(Inflation - Erhui1979/Getty Images)
Brits are unsure and worried about the future of Britain due to Conservatives Rishi Sunak and Liz Truss, following their pledges in the campaigns to be the next Prime Minister at number ten.
IFS (The Insititute for Fiscal Studies) told the BBC, ‘large, permanent tax cuts could add to pressures on the public purse as the economic outlook deteriorates.’
Carl Emmerson, deputy director of the IFS, told the BBC that both candidates’ plans would be unaffordable without spending cuts - none of which have been proposed by the campaigns.
“These tax cut promises are unrealistic unless they’re going to set out detailed, deliverable spending cuts on a comparable scale,” he said.
“In reality, there will be a need to spend significantly more, especially given the pressures on households with energy bills.”
This claim follows the steepest rise in inflation for forty years, mirroring the same number since 1970’s Britain, according to many of today’s newspapers.
The Bank of England is warning that we as a country will hit another recession if this continues the way it is currently going.
Former Foreign Secretary Liz Truss, now Prime Minister at Number ten, promised cuts to the upcoming National Insurance increase and has planned to cancel a tax on corporations.
Many socio-political factors are affecting the public with a drop in employment, a rise in bills for electricity and heating, with the war in Ukraine having a knock-on effect for the UK and for the rest of the world, in terms of fuel prices and grocery shopping, with items like sunflower oil besides power production being affected for everyone.
According to the UK Parliament’s commons library’s economic update in February, the conflict exacerbated inflation.
The update states that ‘Prior to the conflict in Ukraine, inflation was expected to peak in April 2022. This is when the new default price cap on household energy bills comes into effect in Great Britain. The price cap will be 54% higher than it is currently, likely pushing inflation over 7%.’
These impactful changes have now been confirmed in recent events, with the possible effects being forecasted back in March by BBC’s Business reporter, Lora Jones, as the UK and Europe put sanctions on the imports and exports from and to Russia to try and deter the progress of the war.
The article states, ‘The UK gets only 6% of its crude oil and 5% of its gas from Russia, but the EU sources nearly half of its gas from the country.’
‘If one country reliant on Russian supplies receives less gas, they have to replace it, impacting the supplies of gas for other countries - that’s why British energy prices and bills are still affected in a similar way to European ones.’
Fuel for cars, heating, electricity, energy, and food shopping has already been affected.
However, the UK doesn’t import much food from either country.
Instead, Europe does, earning Russia and Ukraine the nickname ‘The breadbasket of Europe.’
However, the production of things like packaging and aluminium used for canned food, ideally bought in times of recession because of the longer storage times, is affected.
The World Economic Forum’s Article from the same month this year details the global effect, with the World Trade Organisation (WTO) adding how ‘Prospects have darkened’ for international trade.
‘The war in Ukraine has created immense human suffering, but it has also damaged the global economy at a critical juncture. Its impact will be felt around the world, particularly in low-income countries, where food accounts for a large fraction of household spending,” Director-General Ngozi Okonjo-Iweala said. ‘Smaller supplies and higher prices for food mean that the world’s poor could be forced to do without. This must not be allowed to happen.’ ‘-In a crisis, more trade is needed to ensure stable, equitable access to necessities. Restricting trade will threaten the wellbeing of families and businesses and make more fraught the task of building a durable economic recovery from COVID‑19,’ the Director-General went on to say.
The war in Ukraine recently has been affecting Europe’s power sources as Russian soldiers refuse to leave a power plant they have taken over, suspected to be used as a military base.
Due to this, the BBC has reported that the EU has been told to have years of ‘terrible winters’, as predicted by Belgian Energy Minister Tinne Van der Straeten.
“The next five to 10 winters will be terrible if we don’t do anything,” she said. “We must act at source, at European level, and work to freeze gas prices.”
“We have to stop this madness that is happening right now on energy markets,” Austria’s Chancellor Karl Nehammer said.
He said electricity prices must go down, calling on the EU to decouple electricity and gas prices.
“We cannot let [Russian President Vladimir] Putin determine the European electricity price every day,”
With the EU getting restricted supplies of gas, oil and electricity, which are being separated, instead of supplies being bought together by each country, as prices hike and countries supporting the war-stricken country of Ukraine try to secure alternate supplies.
The people of the UK and EU are asking: Can we survive the winter’s approach without Russia’s oil supply with the price heavily inflated?
The EU has an upcoming ban on ‘all Russian oil imports which come in by sea by the end of this year.’
According to a BBC Reality Check report, ‘The EU says its latest sanctions could cut the amount of oil it buys from Russia by 90%. However, this will take months to come into full effect, and even then, Russia will be able to sell oil elsewhere in the world.’
Heating prices will likely increase further if Russian gas exports to Europe are restricted.
The report says, ‘In the UK, household energy bills have been kept in check by an energy price cap.
But bills rose (between) £700 to about £2,000 in April when the cap was increased… (and are predicted to) hit more than £3,500 for a typical household from October when the cap goes up.’
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