally, environmental regulations and taxes imposed on the transport sector by the government play a role in the increased prices. However this is stabilizing as oil prices are falling.

Finally, utility inflation is mainly due to the rising costs of electricity and gas production. As coal powered plants are phased out, renewable energy sources such as wind and solar power become increasingly expensive to operate, leading to higher electricity prices. Additionally, infrastructure investment, maintenance costs, and government policies also contribute to rising utility bills.

rising import prices for food will only increase our budget deficit as we import 46% of our food. This will only increase debt which means higher interest payments, which decrease our government spending which limits growth.

Another contributing factor to food inflation is the impact of Brexit on the UK’s food industry. The uncertainty around Brexit negotiations has led to a weaker pound, making it more expensive for UK-based companies to import goods. This, coupled with potential border delays, has led to food shortages like we are currently seeing in fruit and vegetables, in turn, driving prices up. This is made worse by recent droughts that have limited the supply of peppers, tomatoes and cucumbers.

Transport inflation, on the other hand, is primarily caused by rising fuel prices. The cost of oil, which is used to fuel most modes of transportation, has been volatile

The effects of inflation on these items which are necessary for our survival are great. Firstly with food prices increasing by 18% there will be large effects for the whole population. With the median income only increasing by £623 it means that the percent of income spent on food has risen sharply. This did affect the lower income households the most, increasing the level of poverty and food insecurity, affecting the most vulnerable groups of society the worst such as children and the elderly. The high prices of food might force people to switch to cheaper foods that are worse for health which can have a long-term negative effect on wellbeing. For the UK economy this will also have an adverse effect,

Further rising prices in transport will also affect the household budget and will lead to a worse standard of living and consumption which can further inhibit growth in the economy. Further increases in the cost to travel will mean people are less inclined to go to work and might work from home. This is less efficient and will decrease the productivity of the country and can decrease output. Lastly the effect of increasing prices of utilities will further affect the standard of living as, there will be less income to spend on luxury items and it could mean colder homes which has a negative effect on health. This will again have a larger impact on lower income households with fixed incomes as they can’t adapt to the rising prices and have large opportunity costs. However, it will make people be more efficient in how they use electricity which means better habits as electricity isn’t being wasted leading to better environmental sustainability. This is the only positive in otherwise a bleak reality.

A fall in demand for uK takeaways as eating out returns & food prices rise

Will

UK households ordered 12% less takeaway food in January than a year before. In addition to this, the sector also faced more competition from restaurants and cafes after the lifting of pandemic restrictions. Whilst delivery and takeaway sales are double pre covid levels, they continue to drop year upon year since the pandemic. A main reason for this is due to the cost of living crisis, with the consumer price index (CPIH) currently estimating cost push inflation to be at 8.8 percent as of January 2023. The main contributors to this are food and non-alcoholic beverages. This would imply that one of the main reasons for the sectoral decline in demand is the inability for many to purchase takeaways, instead resorting to cheaper alternatives. Furthermore, with the costs of basic ingredients as well as increases in rent, many takeaway businesses are drastically struggling to maintain their healthy profit margins. This is leading to the inevitable closure of numerous household’s favourite businesses, resulting in a narrowed choice for consumers. Protecting already narrow profit margins will certainly be a challenge throughout

the year commencing.

A further explanation as to why demand has shrunk for the previously booming takeaway industry is the lifting of pandemic restrictions. Since the government changes, many consumers have turned back to their pre-Covid-19 habits, replacing deliveries with the special experiences that only eating out can replicate. Hence, this has led to a significant decline in takeaway consumption, with consumers concentrating their spending in sit-in restaurants.

The pandemic has also brought the importance of health and wellness to the forefront of people’s minds, with consumers becoming more conscious of the negative externalities concerning certain foods that are commonly present on many British takeaway menus; They have started to opt against a takeaway and have selected healthier cook at home options. With takeaway menus consisting of items high in saturated fat and sodium, consumers have shifted away as they are aware of the health risks associated with the average takeaway. This is the individual response to obesity rising

every year with 25.9 percent of adults estimated to be obese in the UK and high blood pressure rates always rising.

