THE Bank of England is forecasting the weakest growth of real post-tax labour incomes in more than 70 years, with a fall of 2 per cent this year and a further half a per cent in 2023.
This depressing outlook captures the challenges generated by sharply higher import prices and the risks of more generalised inflation. Among leading high-income economies, the UK seems to be particularly hard hit. Inflationary risks seem similar to those in the US. But the UK is also a large net importer of energy, especially gas, as prices have exploded upwards. The government might have hoped that the fading of the pandemic's clouds would leave a sunlit economy. But, as is their wont, events got in the way. The...
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