The inflation is shot at United Kingdom. has triggered the strike waveis the central and practically unique issue of the conservative primaries and it is drowning the citizens, who have seen how the shopping basket has increased 630 euros per year per person, according to the firm Kantar. Last week, the national strike of the railways paralyzed the country and the subway and buses from London to the capital.
The dockers of Felixstowe, the country’s main freight port, have called an eight-day strike, which is going to have a strong impact on the day-to-day life of citizens because half of British imports and exports pass through there in containers. Food, clothing, car parts or electronic products are paralyzed at the port. This Friday the post office will start and this Monday the public defenders they have voted to go on strike from September 5.
The workers ask salaries commensurate with the high cost of living. Inflation has already reached 10.1%the largest since 1982. The Bank of England predicts that it will reach 13% in October. However, the bank citi has calculated that it will rise to the 18.6% in January of 2023 as bills from the light soar and that the central bank will have to revise its prediction and raise it. The last time the UK reached those levels, 18%, was in 1976, when it had to be bailed out by the International Monetary Fund (IMF).
Rebound of gas and electricity
Citi predicts that the maximum price of the energy bills in the United Kingdom will go from the current 2,330 euros to 6,877 euros in April after the additional rise of 25% and 7% of the prices of the gas and the electricity In the past week. He also believes that the retail price index (which includes the CPI plus mortgage prices) will reach 21%. Right now it is at 12.3%. The Bank of England has already raised by 0.5% interest rates at the beginning of the month until 1.75% and Citi advises that it might have to raise them to 6% or 7%.
Since the resignation of Boris Johnson on July 7, the country has had a caretaker government. The Conservative Party is holding primaries to elect a new leader of the formation who will become, in turn, a new Prime Minister replacing Johnson. Over the last few weeks, as inflation soars and strikes continue, there has been talk of power vacuum because the Executive cannot make decisions that compromise the new leader and Johnson continues vacation through the Greek islands.
Truss versus Sunak
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The debate between the two candidates to succeed Johnson focuses on how to deal with this cost of living crisis and how to lower inflation. the great favourite, Liz Trussbet on one lower taxes of nearly 60,000 million euros, a proposal supported by the majority of the party’s militants, who are the ones who have to choose the new leader. Truss offers a package of economic aid to families so that they can pay the electricity bill that Citi estimates will be higher than its calculations and could reach 47.3 billion euros.
For its part, Rishi Sunakwho was Johnson’s finance minister and forced his downfall, advocates to raise the taxes in order to lower inflation in the long run. Sunak accuses Truss of being unrealistic with his promises and of wanting to lead the country into an “inflationary spiral.” “The reality is that Truss cannot deliver a support package and deliver $60 billion in unfunded, permanent tax cuts in one fell swoop,” Sunak said. “To do so would mean increasing indebtedness to historic and dangerous levels, putting public finances in serious jeopardy and plunging the economy into an inflationary spiral.” This is the great primary debate. The new prime minister will be elected next September 5. The new leader will inherit an economically broken country and will have no room for error.