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Britain’s Economic Unraveling May Be Boris Johnson’s Real Legacy

1 6 1
16.08.2022

Much of the world is reeling from high inflation and sluggish economic growth, triggered in part by the pandemic, and the energy and food crises that Russia’s war against Ukraine has exacerbated.

Yet some countries are doing worse than others are. Post-Brexit Britain is particularly vulnerable. It is isolated from its erstwhile European partners, its European imports and exports subject to vast amounts of paperwork, tariffs and inspections, and already suffering a rolling political upheaval — Boris Johnson is the third prime minister since the Brexit vote to be undone by Conservative Party parliamentary colleagues revolting against their political leaders, and, at the same time, Britain is now facing fierce economic headwinds.

The U.K.’s current rate of inflation is 9.4 percent; and housing, food prices and fuel costs are all soaring at far more than this rate. Some experts now believe it likely that, in contrast to the U.S., where inflation may have peaked, by the start of 2023, inflation in the U.K. will hit an unprecedented 15 percent.

In part this inflation spiral is being worsened by a weakening pound — the British currency is currently worth only about $1.22, nearly 15 percent off its peak from the past year, and about a quarter off where it was just before the Brexit vote. Since oil is priced in dollars, that has led to a huge hit on British consumers; currently, drivers are paying close to $9 per gallon in the U.K., which is more than double the average price for U.S. consumers, and more than what consumers in every country within the EU except Finland are paying.

If anything approaching 15 percent inflation does in fact materialize, the country, which is already facing a summer of industrial actions across a wide range of industries — a labor rebellion unlike anything seen since the 1970s — will likely experience even more strikes and wildcat walkouts as hard-hit workers seek to recoup a standard of living currently being ravaged by inflation.

Moreover, the International Monetary Fund (IMF) now predicts that Britain will have the lowest economic growth of all the G7 nations in 2023, at a mere 0.5 percent. For the many millions of British families already living on the economic margins, a prolonged period of stagflation — low growth combined........

© Truthout


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