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Good Morning Friday 8th May 2026
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News & politics
Britains economy
(104 Posts)Very gloomy forecast.
Period of stagflation forecast. Which means rapidly rising prices and a contracting economy.
The economy ground to a halt in February and
Contracted even more in March. Let’s hope that the jubilee helps a bit.
Rising prices are inflicting countries world wide, but economists say that Britain is facing particular issues.
Britains labour market is very tight for two reasons - long term sickness and Brexit which took away a large labour pool.
Disposable income is expected to drop to 1.75% and consumer Confidence at a 14 year low, which means businesses are nervously trying to calculate how far they dare push prices before their customers start to fall away.
Businesses who trade with Europe are facing a huge level of red tap, adding to the cost burden that never existed before, and this will add an extra 6% to inflation, which is why we are seeing inflation in the U.K. higher than other European countries. Food prices in particular are rising, but it is across the board.
Energy prices are set to rise again in October by a further £800
Sterling is very precarious at the moment with the Bank of America saying that because of the instability caused by the British governments actions and lack of substantive planning, Sterling is being treated like an emerging currency causing its value to fall which of course will have a further effect on rising inflation.
Johnson has little options in trying. to mitigate any of this, other than resign and Britain to have a government that can bring stability and economic integrity. There is a call to cut taxes which this government has raised to the highest level since WW2. But this will barely touch the surface.
Time to baton down the hatches.
I think that the difference between the causes of stagflation now and the 1970s is that yes there is a supply crises, but what we don’t have is wage/inflation. So reducing the supply of money in the economy by raising interest rates makes zero sense to me.
The U.K. economy needs expanding not reducing, and in the meantime, protect as far as possible the most vulnerable people in communities throughout the U.K.
I’m going to shut up now as I’ve chortled long enough??
MaizieD
^The government is spending too much on “unproductive” activities - spending that does not return a profit,^
Would you care to tell us what unproductive activities you are referring to, Katie59, and why government should 'make a profit'?
This harks back to the Thatcher era, closing the mining, steel and shipbuilding industries and throwing the workers on the scrap heap.
Closing strategic industries was a big mistake because the so called “service” economy has not provided jobs in the workers. Those industries needed modernizing not destroying, investment should have been made instead of paying benefits. University education was expanded half the children went to “Uni”, there never were the jobs to sustain that level and half the graduates failed to find suitable work. Several rounds of NHS reorganization has resulted in massive waste and a service close to collapse.
The manufacturing we do have is mostly controlled by foreign companies, our electricity, gas and oil utilities are also controled by foreign companies. How can a nation thrive when we have deskilled the workforce totally, investment decisions are made by foreigners and the profits go overseas.
Thorsten Bell of the Resolution Foundation has done some research about worker mobility. Young people in deprived areas with high unemployment have much lower educational qualifications and less participation in higher education than young people in leafier suburbs and cosmopolitan towns and cities. They have lower aspirations and get "stuck" in areas with declining industries and can't earn enough to move out.
Contrary to what some people seem to think, there is a very strong correlation between better education (including higher education) and employment and well-paid work. Young people often leave home to go to university, find a job in another part of the country or world and never go back.
People from wealthier areas initially can't afford to live in the area where they grew up, but by the time their own children are school age and they're mid career, they sometimes do go back, if there are jobs available.
I'm afraid it's not quite so simple as keeping traditional industries going. A lower cost of living means that workers in third world countries can produce goods for a fraction of the price. This has long been an issue. Remember the Corn Laws from school? The price of protectionism is higher prices for consumers.
PS. I agree there should have been investment, particularly in steel, but that was never going to happen after steel was privatised and UK industries were just a few words on a foreign balance sheet.
I don't agree with subsidising coal. The UK has the technology and expertise to be at the very forefront of renewables and provide millions of jobs and income for the country, but there are too many naysayers.
All I ever see on this programme is Labourites bleating, and whingeing, because they are not in power in the Government. All I can say is God help us if they do get into power, with no plans to mention.
Just watch your taxes go up if they do get into power.
YOU HAVE BEEN WARNED!
Johnson is good at ambiguity - appearing all things to all - and good at verbal fireworks which distract. Otherwise he's useless at governing and certainly won't solve economic problems.
usuallyright
All I ever see on this programme is Labourites bleating, and whingeing, because they are not in power in the Government. All I can say is God help us if they do get into power, with no plans to mention.
Just watch your taxes go up if they do get into power.
YOU HAVE BEEN WARNED!
??? higher taxes. This government has raised taxes to the highest level since the last war.
usuallyright
All I ever see on this programme is Labourites bleating, and whingeing, because they are not in power in the Government. All I can say is God help us if they do get into power, with no plans to mention.
Just watch your taxes go up if they do get into power.
YOU HAVE BEEN WARNED!
Which programme are you talking about usuallyright?
This government have reigned over the highest taxes and highest inflation since the 1950s - yet we are suppose to think they are the best at running the economy??
Watch out for more giveaways as we near the election as a sweetener or earlier if Boris’ dissenting MPs calling for tax cuts get a bribe to switch to supporting him. At least those pristine Nightingale hospitals could come in handy as modern day workhouses
Message withdrawn at poster's request.
growstuff
Thorsten Bell of the Resolution Foundation has done some research about worker mobility. Young people in deprived areas with high unemployment have much lower educational qualifications and less participation in higher education than young people in leafier suburbs and cosmopolitan towns and cities. They have lower aspirations and get "stuck" in areas with declining industries and can't earn enough to move out.
Contrary to what some people seem to think, there is a very strong correlation between better education (including higher education) and employment and well-paid work. Young people often leave home to go to university, find a job in another part of the country or world and never go back.
