Britain faces a tough winter after Brexit

An empty shelf that normally stocks bottled water on the Greenwich Peninsula, a Sainsbury supermarket in London, England, September 19, 2021.

Chris J Ratcliffe | Getty Images

Experts have escaped from the Covid-19 pandemic, noting that Britain is facing an onslaught of a new economic crisis in an “unstable position.”

A perfect storm of labor shortages, soaring natural gas prices and global supply chain constraints have left the country Severe winter.. As demand rises as the economy resumes, similar problems will arise around the world, but economists claim that Brexit has exacerbated these problems.

Labor shortage

Worker shortages are affecting many industries across the country.

It is estimated that there is a shortage of 100,000 truck drivers in the UK, and the transportation organization is mainly due to the outflow of EU citizens after Brexit. Due to a shortage of truck drivers, delivery was interrupted, store shelves were emptied, backlogs of ports and dry gas stations occurred, Hoarding frenzy In September, which lasted for several weeks.

Other sectors have also warned that labor shortages, which are expected to undermine the availability and prices of goods for Christmas, will worsen.

The British National Pig Association warns: Up to 120,000 pigs face to be culled Within a few weeks due to a shortage of butcher and slaughterhouse workers.

In a statement on Friday, the Vice Chairman of the National Farmers’ Union of Britain said labor shortages throughout the food supply chain remained serious, and the CEO of the British Warehouse Association said in September that industries such as warehousing, engineering and transportation Said that they were all in a serious situation. Worker shortage.

At the end of September, the Confederation of British Industry, which represents 190,000 companies, said 70% of companies plan to raise their salaries to address labor shortages, according to the latest data.

The British government has issued thousands of temporary visas to truck drivers, butchers and farmers, but some critics argue that this is not enough to seduce foreign workers. I am.

Risk to future growth

Riccardo Crechenge, a professor of economic geography at the London School of Economics, was skeptical about the solutions the government is offering.

“Three months offer [visas] It may not work while other parts of the EU are booming due to the injection of resources allowed for recovery plans, “he told CNBC over the phone. Where do the drivers come from in the domestic economy? “

Crescenzi said it’s hard to tell if the problem is temporary. “Some of these shortfalls can be structural, a problem that can seriously constrain future growth.”

Sam Roscoe, senior associate professor of operations and supply chain management at the University of Sussex, warned that the UK will continue to run short unless there are fundamental changes to the UK immigration system.

“Brexit was sold as a vote to ensure immigrant independence, the UK labor market, and everyone in the UK has a job to go to, but the problem is that we are 5% unemployed. To have a rate, “he said on the phone. “We have lost access to the 27 member states and the workforce that was once available there, especially the so-called low-skilled workers. I think that will definitely put us in an unstable position.”

Roscoe said it would take years to get enough British training and licenses to drive heavy-duty vehicles. “For the time being, the reality is that there will be a labor shortage unless the visa rules change.”

Purchasing power is threatened

Credit Suisse economists warned in a note Thursday that UK consumers “will face headwinds in the coming months,” including rising inflation, supply shortages and monetary tightening.

“We believe that the real disposable income of UK consumers could decline by about 1.5% in 2022, the largest decline since 2011,” the author of the memo predicted.

Helen Dickinson, Head of the UK Retail Consortium, Told ITV News On Thursday, three out of five CEOs said they had to raise prices by the end of the year due to supply chain problems. About 10% said they have already done so.

Charalambos Pissouros, head of research at the JFD Group, said buying up and supply shortages in the UK could also affect purchasing power by compromising the value of Sterling.

“We see the risks surrounding the future of the British pound on a downward trend,” he told CNBC. “How serious a further fall is depends on how long the situation remains unresolved. British Army involvement It will allow economic performance to recover faster than expected and stop Sterling’s decline, giving the Bank of England the freedom to proceed with its tightening plans. “

Government response to crisis “alert”

The UK is also facing an energy crisis. Some UK energy suppliers have collapsed since September as wholesale gas prices have risen to record highs. This issue is affecting markets around the world, but the UK is particularly vulnerable because it relies on gas. Over 22 million households are connected to the British Gas Grid.

Britain faces a tough winter after Brexit

Source link Britain faces a tough winter after Brexit

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