‘New winter of discontent could be hard to avoid’: economic expert Q&A on the crises facing Britain
‘New winter of discontent could be hard to avoid’: economic expert Q&A on the crises facing Britain.
Everyone over the age of 50 remembers the year in which rubbish piled up in the streets and graves were left undug. With Boney M and Gloria Gaynor dominating the airwaves and Superman as the big Christmas movie, there was no one to save Jim Callaghan’s ailing government from imminent collapse in 1978-79. Those famous Conservative election posters that would soon say that Labour Isn’t Working summed it up with devastating simplicity.
Eighteen months into the COVID pandemic, another very difficult winter looks increasingly likely with fears about a resurgence of the virus combined with rising inflation and an energy and supply chain crisis. So what can we expect, and how meaningful are the parallels with the 1970s? Finance and economy specialist Steve Schifferes explains.
What are the main threats this winter and how do you see them playing out?
The first is the pandemic itself. We still have a high volume of cases. We don’t have as many deaths or hospitalisations as in previous waves, but the onset of winter, coupled with the more infectious nature of the delta variant, and the fact that many people are still unvaccinated, might mean more restrictions. When Boris Johnson recently announced a “plan B” with more restrictions, nothing was ruled out and masks and remote working were mentioned as possibilities. This potentially means more economic disruption.
A number of other economic problems have emerged during the recovery. Because the recovery has been faster than expected across the world, commodity producers have struggled to keep up, driving up global commodity prices.
The biggest problem is oil and gas prices, with UK wholesale gas prices having almost tripled since the beginning of 2021. Gas is still one of the main components of the energy mix in the UK, so consumer prices for gas and electricity have risen sharply, while lots of businesses are being affected – for example, steel and fertiliser plants have been temporarily closing.
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