People from wealthier areas initially can't afford to live in the area where they grew up, but by the time their own children are school age and they're mid career, they sometimes do go back, if there are jobs available.
I'm afraid it's not quite so simple as keeping traditional industries going. A lower cost of living means that workers in third world countries can produce goods for a fraction of the price. This has long been an issue. Remember the Corn Laws from school? The price of protectionism is higher prices for consumers.
Interesting on worker mobility Growstuff. The paper highlights three areas, although its job is not to go into detail on the changes needed. They are:
The first is to grow the national economy.
Second is local and regional economic development. Here they add an interesting comment. There is actually a lot of positive experience, accumulated over many decades, about how to deliver successful Levelling Up. Indeed, to dismiss previous experience as a ‘failure’ is quite misleading, even if it has too often been the case that the genuine progress that has been made has been offset by continuing job losses from older industries. Investment in infrastructure is important, but so too is support for business, including regional investment aid – a tool the UK government has recently neglected despite its effectiveness over the years. Investment in skills and in R&D have roles to play as well. In truth there never has been a single ‘silver bullet’ that can deliver Levelling Up
The third is is support to help individuals engage with the labour market.
My thoughts after reading this, and all your comments, are that this has to be more about moving jobs/industries than moving labour. I would have thought this would be an excellent time to do this too.
usuallyright
All I ever see on this programme is Labourites bleating, and whingeing, because they are not in power in the Government. All I can say is God help us if they do get into power, with no plans to mention.
Just watch your taxes go up if they do get into power.
YOU HAVE BEEN WARNED!
People get an idea in their head, in this case "Labour will increase taxes, Tories will not increase taxes" and that idea seems to stick no matter what.
This Tory Government has increased taxes to the highest level for years, but this fact has not registered, the original idea overrides the evidence.
usuallyright
All I ever see on this programme is Labourites bleating, and whingeing, because they are not in power in the Government. All I can say is God help us if they do get into power, with no plans to mention.
Just watch your taxes go up if they do get into power.
YOU HAVE BEEN WARNED!
If that's all you can see, have you tried Specsavers?
Ilovecheese
usuallyright
All I ever see on this programme is Labourites bleating, and whingeing, because they are not in power in the Government. All I can say is God help us if they do get into power, with no plans to mention.
Just watch your taxes go up if they do get into power.
YOU HAVE BEEN WARNED!People get an idea in their head, in this case "Labour will increase taxes, Tories will not increase taxes" and that idea seems to stick no matter what.
This Tory Government has increased taxes to the highest level for years, but this fact has not registered, the original idea overrides the evidence.
Isaac Asimov called it the culture of ignorance Ilovecheese that leads to people believing their ignorance of a topic is equal to someone else's knowledge.
usuallyright is wrong if she or he thinks the Tory party haven't increased taxes.
Last year the Taxpayers' Alliance reported that the Tories had made 1651 tax changes since 2020 63% of which were *tax rises*: air passenger duty, alcohol duty, apprenticeship duty, bank levy, business rates, capital gains tax, carbon price floor, climate change levy, company car tax, corporation tax ... on and on ... fuel duty, gambling duty income tax, insurance premium tax, landfill tax, national insurance, stamp duty, tobacco duty, VAT, vehicle excise duty ...
They reported that Britain already has the highest sustained tax burden in 70 years.
Labourites bleating and whingeing as usuallyright claims is what others call opposition. It's their job.
One thin.g we can be glad about is that we don’t have to give our children away because we cannot afford to feed them as in Beirut or be hungry as in Chad and other African countries.
World beating
Projected growth in 2023
OECD countries (minus Russia)
?? 9.0%
?? 6.2%
?? 4.9%
?? 4.7%
?? 3.0%
?? 2.6%
?? 2.5%
?? 2.5%
?? 2.2%
?? 2.1%
?? 1.9%
?? 1.8%
?? 1.7%
?? 1.4%
?? 1.3%
?? 1.2%
?? 1.2%
?? 1.2%
?? 0.0%
“Johnson has little options in trying. to mitigate any of this, other than resign and Britain to have a government that can bring stability and economic integrity”
There is no rational connection between the PM resigning and any subsequent government bringing stability and economic integrity. It can only be an opinion that it would. However, it is extremely unlikely that a resignation at this point would bring anything but chaos and confusion given the world political and economic situation.
Lilyflower
“Johnson has little options in trying. to mitigate any of this, other than resign and Britain to have a government that can bring stability and economic integrity”
There is no rational connection between the PM resigning and any subsequent government bringing stability and economic integrity. It can only be an opinion that it would. However, it is extremely unlikely that a resignation at this point would bring anything but chaos and confusion given the world political and economic situation.
Of course it is an opinion, as is yours that suggests that resignation would bring chaos and confusion.
I think that it would bring, certainly in the short term, stability to Sterling and relief all around in the U.K.
We have chaos and confusion at the moment, Lilyflower and Johnson remaining in post will just make it worse as he bounces around from one Big Idea to the next with no idea how to implement them, just in the hopes that something will appeal enough to the electorate to make him the vote winner he thinks he should be.
As it is, his party is deeply divided and haven't given up on the idea of getting rid of him.. They are threatening voting abstentions which would destroy his majority and make it impossible for any bills to pass. His legislative programme wouldn't be driven by him, but by any concessions he has to make to various factions.
When it comes to spending money he doesn't have the support of his chancellor; another impediment to implementing any Big Ideas that might cost anything...
He just isn't capable of dealing with any chaos and confusion.
I understood many European givernments allowed energy costs to consumers to rise 4 - 5% the public purse absorbing most of the costs. Had UK done this too prices would not have increases quite so much. Those governments could then do battle with the energy companies to reduce/recoup costs.
I am in USA… and believe me inflation has not petered out… I’m the one petering out! ?
Very interesting!
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