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UK government told to act now over cost of living crisis
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LONDON (Reuters) – The British government came under pressure on Monday to set out plans immediately to support families through a mounting cost of living crisis, with a leading
LONDON (Reuters) – The British government came under pressure on Monday to set out plans immediately to support families through a mounting cost of living crisis, with a leading business group and former prime minister saying a political vacuum cannot be allowed to last.
The Bank of England warned on Thursday a long recession was on its way as energy prices surge to unprecedented levels, pushing inflation to a 40-year high of 9.4% in June and leaving many households on the brink of economic hardship.
But the political response has been stymied by the race to replace Boris Johnson as prime minister after he was forced to quit over a string of scandals. While he remains in office, he has recently been on holiday and his successor will not be announced until Sept. 5.
Former Labour Prime Minister Gordon Brown and the Confederation of British Industry (CBI) said the country could no longer afford to wait for a new leader, with action needed now before energy prices leap again by an expected 70% in October.
Brown, the country’s finance minister for 10 years from 1997 and prime minister from 2007 to 2010 during the financial crash, said many households were facing an economic timebomb.
“Take action this week and deal with these multiple problems that amount to a national emergency,” he told LBC Radio. “You don’t wait till the crisis hits you in October and then say you’re surprised.”
The CBI agreed, urging the prime minister and finance minister to prevent a “summer of drift” by meeting the two candidates to replace Johnson – foreign minister Liz Truss and former finance minister Rishi Sunak – and agree a way forward.
Britain’s energy regulator Ofgem will publish its new domestic household price cap on Aug. 26.
“We simply cannot afford a summer of government inactivity while the leadership contest plays out followed by a slow start from a new prime minister and cabinet,” Tony Danker, CBI Director-General, said in a statement.
Johnson’s spokesperson said it would be up to the next British leader to decide whether further support was needed, and that the government had already put in place a funding package to help people this winter.
(Reporting by Kate Holton; Editing by Mark Potter)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured as an annual percentage change.
A financial crisis is a situation where the value of financial institutions or assets drops significantly, leading to a loss of confidence and potential economic downturn.
A household budget is a plan that outlines expected income and expenses for a specific period, helping families manage their finances effectively.
The Bank of England is the central bank of the United Kingdom, responsible for issuing currency, managing monetary policy, and ensuring financial stability.
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