A recession, food shortages, rising cost of living and failing government healthcare system. The UK government is grappling with multiple crises that have spiralled out of control almost simultaneously. Projections for the British economy are bleak at best. There is no hope of growth although the economic downturn is reportedly over.
The Bank of England has been hiking interest rates to the highest levels seen in several years, and pre-pandemic levels of output may not return until 2026, according to a Bloomberg report.
The rising cost of living has even strained the relationship among couples residing in the United Kingdom, a survey has found. Disagreements over finances have led to disharmony in households, research carried out by credit card brand Aqua has found.
And now, to add to it, Britain is looking at a food crisis, again, with salad staples disappearing from store shelves and a fresh purchase limit being imposed on certain vegetables.
Fresh food crisis
British supermarket chains such as Tesco, Asda, Morrisons, and Aldi have put a cap on how many tomatoes, cucumbers, and peppers a customer can purchase, Reuters reported. While it may sound bizarre to you, it is not very unbecoming of supermarket chains. The entire sector has been affected by disrupted harvests caused by unusual weather.
Spain, which is among the UK’s top fruit and vegetable suppliers, believes bad planning must be responsible for the current problems. Spain's agriculture minister has also blamed Brexit and cold weather for Britain’s “salad crisis.”
Another factor that may have led to the many empty fruit and vegetable shelves in Britain is high energy costs, due to which there was less winter production in greenhouses.
The National Farmers Union (NFU) has cautioned of carrot and leek shortages next, which may be followed by onion too.
Also read: UK vegetable growers demand government action to stem shortage
When it comes to food shortage, London-based change management consultant Tatiana Grano Giraldo may not have felt the pinch yet, but her acquaintances have reportedly not been able to buy tomatoes; they are out of stock everywhere.
However, the many economic woes plaguing England have pushed Giraldo to tighten her purse strings as well. She says: “… I can feel it very much in spite of having a comfortable salary and employment…. wondering how people who are paid by the hour are surviving; so many are turning to food banks because they are unable to afford food anymore.”
Elaborating the situation in the United Kingdom further, she said: “Several industries in the public sector are on strike because they haven’t got a raise in years… this is just dragging households below the poverty line quickly.”
“I think food prices are up by roughly 17 percent, and that’s not even taking into account the energy crises and the fuel poverty across the country,” she added.
Financial Times quoted the NFU president Minette Batters as saying: “UK households face a heightened risk of shortages of carrots and leeks this year as the domestic farming sector struggles to adapt to more extreme weather and higher input costs.”
She added: “Rising energy bills and labour shortages meant there is a real danger of the UK losing its horticulture expertise and becoming ever more reliant on imports of food. That would leave it more vulnerable to supply-chain disruption and increase the likelihood of empty supermarket shelves.”
The NFU has said that onion producers are having to cut down on output volume because of water supply woes; this may worsen with inadequate rainfall in the coming, Express UK reported.
To mitigate the chances of the crises exacerbating further, the NFU has urged the Rishi Sunak government to “provide more support for growers”.
The government, meanwhile, has asked Britons to prepare for another month of shortages of salad staples, including tomatoes, cucumbers and peppers.
Energy crisis
The United Kingdom has also been struggling to bring an energy crisis under control and as a result, raising the risk of missing the net zero emission target. The UK government, which was dealing with political instability during Liz Truss’s brief time in power, missed an October deadline on the way to decarbonising the power sector by 2035, as it was trying to figure out how to save consumers from rising energy bills.
But taxpayers are reportedly facing the brunt of it with “unnecessary costs” to decarbonise being passed on to them due to energy crisis delays. The National Audit Office (NAO) has said that the UK government was “adding to the risk that taxpayers and consumers will face unnecessary costs in the race to decarbonise the UK’s power network by delaying a key planning document”.
UK labour shortage
One of the biggest problems Rishi Sunak’s government needs to address pronto is the immense labour shortage in the economy, starting by rethinking its immigration policy. Experts have noted that the post-Brexit points-based immigration system has led to the current labour and skills shortages.