A final reason for the shrinking profit margins of takeaway businesses is the competition of the newly emerging meal kit system. Meal kit services such as HelloFresh and greenchef have become increasingly popular since the emerging of the pandemic, offering a more affordable and convenient alternative to takeaways, which under the cost of living crisis, strongly appeals to consumers.

To conclude, various factors have contributed to the fall in demand for takeaways in the UK, including the return of in-person dining, health concerns and emerging substitutes. However the main factor underpinning the empty pockets of takeaway businesses is that of the current cost of living crisis and high rates of inflation, causing consumers to be increasingly wary of their spending as real wage rates are constantly falling.

Should childcare be made free to tackle the labour shortages?

Honor & Scarlett

In England currently, the government provides 30 hours of free childcare weekly for 3 to 4 year olds, although this is being proved inefficient for workers as they cannot work to their full potential with such restricted hours and the lack of affordability of extra childcare. This creates an evident disincentive for around 1.7 million mothers to join the workforce as it can be deemed cheaper to stay at home. If childcare has increased accessibility, it can encourage more people of age to work to join the workforce. This would increase the supply to the labour market, helping to increase current productivity levels.

Furthermore, it could potentially increase the development of children prior to starting primary schools as nurseries allow an introduction to basic numeracy and phonics, known to boost future cognitive and social development. Thus, an investment now could have potentially long-term

effects on the skill of the workforce. Therefore, it allows an advantage for the lower socioeconomic groups that can’t afford childcare earlier on as their children have the same opportunities. This then leads to a long term government macroeconomic objective which is the reduction in the distribution of income between the rich and the poor. If the government were to fund free childcare, then the investment required would result in large opportunity costs. For example, the investment would be funded by increased taxes or cuts to other government programmes. Especially, due to the current economic climate free childcare would be particularly hard to fund. Additionally, free childcare could lead to a reduction in the quality of care compared to paid child care. For example, compromises would have to be made in areas such as catering and staff quality. As a result, this would have negative effects on child development and wellbeing. For instance, due to lower quality

catering there could be increased health problems which effect children’s development. Finally, there are arguments to suggest that the government should not be involved in the provision of early education and care, as it is better left to the private sector. Firstly, as it would lead to an inefficient allocation of resources and the money spent towards childcare might be better spent somewhere else. For example, towards healthcare to improve the efficiency of the NHS and the welfare of the country. Also, the government could crowd out private providers, reducing the number of childcare providers and making it difficult for parents to access private childcare services if they wish to.

2023 job losses & Store closures

Senura

There has been a grim start to 2023 with the loss of nearly 15,000 jobs. In the wake of Covid, many jobs have been lost due to closures of major retailers, some of which include Topshop, Oasis, and Debenhams. More recent examples include Paperchase and Wilko. Paperchase fell into administration in January announcing that all its 106 stores in the UK are set to close thus resulting in at least 900 jobs being lost.

Additionally, clothes retailer M&Co is set to close all 170 of its stores after the firm went into administration, resulting in up to 2,000 job losses.

As the cost-of-living crisis lingers on, consumers are having to adapt. This leads to the consumer base switching to cheaper alternatives such as Aldi and Lidl, such as Asda have seen a fall

in profits. To combat this, Asda has had a rapid cut in costs at the expense of employees. A proposed 22% cut in staff hours will leave 300 jobs at risk. Additionally, Wilko who reported £36.8 million before tax in 2022, has had a complete change in their leadership team. They are set to cut over 400 jobs to control costs and a reduction in staff hours, all to reduce production costs.

Meanwhile, the UK’s number one retailer Tesco has announced plans to cut close to 2,000 jobs in a restructuring program. Due to declining demand, Tesco is set to close all its food counters resulting in even more job losses. The supermarket has proposed the closure of 8 pharmacies and has introduced a new management structure in 350 of

its smaller stores as well as reducing the opening hours of all the in-store post offices.

