The United Kingdom, a country that had once made its dominions around the world and carried the flag of colonialism, is in political and economic crisis. Today, the UK is standing at a place where it is finding it difficult to fulfill essential items like energy needs. The Bank of England has reported that the UK economy is going to be negatively with with recession due to inflation. It is in critical condition which could be the longest financial inflation since the 2008 global financial crisis.
In September 2021, the UK witnessed a ‘panic buying’ situation forcing some fuel stations to shut down. The Bank of England has increased its interest rate by 3% and has warned about the upcoming recession. According to National Institute of Economic and Social Research , we may witness the 2.5% fall in the average disposable income of the country.
Experts told that unemployment would increase by 5% due to a fall in demand. International Monetary Fund and Organization for Economic Co-operation and Development are also forecasting something similar.Due to this recession, the cost living has increased so much that its profound impact is seen in household incomes. Where the price rise was balanced by the wage rise in the rest of Europe, this is not happening in the UK. It is also becoming difficult for UK customers to buy essential items.
Why UK became prey to economic crisis
• The effect of Brexit is visible on Britain’s demography. Once a global Empire has now become unwelcoming for foreigners.
• After the UK’s exit from the European Union, it became challenging to balance inflation and growth due to trade barriers and labor shortages. Therefore it became difficult to control inflation and interest rates.
• The problems of Brexit also made post pandemic recovery difficult for Britain. During the lockdown, global supply chain s were disturbed due to factory closures, transport and labor disruptions and rising energy prices.
• Russia- Ukraine war has the biggest impact .
This is the word that is being used today to describe the economic situation of the United Kingdom.
Stagflation consists of two words: stagnation and inflation. This is the condition in which there is slow growth with rapidly rising prices, same wages and increasing unemployment. It is usually caused by economic or Geopolitical shock , shortage of skilled workers etc
All these facts tell us that the condition of UK is quite vulnerable and complex. The UK economic crisis wil affect the people in upcoming winter.
in conclusion, the political leadership of Sri Lanka and the UK has a significant role in both countries vulnerable economic conditions. The cost-of-living crisis is a significant threat to British citizens for the upcoming winter.
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Asking questions are in fact nice thing if you are not understanding anything totally, but this paragraph offers good understanding even.|