Liz Truss may have won the battle to become Britain’s next prime minister, but don’t expect much time for her to settle into office. People’s living standards are predicted to fall by an unprecedented 10% over the next two years, driven by rising prices of energy and other goods.
The UK economy is facing a recession by the end of this year, with virtually no economic growth predicted until 2024. Inflation, already at 10%, could rise, according to some forecasters, to over 20%. This will hit public services like health, education and policing which are already being strained by tight government finances.
Meanwhile, the crisis is highlighting the UK’s long-term structural problems: it lags behind rivals in terms of economic growth, inequality and productivity. Real incomes for most households have not grown for the last decade, while there has not been enough investment to raise productivity.