To conclude 2023 has seen the closure of Paperchase and Wilko, oligopolies such as Tesco and Asda undergo large scale restructuring and firms such as M&Co reducing staff hours and letting go of workers. This all may be a trailer for what is to come as many large retailers are moving away from in-person stores but are instead switching to online stores and delivery schemes. However, a new era is dawning with Aldi and Lidl climbing the ranks soon to become the forefront of supermarket chains and Amazon and Ebay leading the way as the UK’s top online retailers.

McDonald's prices are rising

Ernie

McDonald’s has announced that its prices have risen. Again. The prices of several popular items including the ‘Mayo Chicken’, ‘Bacon Double Cheeseburger’, and medium carbonated drinks have increased by 20%. This follows on from July 2022 when the price of a cheeseburger rose, for the first time in 14 years, from 99p to £1.19. A McDonald’s spokesperson has said that the company is committed to offering ‘great tasting food at affordable prices’ and that prices have had to rise due to increasing food and energy costs. This is an example of cost-push inflation which is when firms increase prices due to rising costs of production. Despite hiking up prices, McDonald’s has started to trial meal deals called ‘saver meals’ in 120 restaurants in the South East of England which, if successful are likely to be rolled out to the whole country.

How will this price rise affect the UK?

Lower-income households across the UK who regularly consume McDonald’s are likely to be hit hard as spending on fast food takes up a relatively large proportion of their income. These households, especially in deprived areas, are much more likely to consume fast food than those in wealthier areas as they may struggle to afford ingredients to cook fresh meals. Also they may lack knowledge about the negative health effects caused by too much fast food and they are more exposed to fast food outlets such as McDonald’s as there is a higher concentration of them in England’s most deprived communities according to Public Health England.

Despite disproportionately affecting lower socio-economic groups, public health may start to improve over time if the consumption of fastfood decreases because it typically

contains high levels of salt, saturated fat, and calories, all of which can cause health problems such as obesity if consumed too often and in large quantities. This is especially important in children as 23.4% of year 6 children were recorded as obese in 2021/22 with this figure being higher amongst children from the most deprived parts of the country. Despite this, for many, fast food is still cheap, easy to access, and a habit-forming food, so higher prices may, unfortunately, have little effect in shifting consumer spending patterns from unhealthy products to healthy ones.

Why are oil giants making such big supernormal profits?

Bruno

BP has recently followed Shell in reporting record annual profits and the businesses are now providing billions in the form of dividends to their shareholders. In the mean time millions of British homes are preparing for a cost-of-living crisis prompted by the fall in supply for gas. These high prices generate huge revenues for the world’s leading fossil fuel giants. So how are they making so much money, and should the government intervene to reduce these supernormal profits?

The record profits of £23 billion and £33 billion, were recently announced for last year. In simple terms, their profits are high because they were able to massively put-up prices on the oil and gas they sell. As the data shows this has affected other oil and gas companies in much of the world, as well. Additionally, the costs don’t vary that much as the price goes up or down, but the money they make from selling it does.

For consumers and producers, the price of gas in the UK hit an all-time high of around £8.50 per therm last August, compared to around 50p in the early part of 2021. Meanwhile, oil prices also soared, to around 107 dollars per barrel in early June last year, from around 64 dollars a year earlier. Much of this was down to Russia’s invasion of Ukraine, launched over a year ago. On the other hand, both oil and gas prices have eased back from their recent highs. Oil now costs around 82 dollars per barrel, this is not an unusual figure,

historically. While gas prices have also significantly fallen from last year’s optimum but at around £1.50 per therm they are still much higher than they have previously been. So despite this, how are oil firms taxed in the UK? Well, oil companies already pay a tax on their profits from oil and gas production in the UK of 40% - which is higher than taxes on other companies. However there are strategies to reduce this bill, by deducting the cost of shutting down old oil rigs, or offsetting future investments from earlier years. After the invasion of Ukraine, the government faced calls to introduce an extra ‘windfall tax’ on energy company profits to help pay for soaring energy bills. This was introduced in May 2022 and increased from 25% to 35% in November. It is now expected

to raise around £40bn extra from all the companies operating in UK waters between 2022 and 2028. Although, recently politicians, environmentalists, trade unions and poverty campaigners have attacked oil companies’ record profits and argued for higher windfall taxes. Even the former Shell CEO, Ben van Beurden, wondered if it was inevitable that governments would need to tax energy producers more to protect the poorest in society. If the UK government decided to tax BP and Shell on their global profits more heavily, they could potentially move their headquarters out of the country - escaping the new tax and depriving the UK of much of the revenues they currently pay.

