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The British are facing a sharp decline in their purchasing power

The British are facing a sharp decline in their purchasing power

Boris Johnson, who has been clinging on to the post of British Prime Minister in every way, reiterates this in praise of his achievement: the United Kingdom is experiencing strong growth in the G7 countries. Official figures released on Friday, February 11, prove he is right for 2021: British gross domestic product (GDP) will increase by 7.5% in 2021. France (7%), the United States (5.7%) and, above all, Germany (2.8%).

However, this view is myopic. Last year’s strong British recovery came in 2020 after a sharp decline of .49.4% over other places. Overall, two years after the Govt-19 epidemic, the U.K. “In the middle of the pack” According to Darren Morgan, an economist at the British Office for Statistics, the G7 countries. The UK GDP, which had returned to pre-epidemic levels in November 2021, fell again in December due to the Omicron variation. At the end of 2021, it was below its level (.40.4%) at the end of 2019.

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In comparison, the United States is 3% higher than the pre-epidemic level, while France, 1%, and Italy are at the same point as the United Kingdom. It lags behind Germany (1.5% below pre-epidemic level) and, G7, 4% below Spain. “In the end, there is no difference between the United Kingdom, France or Germany.” David Owen, founder of Saltmarsh Economics, a consulting firm, points out that figures from the Govt-19 period are particularly volatile. According to him, of these group of countries, only Spain, which relies on tourism, actually departed.

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“London is worse than the rest of the country”

“Brightly, the British economy has fought the epidemic relatively well, using the same weapons as elsewhere: partial unemployment, government-guaranteed loans, multiple social assistance. The exception may be the British capital. London is worse than the rest of the country.”, Mr. Owen continues. The city center is emptied by telework, which is more widely practiced than in other parts of Europe.

Of concern, however, is that England ate its white bread. In the coming months the British will face a violent reduction in their purchasing power. In December 2021, inflation was 5.4%, slightly higher than the euro zone (5%, over the same period). But this is just the beginning: according to the Bank of England, inflation should not exceed 7% by April.

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