Inflation, poverty… Six indicators that show Britain is doing badly – World

  • 1 Inflation weighs on the economy

  • Interest on UK debt reached £7.7bn in September, £2.5bn more than a year earlier and the highest amount paid since these monthly statistics began in 1997.

    Since mid-2021, the government’s debt burden has “increased significantly, not because of the increase in debt” but “mainly because of inflation”, the Office for National Statistics (ONS) commented on Friday in its monthly report. Government-sponsored non-bank government borrowing rose 2.2% year-on-year to £200bn. in September, the highest ever since these statistics began 30 years ago. year, apart from the record during the covid-19 pandemic.

  • 2 Public debt explodes

  • For its part, public debt – excluding public banks – reached £2,450.2 billion at the end of September, representing 98% of GDP and 2.5 percentage points of GDP more than a year earlier. “To stabilize the markets I said clearly that difficult decisions would be taken to protect” the government’s accounts, warned Jeremy Hunt, the Chancellor of the Exchequer. Appointed a week ago, in an emergency, in the face of the debacle in the markets caused by the “mini-budget” of his predecessor in the Treasury, Jeremy Hunt immediately canceled almost all these expensive budgetary measures and unfunded, with devastating effect.

  • 3 Tax increases, tax on profits … taking shape

  • Jérémy Hunt is due to present a medium-term plan on October 31, which should include cuts in public spending and possible tax increases, in total opposition to the campaign promises of volatile Prime Minister Liz Truss, who was forced to resign on Thursday because of the sinking. of his government. The pressure is increasing in particular to impose a tax on the profits of energy companies that is greater than today. And the British press is calling for a possible taxation of the banks, which profit from the flare-up of interest rates.

  • 4 million Britons are pushed into poverty

  • However, Jeremy Hunt’s plan is uncertain as the new chancellor is unsure whether he will remain in office in the next government. Amid a political slowdown, the country is also weathering an economic storm with flat activity, inflation of more than 10% – the highest in the G7 -, an energy crisis and millions of Britons falling into poverty. All of this affects consumption: Retail sales fell 1.4% in September compared to August, and have been falling for several months. The ONS attributed the fall in September not only to the rise in the cost of living, but also to the impact of the national holiday for the funeral of Queen Elizabeth II last month with the closure of many shops. The GfK confidence index also reflects a weak mood among consumers.

  • 5 The pound loses its value

  • After jumping Thursday on the announcement of Liz Truss’ resignation, the British pound fell on Friday, losing 0.33% to $1.1196. Its historically very low level, as well as the decline, conversely, of long-term debt yields in the market on Friday, illustrated investor distrust. The cost of 30-year government debt rose to 4.022%, passing the 4% threshold. By the end of 2021, it was worth just over 1%. The “mini-budget” had pushed it to more than 5%, weakening the assets held by pension funds, and the Bank of England had intervened to prevent a financial crisis.

  • 6 International investors are losing confidence

  • “Political turbulence and the budgetary upheaval have eroded the country’s credibility among international investors,” notes Richard Hunter, analyst at Interactive Investor. The figures released on Friday add to this grim picture and testify to the difficulty of the task for the next government.

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