Britain in a ‘very, very difficult economic situation’ – Truss

LONDON, May.18, (ST)-Britain is facing a “very, very difficult economic situation”, British Foreign Secretary Liz Truss said on Wednesday, after inflation hit an annual rate of 9.0% in April, the highest since official estimates began in the late 1980s.

“We are in a very, very difficult economic situation,” Truss told Sky News. “We’re facing some very, very serious global headwinds. And as you said, inflation is extremely high.”

She also said that the situation in Northern Ireland was of grave concern, adding that the current trade arrangements weren’t working and changes were needed.

“The situation in Northern Ireland is of grave concern. The Belfast Good Friday Agreement was a huge step change for Northern Ireland in a positive direction. We’re now seeing that undermined by the fact that the Northern Ireland protocol isn’t working,” she said, according to Reuters.

In the same context, The Week magazine quoted the Independent Paper as saying that The UK is set to experience a “toxic combination” of price drivers, , namely “an extremely tight jobs market, a plunging pound and higher inflation expectations”. And additional taxes on households being imposed by the government are also likely to exacerbate financial pain for many, “something few governments are daring to do at a time of soaring living costs”, added the paper.

Inflation is soaring and currently stands at about 7%, although the Bank of England (BoE) predicts it could reach as high as 10% this year due to rising energy prices. It’s a figure far from the Bank’s 2% target, a “key part” of its “price stability” mandate, said The Independent. 

The BoE’s governor Andrew Bailey has said that the UK is in a “bad situation” with inflation, and has warned that a “very big income shock” could be about to hit British households. He added that due to the ongoing Russian invasion of Ukraine, there could also be an “apocalyptic” rise in global food prices.

Compiled by: Basma Qaddour