Politicians are always keen to tell us either how marvellous things are now or, alternatively, how marvellous things will be once they have their hands on the levers of power. From Gordon Brown’s “no more boom and bust” through to Boris Johnson’s “build back better”, our political leaders tend to lack humility when it comes to delivering economic progress. They’re not so good, however, when the economy takes a turn for the worse.
That, unfortunately, is where we now appear to be heading. Ahead of next week’s Spring Statement, Rushi Sunak has been having economic history lessons, trying to get to grips with the 1973 oil price shock. It’s a sensible move. The UK’s reaction to the quadrupling of oil prices that year was one of the worst among the world’s industrial nations. Both inflation and unemployment surged, leading to a far more extreme version of “stagflation” than elsewhere. Britain became known as the “sick man of Europe”.
