Thursday, 16 May, 2024
By: Yash Gupte
The death of the longest ruling monarch of UK comes at a time when the United Kingdom is battling with an economic crisis. Field experts and analysts have predicted that the UK’s economy will be going into a recession in the fourth quarter at the end of this year
The demise of Queen Elizabeth II has put the whole United Kingdom in a state of sorrow. The 96 year old, who was the longest ruling Monarch of the United Kingdom died on 8th September 2022 in Balmoral castle, Scotland, UK. Soon after her death, it was announced that Prince Charles III will ascend the throne and hold the Union Jack high. On September 10, the Garter King of Arms formally crowned Charles III as King of the United Kingdom of Great Britain and Northern Ireland. Later, the queen’s body was brought to the Westminster Hall where the Lying in State began and people queued up for more than 24 hours to pay their last respects to her majesty.
September 17 marked the arrival of dignitaries from all around the world and the commonwealth nations for the funeral. The coffin of Elizabeth and her husband Prince Philip, who died last year aged 99, were buried together in the same chapel where her parents and sister, Princess Margaret, also rest. Indian President Droupadi Murmu, Pakistan’s PM Shehbaz Sharif, Canadian PM Justin Trudeau, French President Emmanuel Macron, POTUS Joe Biden were among the attendees.
The death of the longest ruling monarch of UK comes at a time when the United Kingdom is battling with an economic crisis. Field experts and analysts have predicted that the UK’s economy will be going into a recession in the fourth quarter at the end of this year. Factors like low GDP growth, high inflation, high energy bills, and increase in cost of living in London have made the situation worse. The prices of petrol and diesel, food, used cars, raw materials and household goods have gone up and this has resulted in the increase in inflation in the country. Also, there has been a increase in the prices of goods and services in the hospitality sector which includes restaurants and hotels. The reason behind the rapid increase in the food prices can be attributed to the Russia-Ukraine war. UK has been battling inflation for a long time now. The chart below shows the inflation rate in UK from August 2021 to August 2022.
Source: Office for National Statistics
The inflation in UK has been increasing at an alarming rate. The inflation rate in UK was at 3.2% in August 2021 which increased to 5.4% at the end of the year in December 2021. Within just four months from December, the inflation increased to 9% in June. The reason behind this was the Russia-Ukraine war which resulted in high food prices and supply chains disruption in Europe. The global oil prices were also high during the months of March and April 2022. This all contributed to the rising inflation in UK. The highest inflation rate was recorded in the July 2022 when it reached 10.1%. Apart from the inflation in food products and raw materials, the transport sector also witnessed high inflation as the annual inflation rate for transport was 12.4% in August 2022 from minus 1.6% in May 2022. The petrol and diesel costs 175.2 and 186.6 pence per litre in August 2022 compared to 134.6 and 137.0 pence per litre in August 2021.
Source: Office for National Statistics
UK’s GDP growth rate has been poor for a long period of time. The highest growth in UK’s GDP from August 2021-2022 was recorded in September 2021 and November 2021 at 0.8%. December 2021 witnessed a negative growth in GDP at -0.2%. The greatest decline in UK’s GDP growth was noticed in the month of June 2022 at -0.6%.
The times are really turbulent for the United Kingdom with the economic indicators performing unsatisfactorily. With the disruption in supply chains, it does not seem that the country will move out of the economic slump.
