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The ‘political vacuum’ in the UK threatens to ‘deepen’ the financial crisis

The ‘political vacuum’ in the UK threatens to ‘deepen’ the financial crisis

British Prime Minister Boris Johnson was once again heavily criticized on Monday, as the “political vacuum” that has been created at the heart of his government threatens to lead the country into an even deeper economic crisis before his successor takes office. in September.

Britain is preparing for a long recession, the Bank of England recently warned, as energy prices soar to unprecedented levels, pushing millions of people to the brink of financial hardship.

And the political response required by the current challenge has been overshadowed by the battle for Britain’s new prime minister, which will last until September 5, with Tory leadership candidates Liz Truss and Rishi Altar crossing swords. recently mainly in terms of how much they will cut taxes and when.

Gordon Brown, Labor prime minister during the 2008 financial crisis, warned that the country was facing an “economic time bomb” if it did not put a plan in place now for the difficult winter ahead.

“This week is critical,” Brown told LBC Radio, saying the government should work with the two leadership candidates before energy bills rise by 70% in October.

Nicola Sturgeon, Scotland’s first minister, told Johnson in a letter that the “paralysis” had to end now.

Meanwhile the Confederation of British Industry said the new government would need a plan before taking over. “We simply cannot afford a summer of government inaction while the leadership race drags on,” said Director General Tony Danker.

The size of the economic blow Britain is facing was determined last Thursday by the Bank of England, after its decision to raise interest rates by 0.50% in an effort to tackle inflation that is on track to peak above 13%. although he warned of a long recession.

With energy prices expected to remain high, the central bank said Britain was facing its biggest fall in living standards since record-keeping began in the 1960s.

Johnson’s government, with Altar at the Treasury, set out a £15bn support package in May, but wholesale energy prices have continued to rise since then.

But Johnson’s spokesman said on Monday it was up to the next British leader to decide whether further support was needed.

The opposition Labor Party criticized Johnson and his new finance minister, Nadeem Zahawi, for going on holiday as the economy worsens, calling the government a “zombie” that has already “checked out”.

Source: Capital