KitKat's rising prices

Jamie

This month KitKat lovers received some of the worst news since last year. Nestle, the world’s largest food conglomerate, announced on the 2nd of February 2023 its plans to raise goods prices after an initial 8.2% increase in 2022. Chief Executive Mark Schneider spoke at a press conference implying that further price rises were due to failing to meet profit forecasts last year, therefore hoping to up the firm’s revenue in 2023 to compensate. We ask the question why has Nestle failed to achieve its previous profit goals, and what are the causes for its economic shortcomings?

The main reason for this increase in price of its many common consumer goods (such as Nescafe, Aero, etc.) is because of the recent spike in commodity prices, drastically increasing the cost of production for the company, and reducing profit per unit sold. Therefore, by raising the price of their products, they hope to offset the impact of the higher cost of production, aiming to keep on track towards their 2023 turnover goals. A large contributor towards the inflation of commodity prices at the moment is the Russia Ukraine conflict, marking its first anniversary this month. Because these two countries have such extensive agricultural land and factories producing vital materials for production processes across the world, the sudden invasion has halted a significant proportion of exports instead using the land to focus on military practices. As well as the

addition to the numerous trading sanctions placed on Russia by NATO countries and reducing the supply of raw materials, this has led to supply bottlenecks, whilst demand has remained the same. As a result, commodity prices rose in order to ration off demand. Whilst Nestle should continue to raise its prices if it hopes to maintain its profit goals, the long-term effects could be more costly than a shortterm loss in monetary gain. Namely, if consumers begin to think that the price of the company’s products are too high, they may switch to an alternative good, again reducing the revenue for the firm. Because the market they are in is highly competitive and heavily saturated with substitute goods (such as Cadbury’s chocolate), it would be relatively easy for customers to change even if they are a loyal Nestle consumer.

Nonetheless, due to the firm’s widespread presence in countless domestic markets, these changes should be financially beneficial for them, as their prior influence on consumers will be enough to keep revenue at expected heights. However it is important to consider the longterm effects in decisions like these, as they could be far more detrimental than the initial problem itself.

oFCoM Investigates mobile phone & broadband suppliers over pricing

Sarah

In January 2023, the Consumer Price Index (CPI) was 10.1%, representing the average prices have risen in the 12 months prior. Inflation rates have not been this high since 1981, as they have averaged at 2.71% since 1989. This time of economic uncertainty and hardship is having knock on effects across every aspect of peoples’ lives. Unexpected mid-contract broadband and mobile phone price rises are adding more pressure to household expenses. As many broadband providers use the CPI (or RPI) in order to determine the prices of their services, many customers have seen price rises of over 14%. BT, PlusNet and Vodafone have all confirmed price rises of 14.4%, with TalkTalk also confirming a 14.2% rise. Some customers could face even harder financial burdens, as O2 and Virgin are yet to announce prices, which could rise by 17-18%. In 2021, 88% of all adults in UK had a smartphone, so these rises will further squeeze almost every household’s bills.

Consumers not prepared to bear mid-contract price rises, could opt for services from Tesco Mobile, Hyperoptic, Utility Warehouse or Zen Internet, who have all promised not to raise prices during a minimum contract period. This could offer wellneeded peace of mind to 1/3 of users who aren’t clear if their phone bills are likely to rise.

