Another crisis: Britain is heading towards recession, 2.5 lakh families on the verge of becoming impoverished
Britain is paying a very expensive price for imposing sanctions against Russia. The economy of the country is on the verge of stagflation. It is estimated that 2.5 lakh more families will become victims of poverty this year. In this way the number of poor families in the country will reach 12 lakhs. The National Institute for Economic and Social Research (NIESR), Britain's oldest independent research institute, has demanded that the government immediately announce a relief package to help families on the verge of poverty.
It was the NIESR this week that predicted the British economy was going to suffer stagflation. Stagflation is a state when the rate of inflation remains higher than the GDP growth rate for two quarters. According to reports published in the British media, Britain's central bank, the Bank of England, is also concerned about such fears. Rather, officials associated with the bank have also expressed fears that Britain may be a victim of recession in the coming months.
Big challenge to get out of stagflation
Analysts have said that once an economy is caught in stagflation, it becomes a big challenge for an economy to come out of it. Meanwhile, in Britain, the bad effect of inflation, especially the cost of fuel on common life, is clearly visible. The NIESR has said that since the Brexit referendum in 2016, governments started reducing spending on welfare schemes. This worsened the condition of the poor sections. Now the increased inflation due to Ukraine war has made his life more difficult.
This institution has predicted that the inflation rate this year will be an average of 7.8 percent. It may go up to 8.5 per cent in the next winter. While the Bank of England has warned the inflation rate to go up to 10 percent. It is expected that there will be relief from inflation next year. But in the meantime, if the government does not help the poor families, then their condition will keep getting worse.
The economy will hit a slowdown in the second half of 2022, the
NIESR has said, adding that the government's announcement of a five-pound fuel subsidy is helping only those in better condition. It has not helped much in the use of domestic fuel. The organization has said in its report that the British economy will be in recession in the second half of 2022 due to low economic growth and rising unemployment. NIESR chief Jagjit Chadha said that government policies are solely responsible for this condition.
According to the newspaper The Guardian, the deputy director of this institution, Professor Adrian Pabst, said, 'Due to inflation, the cost of paying people's bills will increase. This will reduce the demand in the market. This will result in increasing income inequality. The budget of low-income households will be hit the hardest due to inflation. Due to this, 2.5 lakh families will become victims of poverty by being burdened with debt. To help these families, the government should announce a direct assistance of £25 every week