Ominous predictions for the UK economy from the Resolution Foundation

London: Thanasis Gavos

The latest predictions of the Resolution Foundation think tank for the course of the British economy are ominous.

According to the analysts of the prestigious organization of social and economic studies, the British government is asked to cover a fiscal black hole in the region of £40 billion, a result in part of the ‘mini budget’ of Liz Truss’s brief administration.

This implies tax increases and reduction of government spendingat a time when citizens are affected by the cost of living crisis.

At the same time, in a report entitled “A Nation of Stagnation”, the Resolution Foundation points out that the main root of the country’s economic problems is the constantly decreasing productivity.

Also noted is the significant fall in wages in real terms since 2010, the fact that social inequality based on income is greater in the UK than any other major European country (with 2018 data), that households with the lowest incomes in the country are 22% poorer compared to their counterparts in France and that the average income in the richest municipalities in the country is now four times higher than the corresponding one in the poorest municipalities.

The think tank also estimates that the independent Office for Budget Responsibility’s (OBR) forecasts to be presented in the middle of the month will reduce estimates for UK GDP growth by almost 4% by the end of 2024.

It is also estimated that the OBR’s forecast for unemployment it will mean another half a million citizens out of the labor market, increasing the percentage to a greater height than during the pandemic.

Meanwhile, according to the related index of the Institute of Directors, business confidence in Britain fell to -60 last month. A total of 73% of executives surveyed expressed frustration, with 49% citing “political instability” as the reason.

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