The whole picture finds consumers between a rock and a hard place, as customers face exit bills of between £122.40 (TalkTalk) and £219.04 (BT). This means households must accept unexpected price rises or pay in order switch and attempt to escape the squeeze. OFCOM, the regulator for UK communications services including broadband, TV, radio and postal services, has launched an investigation into the mid-contract broadband price rises. It has been suggested that exit fees should be removed, in order to create a more flexible market for consumers.

OFCOM already has rules stating

that telecoms providers must offer their customers the right to exit their contract penalty free if they surprise them with unexpected price rises. However, as many price hikes are part of consumer contracts, they do not qualify under these rules, giving customers no choice but to pay. For consumers looking to switch to a more affordable provider, it is essential to read the Terms and Conditions of the contract. There are widespread concerns about households’ ability to afford the higher bills. In 2021, 9.1 million households struggled to pay telecoms bills, and 17% have been forced to cut back on other spending such as food and clothing.

The unexpected price rises are therefore seen by many as unreasonable, as they build uncertainty and drain confidence from UK households, 36% (over 10 million) of whom are already facing significant financial hardship.

The 48-hour collapse of Silicon valley Bank

On March 10th 2023, the $200bn company ‘Silicon Valley Bank’ (SVB) collapsed, making it USA’s largest bank failure since the 2008 financial crisis.

The story behind the collapse

During the pandemic SVB’s services were heavily demanded. The overwhelming market shock that COVID-19 brought resulted in a hot period of growth of digital start ups, and inevitably exponential growth for well established tech companies. With SVB already having a strong reputation in the technology industry, growth of associated firms resulted in a large influx of deposits. SVB’s role was to look after and hold the cash that these tech firms used for payroll and other business expenses. As banks do, SVB decided to move the cash they had received elsewhere. However, in SVB’s case, it could be argued that they invested this money in the wrong place, or at the wrong time, or maybe in the wrong quantities. SVB decided to invest heavily in long-dated US government bonds, which are generally perceived as being a safe move. However, a problem arose when the Federal Reserve decided to rapidly increase interest rates in an attempt to combat the inflation present in The US economy. Bond prices have an inverse relationship with interest rates, which inevitably created problems for current, older bond holders (in this case SVB). This is because as interest rates rise, new bonds are issued with higher yields (return to an investor from the bond’s interest), which makes the older bonds less attractive, causing their value to fall. Thus, the value of US government bonds that SVB had invested in had fallen. Simultaneously, economic market

conditions changed dramatically, with many tech companies being especially affected. Consequently, many of SVB’s customers (tech firms and start-ups) began withdrawing their deposits, in order to keep their companies afloat. But, SVB did not have enough cash on hand to return the deposits, as they had invested too much into government bonds. To be able to pay back these firms quickly, SVB started selling some of its bonds at a total significant loss of $1.8bn. On March 8th, SVB announced its capital raising (selling bonds). Following this, fear was struck into investors and customers of SVB, alarming them that there were deep financial problems at SVB (They were extremely low on capital). As rational economic agents, the uncertainty resulted in investors and customers rapidly withdrawing their deposits. The herd mentality meant that more and more agents withdrew their deposits from the bank, until the bank officially collapsed on March 10th, just two days after their capital raising. The swift bank run can be attributed to the fact that SVB’s clients tended to have much larger accounts, unlike a usual retail bank. This meant that fewer clients (compared to a retail bank) had to withdraw their deposits for the bank to subside.

What has happened since the collapse?

The US Government decided not to save/bail out SVB, leaving it collapsed until another buyer can bring it back to life. However, on March 12th, US Financial Regulators did extend a guarantee to cover all deposits at the bank, meaning that all customers of SVB would be able to access their money the next day.

