Britain is currently facing a number of challenges. #Supply chain problems caused by a shortage of trucks, along with rising inflation, rising fuel prices, fuel shortages in London and the southeast of England, as well as rising taxes, have left millions of British citizens dissatisfied. The British economy, which has been struggling to lift Covid-19 quarantines, now faces a range of problems, from disruptions in supply chains to rising inflation and the risk of rising unemployment. These problems have made it difficult for British policymakers to steer the economy.
Food shortages and empty shelves have so far reduced sales of 2 billion to four major chain stores in the UK. Also, the inventory in these four chain stores had doubled before the coronation began. Providing for the citizens’ daily necessities has become one of Britain’s challenges in the weeks leading up to Christmas, but Boris Johnson insists it is not the government’s job to step in and solve any problems.
The latest report from Kantar Consulting shows that food price inflation in the UK reached its highest level in 14 months in October due to supply chain problems. Over the past four weeks, food price inflation in the UK had reached 2.1 per cent, the highest rate since August 2020, when retailers were forced to cut advertising to keep goods on the shelf. Analysts at Kantar say the fastest price increases are currently being seen in commodities such as tasty snacks, canned drinks and chips. Meanwhile, the prices of fresh meat, vegetables and pet food are falling.
The wondering households
As prices rise along with supply chain disruptions and a shortage of truck drivers in the country, the British people tend to go to several supermarkets to find the best price. At present, British households visit an average of 3.3 supermarkets a month to find the lowest prices, according to researchers. They also note that the country’s grocery sales fell 1.9 per cent from August to October compared to the previous year. However, sales were 7.3% higher than before the 2019 epidemic. According to the report, British households visited supermarkets an average of 15.7 times last month. This is a slight increase from the 15.3 times we saw in the same period in 2020, but consumers still receive 40 million fewer visits per month than in 2019. Andy Haldane, the chief economist at the Bank of England, believes that the country is in a period of volatile inflation and low development.
Coinciding with the widespread outbreak of the Coronavirus in Europe and the UK, which led to a cessation of much economic activity, the UK annual inflation rate rose to 4.2% by the end of October, up 0.8% from the same period last month. This inflation rate, which is one of the highest inflation rates in the UK in the last ten years, has been most affected by the increase in inflation rate in the gasoline sector, which has risen to a positive 69.1 % this month. Inflation in the electricity and gas sector has also reached 18.8 %. Home appliance inflation is also measured at 6.8 %.
Inflation targeting failure
The Bank of England has set a target of 2% inflation, and it will be difficult for policymakers to keep inflation in that range. The core of inflation, which does not take into account changes in food and energy prices due to high fluctuations, has reached 2.8 %, with an increase of 0.4 % compared to the previous month. Monthly inflation in the UK also increased by 0.7 % compared to the previous month to 1.6 %.
The average British inflation rate in the period 1989 to 2021 was equal to 2.49 %, with the highest inflation recorded in April 2015 at 8.5 per cent and the lowest inflation in April 2015 at minus 0.1 %. “Inflation is not a big concern for the central bank at the moment, and on the contrary, there is still a lot of room for manoeuvre given the distance between the inflation rate and the target level, it does not seem to be several months,” said Neil Birrell, chief investment officer at the Premier Miton.
Slowing economic growth
While the British economy has grown rapidly since the reopening of the Covid-19 quarantines, the latest figures show that economic growth has slowed sharply. Official statistics show that British economic growth slowed sharply in July, and the same trend continued in the second half of this year.
Manufacturers have faced delays in supplying raw materials, and this has happened before people rush to the gas stations and rush to buy them, which could also be due to a shortage of truck drivers. Labour shortages, seen in other economies around the world, have worsened since Britain decided to withdraw from the EU and end free movement. Despite all this, Boris Johnson denied the crisis in the country, saying that Britain has an inherent ability to solve logistical problems and the supply chain in this country is very strong.
Disruption of the supply chain and rising inflation in the UK have lowered the consumer confidence index in the country. British families have also faced declining government benefits and tax increases. Data from the Bank of England showed that consumers in this country have once again turned to saving rather than spending.
Employment and wages
Unemployment in the UK has been falling over the past week as a result of improved economies and government support programs. But the bailout ended at the end of September, and now the Bank of England is worried about rising unemployment again. Wages have also risen in Britain, but After Covid-19 Pandemic rising inflation has affected people’s incomes.
According to a new survey conducted in the UK, about one-sixth of adults in the country have not been able to buy their essential food for the past two weeks due to the cost of living crisis and fuel shortages in the country. Following the publication of the survey, British stores saw an influx of people to buy their essentials, including toilet paper. In a study by the National Statistics Center, 17% of British adults said the essential food they wanted was not available, while a quarter of adults said they had a similar problem with non-essential food. But shortages in the UK are not limited to food and drink, with 13% of Britons saying they spent more time finding prescriptions and 4% saying they had to go to more pharmacies to find their own medicines. Supermarkets are not the only place where there is a shortage.
Marcus Rashford, Manchester United Striker, also said he had seen a shortage of food. A Grocer magazine survey of 1,000 people found that two-thirds of British citizens were worried about the prospect of a shortage of food and drink at Christmas, and experts asked families to pre-purchase their Christmas necessities store in the freezer. Concerns are growing that stores will be empty on New Year’s Eve.
For several months now, British companies have been shut down or disrupted due to problems in obtaining the goods they need, and this situation could negatively affect the process of economic recovery in the UK. Although the problem is not unique to Britain, and the Covid-19 pandemic has disrupted supply chains around the world, the situation in Britain has been exacerbated by the effects of Brexit. Brexit has complicated the entry of European workers into the British market. “I want people to know that we are doing everything we can to reduce some of these challenges and where we can make a difference,” said Chancellor Rishi Sunak