By Le Figaro and the agency AFP
Posted 4 hours ago, updated 3 hours ago
Demonstrations in London on Saturday brought together several thousand angry people. Niklas HALLE’N / AFP
FOCUS – The newly installed British government is already facing strikes, worried markets and criticism from financial institutions such as the IMF.
Having occupied 10 Downing Street for just three weeks, British Prime Minister Liz Truss is already under fire from critics. Even the International Monetary Fund has issued its warning. It must be said that the country’s economic and social situation is increasingly worrying.
10%
Consumer prices in the UK have risen by 10% in a year. This inflation rate, which is the highest among the G7 countries, has not been observed by the National Statistics Office for forty years. More specifically, the UK inflation rate reached 10.1% in July and fell very slightly to 9.9% in August. And the pace isn’t slowing down. “Inflation could peak at 10.5% in October,” said KPMG economist Yael Selfin. Food and energy prices are driving this inflation rate higher.
Between £100 billion and £200 billion
The emergency plan announced by the British government is expected to cost the state between 100 and 200 billion pounds, according to economists. As well as historic tax cuts, Liz Truss’ government has also decided to freeze Britons’ electricity and gas bills for two years and absorb half of the country’s corporate energy bills for six months. The British finance minister defended that this budget, which experts and the International Monetary Fund in particular regard as extremely expensive, was justified by “the worst energy crisis in generations”.
5 billion pounds a day
The Bank of England is setting a dizzying pace through October 14. Daily £5bn of UK government bond buybacks in the markets to reassure creditors who have pushed up government lending rates following the announcement of the government’s action plan to tackle coronavirus crisis inflation. The UK 10-year benchmark interest rate crossed 4.5% during the session, a critical level. Meanwhile, the British pound fell to an all-time low. A total of £65 billion will be spent by the central bank in this way. Paradoxically, this monetary policy, which consists in buying government bonds on the markets, has the effect of feeding inflation.
one in four
In the UK, one in four households has an adjustable rate loan to fund a housing project. Unlike in France, all debtors have to renegotiate their borrowing rates with their bank every two to five years. A situation that worries economists across the Channel. “The mortgage crisis will be bigger than the energy crisis,” predicts Richard Murphy, professor of accounting at the University of Sheffield. In fact, the UK central bank’s hike in interest rates, a key measure to combat inflation, will automatically lead to a rise in mortgage rates, some of which are already exceeding 5%.
89% of the trains don’t run
Thousands of Britons gathered in London this Saturday to protest runaway inflation that is eroding their budgets. “Support strikes”, “Freeze prices, not people” or even “Taxes for the rich” read the signs waved by demonstrators, who had gathered at the call of several organizations. The mini-budget presented by the government last week was coldly welcomed by the majority of Brits, despite its size. As a result of the mobilization, British railways were almost at a standstill on Saturday with just 11% of trains in circulation. Beyond the rail sector, dockers, postal workers, criminal defense lawyers and even garbage collectors have multiplied strike movements in recent months to demand wage increases amid the cost of living crisis. Social discontent will not abate, new strike calls for next week have already been published.
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