Elsewhere, The UK operations of SVB has been rescued. Shortly following the collapse on March 10th, HSBC decided to buy Silicon Valley Bank UK for £1 in a rescue deal. This saved thousands of British tech startups and investors from the monumental losses they may have faced. Despite the debt that this acquisition would place upon HSBC, they saw this purchase as making ‘Excellent strategic sense for our business in the UK’ and that ‘It strengthens their commercial banking franchise and enhances their ability to serve innovative and fast growing firms’ – Noel Quinn, HSBC Group CEO. Ultimately, the rescue from HSBC is a risk, but has the ability to create even greater success for HSBC’s banking franchise in the UK.

olly

Alumni Interview –Class of 2000

rob Evans –Executive Director at uBS

1. What is your current role at UBS?

I am an Equity Salesperson, which means I try to ensure my clients (largely mutual funds and hedge funds) are using the investment advice and services we offer at UBS, in order to make money for their clients (while paying us for those services). They do this by investing in the equity (shares) of companies you see quoted on indices such as the FTSE100 (UK) and the Dax (Germany). Ten years ago, the job would have been more about telling clients which shares to buy and sell…that is still a big part of the job but technology, regulation and the way our clients are now structured has changed the role significantly.

2. If you were Prime Minister what would you do?

I think the first four things I would do would be: raise inheritance tax to 75% (and abolish trusts) as I don’t see why wealth should just transfer from one generation to another. I would also add 5% Stamp Duty to purchases of UK property by non-resident buyers on the basis that those buyers are typically benefiting from UK infrastructure and security but not paying towards those services on an ongoing basis. I would raise the

ceiling of the pension allowance to encourage over 50s back to work and, lastly, charge people £1 for missed appointments on the NHS or missed lessons at school, via their tax code, using it to pay teachers and NHS workers more.

3. Favourite sandwich?

Roast turkey (with leftovers from Christmas Day).

4. What subject and where did you study for your undergraduate degree?

I studied Economics and French at University of the West of England in Bristol. It wasn’t my first choice, but I enjoyed the vast majority of it. Once I worked out the world didn’t revolve around me in my 3rd year, I knuckled down and achieved a 1st class degree. The best bit was that 3rd year of my degree I spent living and working in Grenoble. You never realise how little you know about a language until you have to use French every day. The second best bit was living in Bristol…it is a wonderful City and I met some brilliant people on my course and working in a bar to finance my studies. My advice would be to study something you love.

5. What made you enter the world of investment banking?

I wasn’t good enough to play cricket professionally and I didn’t fancy/couldn’t afford another four years at university studying medicine, which were my two passions. I interviewed with a stockbroking firm and LOVED it from that moment. Working for people I admired kept me interested and the constant mental challenge vs. financial reward of serving intelligent, driven clients keeps me coming back every day.

Alumni Interview –Class of 2000

6. What advice would you give to someone aspiring to enter into the world of investment banking?

Study whatever you like and look to get experience via ‘spring weeks’, internships and via organisations such as Bright Network. Use university societies, alumni of the school and current parents in the school to discover more about pathways and roles in finance. If/when you get the chance: demonstrate a passion (for anything), resilience (how you’ve responded to setbacks) and self-awareness (what you are and aren’t good at?). There are probably tens of books to read but I would start with Ray Dalio’s ‘Principles’ and Scott Galloway’s ‘Algebra of Happiness’. ‘Your Next Five Moves’ by Patrick BetDavid is also good when thinking about any career, not necessarily finance. Last tip, when you’re in your chosen profession: find a good mentor who has the skills to teach you and the personality and patience to do so.

7. What are best and worst aspects of your current role?

I host meetings with management teams of multinational companies and ask them about their strategy, financial performance, ambitions and anything else I want to, and it is a genuine privilege to do so. The worst bit? I’m not playing cricket or helping people in need of emergency care. That and the 4:50 am alarm every day for 18 years and counting.

