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09-06-2022, 01:38 PM
PUBLISHED JUN 8, 2022, 1:32 PM SGT
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Britain is staring down the spectre of stagflation, a ruinous mix of stagnant economic growth and rapid inflation.
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While there aren't strong unions pushing up wages across the country or rising ranks of unemployed people as there were in the 1970s, there are just enough flickers of stagflation to cause alarm.
Britain is experiencing the fastest pace in consumer price growth in four decades, with a 9 per cent inflation rate. Economic growth ground to a halt in February and then contracted slightly in March.
The situation is expected to worsen: Inflation will peak above 10 per cent this year and the economy will contract next year
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expects his energy costs to rise in November to £48,000 a year from £19,000. At his other pub, The Boot, a stone's throw away in St Albans, energy costs will triple.
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"Many people have not lived or worked through a high inflation environment, and we just don't know, therefore, what the impact will be," she said.
......
Rising prices are inflicting pain around the world, and recession warnings are flashing in Europe and the United States, but there is a concern that Britain faces more persistent problems as it suffers the worst of the problems in Europe and the United States.
"We are acutely exposed to the European energy price shock, and, like the US, we have a tight labour market," Mr Rishi Sunak, chancellor of the Exchequer, told lawmakers late last month.
......
While statisticians say most of the acceleration in inflation can be attributed to energy, above-average price increases are spreading to more goods and services.
......
"There still is a lot of momentum to go before all of those business-to-business prices turn into consumer prices," she said.
Britain's tight labour market is also stoking inflationary pressures. For the first time, there are more job vacancies than people looking for work. This is pushing up wages - not enough to keep up with inflation but enough to trouble central bankers.
At the Bank of England, officials have been surprised by the scale and persistence of the drop in the size of the labour force since the start of the pandemic, as long-term sickness keeps hundreds of thousands out of work.
Running beneath all of this is Brexit. A large European labour pool is no longer easily accessible, or as interested in working in Britain.
......
The Treasury swooped in last month with £15 billion in support for households after mounting pressure from opposition politicians and economists. Every household will get £400 off their bills in October, and millions of people living on low incomes or retirees receiving government aid or people on disability payments will receive several hundred pounds more this year.
Even with that government aid in mind, Mr Andrew Goodwin, chief Britain economist at Oxford Economics, expects consumer spending will slump in the second half of the year. But the country should avoid a recession, he said, and next year his outlook tentatively improves.
Better to read full long article at: https://www.straitstimes.com/world/europ...e-warnings
......
Britain is staring down the spectre of stagflation, a ruinous mix of stagnant economic growth and rapid inflation.
......
While there aren't strong unions pushing up wages across the country or rising ranks of unemployed people as there were in the 1970s, there are just enough flickers of stagflation to cause alarm.
Britain is experiencing the fastest pace in consumer price growth in four decades, with a 9 per cent inflation rate. Economic growth ground to a halt in February and then contracted slightly in March.
The situation is expected to worsen: Inflation will peak above 10 per cent this year and the economy will contract next year
......
expects his energy costs to rise in November to £48,000 a year from £19,000. At his other pub, The Boot, a stone's throw away in St Albans, energy costs will triple.
......
"Many people have not lived or worked through a high inflation environment, and we just don't know, therefore, what the impact will be," she said.
......
Rising prices are inflicting pain around the world, and recession warnings are flashing in Europe and the United States, but there is a concern that Britain faces more persistent problems as it suffers the worst of the problems in Europe and the United States.
"We are acutely exposed to the European energy price shock, and, like the US, we have a tight labour market," Mr Rishi Sunak, chancellor of the Exchequer, told lawmakers late last month.
......
While statisticians say most of the acceleration in inflation can be attributed to energy, above-average price increases are spreading to more goods and services.
......
"There still is a lot of momentum to go before all of those business-to-business prices turn into consumer prices," she said.
Britain's tight labour market is also stoking inflationary pressures. For the first time, there are more job vacancies than people looking for work. This is pushing up wages - not enough to keep up with inflation but enough to trouble central bankers.
At the Bank of England, officials have been surprised by the scale and persistence of the drop in the size of the labour force since the start of the pandemic, as long-term sickness keeps hundreds of thousands out of work.
Running beneath all of this is Brexit. A large European labour pool is no longer easily accessible, or as interested in working in Britain.
......
The Treasury swooped in last month with £15 billion in support for households after mounting pressure from opposition politicians and economists. Every household will get £400 off their bills in October, and millions of people living on low incomes or retirees receiving government aid or people on disability payments will receive several hundred pounds more this year.
Even with that government aid in mind, Mr Andrew Goodwin, chief Britain economist at Oxford Economics, expects consumer spending will slump in the second half of the year. But the country should avoid a recession, he said, and next year his outlook tentatively improves.
Better to read full long article at: https://www.straitstimes.com/world/europ...e-warnings
![[+]](https://sgtalk.net/images/bootbb/collapse_collapsed.png)
