Fears over the cost of living have reached new highs in the UK after power regulator Ofgem confirmed that the energy price cap will nearly double from October to cost the average household £3,549 a year. There has been much discussion about what the government needs to do to help people and businesses this winter, but the crisis is still being presented as a short-term problem that will ease in due course.
This is a misdiagnosis. We are actually living through a slow-motion crisis which has been decades in the making and is set to continue. Understanding what is really happening is a vital first step to finding a way out.
We are prone to blame today’s economic mess on short-term factors such as austerity, Brexit, COVID and the war in Ukraine. In fact, global economic headwinds have been gathering strength for years: according to a study reported in the New Scientist a few years ago, 1978 was the best year the world economy ever saw.
