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.