Also read: New PM Rishi Sunak pledges to lead Britain out of economic crisis
The Bank of England says slowing population growth should also share the blame, which, however, has been driven by less migration from the European Union, making us circle back to UK’s immigration policy.
According to former UK home secretary Priti Patel, the pro-Brexit camp’s new immigration policy was supposed to “encourage employers to invest in the domestic UK workforce, rather than simply relying on labour from abroad.” But, data suggests, this only led to a labour shortage in the country, with the low-skilled sectors suffering the biggest blow.
Last month, reacting to the latest Office for National Statics (ONS) Labour Market figures, Jane Gratton, Head of People Policy at the British Chamber of Commerce, said: “Businesses are crying out for people to fill job vacancies at all skill levels, and this must be the number one focus for the government if it’s serious about economic growth. There are still a huge number of vacancies, currently sitting at 1.134 million, and this is stopping firms in their tracks. It means they are struggling to meet the orders on their books, and it puts any plans for growth far out of reach.”
“It is also ramping up pressure on wages, currently at the highest rates seen in the private sector outside of the pandemic. This has been identified by the Bank of England as a factor in its decisions to raise interest rates to tame inflation.”
The Chartered Institute of Personnel and Development (CIPD), a professional body representing employers, mentioned in its quarterly Labour Market Outlook survey that over half the employers in Britain could raise salaries by 5 percent this year.
Gratton also urged the UK government to reform the “shortage occupation list” as an immediate measure to rectify the situation at hand. “And crucially, Government should reform the Shortage Occupation List to help firms fill urgent job vacancies from outside the UK when they cannot recruit locally. The list should include jobs at all skills levels where there is clear evidence of a national shortage,” she added.
National healthcare in a shambles
The UK’s National Health Services (NHS) has been hit by strikes at a time more and more people are opting for private healthcare remedies due to unprecedented wait times at government-run facilities. Both ambulance staff and nurses have been going on strikes over issues of pay and working conditions.
The UK’s elderly care system is struggling the most currently as it deals with massive staff shortages.
According to government data, by December 2022, as many as 401,537 people were waiting for over a year to seek hospital treatment in England. As of September 2022, there were close to 150,000 staff vacancies in the NHS.
To paint a clearer picture of the scenario, CNN quoted an NHS worker in Liverpool as saying: “Hospitals are running well over capacity. Many patients don’t get treated in wards, but in the back of ambulances or in corridors, waiting rooms and cupboards – or not at all. It’s like a war zone.”
Real estate woes
On top of all these problems, housing prices have fallen sharply in the UK. According to a CNBC report, in February there was a 0.5 percent month-on-month fall, with prices going 3.7 percent lower than the peak in August 2022. It is believed that higher mortgage rates and the rising cost of living has been dissuading homebuyers.
But, Pallavi Basak, a former NHS worker, who has been house-hunting for three months now, says getting an apartment is almost like entering an auction – the highest bidder would get the flat, literally.
Not only have rents doubled, most flats that are available in England currently are entirely unfurnished, with months-long queues to get hold of furniture on rent as well. “This has strained our Budget”, says Basak, who had plans to travel with her husband this month.
The 31-year-old, who is currently job hunting as well, says: “We have been living like tourists at an Air BNB for months. My world is restricted to a few suitcases now. We are still uncertain about when we might get a permanent residential address; until then, cannot even dream of travelling outside this country.”
Building society Nationwide’s Chief Economist Robert Gardner said: “The recent run of weak house price data began with the financial market turbulence in response to the mini-Budget at the end of September last year.”
The lingering damage of former UK PM Liz Truss’s “mini-budget” sent mortgage rates soaring and forced households to tighten their purse strings.
“February’s fall likely reflects the lingering damage to confidence and squeeze on household incomes, with inflation continuing to outpace wage growth and mortgage rates remaining substantially higher than their 2021 lows,” Gardner said.
Not surprisingly, as the real estate sector suffers, England’s homelessness is peaking too. According to a report by local daily City AM, the rise in homelessness can be attributed partially to the cost-of-living crisis due to which many people have not been able to pay rents.
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