The UK is “in full stagflation”, according to the director-general of the CBI, the country’s main employers’ organisation, which opens its annual conference in Birmingham on Monday.
“We have come together, once again, in extraordinary times. Britain is in the midst of stagflation – hit by runaway inflation and negative growth,” Tony Danker said on Monday at the opening of this Confederation conference. from British Industry (CBI).
“We know how to fight inflation. We know how to fight recession. But we don’t really know how to fight them together,” he added.
The UK has entered recession and its gross domestic product is expected to fall by a further 1.4% next year, the OBR, the government budget forecasting body, has predicted. Inflation is at 11%, a record for four decades.
“The only thing holding up growth is the increase in working hours thanks to rising immigration,” Danker told a packed room at the Vox conference center in Birmingham.
Prime Minister Rishi Sunak will attend the conference in Birmingham, central England, on Monday, where he will follow up Mr Danker’s speech.
The CBI chief has identified three priorities for economic growth. The government must, he said, “unlock investment in the private sector”. He must “change the economic rules” to overcome the political obstacles. Companies must “show even more ingenuity”.
He also calls for easing immigration rules. “Let’s get economic migration in the areas where we’re not going to have the workers or the skills at home anytime soon. Instead, let’s make these visas permanent,” he said.
“Remember that GDP is a simple multiplier of two things: people and their productivity. And it’s time to be honest: we don’t have the people we need, nor the productivity,” he said.
Danker also called on Monday to boost the country’s international trade, “the lowest percentage of GDP in the G7”, by signing an agreement around the dispute over the Northern Ireland Protocol to unlock the potential of the Brexit deal with the EU.