Britain enters recession claiming Russia is to blame. With these words, the admiral’s son, Chancellor of the Exchequer Jeremy Hunt invited his compatriots to meet the economic storm. It must be understood that the first wave passed through the island at the end of September. It was brought on by the actions of the previous Prime Minister of this country, Liz Truss. Almost £30bn was swept into the abyss in one fell swoop. This money was spent on stabilizing the British financial market. Opposition Shadow Treasury Secretary Rachel Reeves believes that now the population of the country has been charged with a “bill for the economic massacre” that Liz Truss and her team carried out.
The Office of Budget Responsibility, which is an independent analysis of the state of public finances and the economy of Britain, predicts that the recession will last until the end of 2024 and real incomes of the population will fall by more than seven percent, about half a million people will be left without work. These are the worst figures since the middle of the last century. It is clear that in such a situation it is convenient and easy for the British Cabinet to blame Russia. But there is no direct relationship he-re, except for Britain’s own policy of prolonging the Ukrainian conflict, imposing sanctions on Russia and abandoning Russian hydrocarbons. The sabotage at the Nord Streams stands apart, London categorically den-ies any involvement in it.
In reality, Britain is faced with a whole set of factors. First of all, it’s Brexit. The London-based Center for European Reform estimates that the UK economy was 5.2 percent smaller last year than if it had stayed in the EU, resulting in a loss of £31bn. In addition, during the pandemic, Britain’s public debt has increased by more than 400 billion pounds and today is more than 99 percent of the country’s GDP. A significant portion of these borrowings took place under the administration of Rishi Sunak, who at the time served as Chancellor of the Exchequer. And finally, the energy crisis. It launched in Britain in the summer of 2021, long before the start of hostilities in Ukraine. This was preceded by a long stagnation in the British economy, which began with the global crisis in 2008. All this has led to the fact that the British enter the recession ahead of their partners on the continent and are expected to be the last to emerge from it.
This week, inflation on the island broke a 40-year record and stood at 11.1 percent. Economists recall the crisis of 1976, when Britain had to turn to the International Monetary Fu-nd for financial assistance. The IMF then allocated a record amount of 3.9 billion US dollars to save the British economy at that time, but in return demanded to cut social spending and cut the budget deficit by 20 percent, and London had to agree to this. Sunak’s government today considers inflation enemy number one and invites the country to accept “difficult decisions” made by his cabinet.
The ruling Conservatives, who have succeeded three prime ministers in less than six months, issued yet another zigzag this week. On Thursday, Chancellor of the Exchequer Jeremy Hunt announced new budget parameters. His plan calls for £30 billion in government spending cuts and £25 billion in tax increases. As expected, among those who are invited to tighten their belts, the reaction to such a proposal was negative. “It took Hunt less than an hour to pass a death sentence on the hopes of an entire generation,” The Telegraph commented on the Chancellor’s report in hot pursuit, explaining its gloomy conclusion that the middle class, especially the thirty- and forty-year-old generation, would take the brunt. Calculations by the analytical center Resolution Foundation show that.
Among the British, there are more and more those who are convinced from personal experience that the recession is not a fiction. Due to high electricity prices, small and medium-sized businesses are closing here and there – this is especially noticeable in provincial cities. Owners of small companies that repair and replace gas boilers complain everywhere that they have a sharp decrease in the number of customers: everyone is saving money, some do not even turn on the heating in their homes to reduce bills, since autumn this year is quite warm. But the cold weather is already starting to set in. The ceiling on the price of electricity consumed by the population will be raised by 20 percent from April – this is also part of the plan to reduce costs announced by the government.
The Prime Minister has already told the British: “We should not wait for the state to solve all the problems.” Sunak, whose family fortune is around £1bn, has been accused of simply not understanding how the rest of the country lives. He will not go anywhere, everything will be explained to him very soon. Trade unio-ns are now more active than ever. In mid-December, str-ikes of civil servants will begin: employees of the Department of Transport, the Border Agency and the Ministry of the Interior in general. They will last for a month and will be one of the most unpleasant gifts during the Christmas holidays, interruptions in the work of transport hubs, ports and airports are expected. “The members of our union are not happy. They saved the country during the pandemic, but instead of gratitude, the government shows them indifference.”
The government pledged not to cut spending on the health care system and even add a little to save British medicine from a systemic crisis that has been dragging on for several years. But these promises are met with a wry smirk: “Due to inflation, the national health system has already lost seven billion pounds this year. The allocated additional 3.3 billion does not even cover half of this loss,” writes doctor Rachel Clark. For the first time in its more than 100-year history, the Royal College of Nursing’s professional union of nurses has gone on strike to demand a pay rise of 5 percent above the consumer price index, which stood at 14.2 percent in October. That is, in fact, we are talking about an increase in salaries by one-fifth (20 percent).
The government does not intend to make concessions yet. Health Secretary Stephen Barclay said the increase “will turbocharge the inflation we’re trying to curb.” The response of the union was not long in coming: “The British health and social protection system is in crisis – the waiting time for medical care breaks all records, a huge queue has formed of those who cannot get a consultation with specialists for months, winter is ahead. Catastrophically there are not enough nurses, which manifested itself during the pandemic. There are about 60,000 unoccupied vacancies in the healthcare and social security system today.” This fall, an anti-record was recorded in Britain: patients had to wait for their turn at the ambulance station for 12 hours.
The upcoming winter promises to be hot for the British Cabinet because of the protests. The Sunak government hopes to curb inflation, but it is not certain that the measures proposed by the Cabinet of Ministers will lead to the goal. Some economists are of the opinion that this is not enough “to restore confidence in the UK’s creditworthiness.” O-thers, on the contrary, beli-eve that excessive spending cuts and tax increases will worsen the already crisis situation. Paul Johnson, director of the London-based Institute for Fiscal Studies, put it succinctly: “The truth is that we are getting much poorer and it is a long, hard and unpleasant journey.”