8. What are your career goals for the future?

I want to fulfil my potential and make myself proud. That potential is constantly evolving while I’m learning, so it is difficult to put a target on it. If I had to say now, I would want to run a well-respected team within UBS. If you want specifics, I (think I) would LOVE to be UK CEO of UBS, but that is beyond my existing comprehension of my potential. Maybe one day…

9. Could you tell us a bit more about your gap years?

I spent 10 months living in France as part of my degree. I worked for Schneider Electric hosting TEFL lessons and interpreting technical instructions from French to English. The work wasn’t particularly fulfilling but the exposure to a big business such as Schneider was far more interesting than I realised at the time and stood me in good stead for working in a similar sized firm later in life. I have incredibly fond memories of the amazing people I met (starting a conversation in an internet café - before the days of 3G or WIFI - led to meeting 12 people with whom I shared much of the following six months), the liberty of living independently in a foreign country and the life skill of being able to communicate with more people in their native language, are all things I would never have achieved without that period in my life. Post-university, I worked at Pizza Express for

four months to save money for a flight to New Zealand to fulfil my ambition to play cricket in Auckland during the British winter. When I landed, I bought a £300 car from the side of the road, found a flat share in a newspaper advert and played/coached cricket 4 times a week. I was an average club cricketer, but I think people around the club recognised my desire and the willingness to embrace whatever opportunity I was afforded, and in a roundabout way, it led to the interview at the stockbroker I joined when I returned home. The great thing about independent travel at that age is you can arrive with nothing and leave with nothing, having lived an extraordinary, rewarding, hand to mouth, existence.

10. What are you currently watching on Netflix?

I don’t watch a lot of TV other than live sport (cricket, football, golf, UFC…anything really), but my wife and I are currently most of the way through Season 5 of ‘Drive to Survive’. I love getting a glimpse of a very empirical, highperformance world and seeing how different characters have all reached the top of their game in such different ways. My favourite TV show ever is ‘Afterlife’ by Ricky Gervais…and the ‘Inbetweeners’.

Mrs rees's portuguese Custard Tarts portuguese Custard Tarts (Tarta Nata)

Ingredients

4 egg yolks

2 tbsp cornflour

100g golden caster sugar

1 vanilla pod or 2 teaspoons vanilla

essence

1 teaspoon vanilla paste

1 cinnamon stick

Thick strip of lemon zest

250ml milk

250ml double cream

1 packet ready rolled puff pastry

1 tablespoon cinnamon powder

Instructions

1. Split the vanilla pod in half along the length and scrape out the seeds. Put the seeds in a medium-sized saucepan, along with the empty pod, the cinnamon stick and the lemon zest. Pour the milk and cream over the aromatics, stir and heat very gently until only just simmering.

2. Put the egg yolks and cornflour in a large heatproof mixing bowl and whisk in the sugar until pale and thick.

3. Pour the hot mixture over the egg yolks and whisk well. Pour the custard back into the pan and warm through for 2-3 mins or until thickened slightly to a consistency similar to double cream.

4. Strain the custard through a sieve into a large jug and set aside

5. Heat oven to 200C/180C fan/gas 6.

6. Unroll your pastry , sprinkle with 1 tablespoon cinnamon, roll it up tightly down the long length to create a long roll of pastry ( similar to a Swiss roll), then cut into 12 pieces, and turn them cut-side up on the work surface, so the spiral is facing upwards.

7. Carefully flatten them out until they are big enough to line the holes in the muffin tin, trying not to skew the spiral shape too much.

8. Press into the tins, then carefully pour in the custard mixture, filling each tart almost to the top.

9. Bake for 30 mins or until the pastry is cooked through and the custard is just starting to puff up but not balloon.

10. Remove from the oven and allow them to cool and sink gently back into shape.

vegan Tarte Nata

Ingredients

360g canned coconut cream, thick part only

310g soy milk, or any plant-based milk

55g corn flour / corn starch

65g sugar

2 tbsp vegan butter, optional for extra richness

1 tbsp vanilla extract

Pinch of turmeric

1 packet ready rolled puff pastry

1 tablespoon cinnamon powder

Instructions

1. To make the vegan vanilla custard, add all the ingredients to a saucepan and whisk until combined. Do this BEFORE you heat it up because sometimes the cornflour clumps up.

2. Cook the mixture while stirring constantly for about 10 minutes until it’s slightly thickened up. The custard can be taken off the heat when you lift the spatula and it leaves little ‘ribbons’ Pour into a jug to fill pastry cases as above.

YOU WILL NEED A 12 HOLE DEEP MUFFIN TIN