T.He was sobered by the news this week that inflation hit its highest level in 40 years, even as wages fell at the fastest pace in 20 years. It doesn’t matter. Gasoline He doesn’t have to be an economist to see how much prices have risen this year, from pumps to supermarket checkouts to direct debits. Inflation of 10% is a remarkable number, but it is expected to be higher. Unless the government responds to an energy bill, inflation will soar again as he is expected to rise 80% on October 1st. Analysts expect gas and electricity prices to continue rising into the new year. And where energy prices are going, so are all other costs, from food to clothing to transportation.
Britain is not alone in this turmoil, but its position is among the most precarious in the world of wealth. Privatization means the UK government has little control over the prices set by electricity companies (unlike EDF’s Emmanuel Macron, for example). British workers, on the other hand, have far less bargaining power than French or German workers. Then, in addition to Brexit, politicians and economists have long hypothesized that Britain would not have to own or manufacture much of what it consumes, but could buy it all. As a result, UK inflation, the US, Japan, Germany, France and financial markets are expected to remain so in the coming year.
Even before Russia invaded Ukraine, 2022 was set to be shaped by the cost of living. First, the Bank of England will continue to raise interest rates, most likely to trigger a recession that will hurt businesses and workers. Treat it as evidence that the economy is settling, not as a thing. Second, the next prime minister will not have the war money they wanted. In March this year, the Office of Budget Responsibility calculated that the Conservative government had £30bn of “financial headroom” due to tax cuts and increased spending. is applied to the interest of Throughout this Tory leadership campaign, economics has been discussed like something strange in his bubble. That bubble is painfully heading for a sharp pin.
Finally, the Conservative Party is planning a full-scale confrontation with the trade unions. Public sector workers are seeing their wages fall below what they are billed after more than a decade of cuts in real wages, and are the workers most likely to join a trade union. There is also. Governments are well aware of this, but do little to alleviate the actual suffering felt by nurses, teachers and other critical workers. It means that ministers want a fight. If so, they won’t disappoint. Given the combat readiness of union leaders like Sharon Graham, this is most likely going to be a winter dominated by industrial struggle.
It’s worth remembering that many of Margaret Thatcher’s projects focused on keeping prices down by hitting workers. In that regard, not much else, she’s been surprisingly successful. And in the intervening decades, Westminster has been plagued by a sense of class conflict. Now. Not very long.