But his popularity outside parliament could lead to a surge in inflation and stagnation in the UK economy, which could put millions of people in poverty. I'm terribly depressed by the crisis of living expenses. Risk of damaging winter and trade wars with the European Union.
UK stocks rose, sterling rose 0.75% to trade at $ 1.20 following reports of Johnson preparing to fall, just below its two-year low earlier this week. I recovered to.
"But undoubtedly, the [pound] remains terribly weak due to the dire state of the UK economy, which is below its peers, and [and] to deal with rising inflation by the Bank of England. Will actively raise interest rates. "
The UK boasts the highest inflation rate in the G7.
All major economies are suffering from the protracted impact of the pandemic on the supply chain and the shock of energy and food costs from Russia's invasion of Ukraine in February.
The Johnson administration has promised a £ 400 ($ 502) subsidy per family to help millions of people struggling to pay for energy. He also succumbed to pressure last month and announced a £ 5 billion ($ 6.3 billion) tax on the plunge profits of oil and gas companies.
But those efforts have been swallowed. According to the Bank of England, disposable income has been on track for the second-largest decline since the record began in 1964, driven by soaring energy and food prices. And those bills are getting worse.
Average annual household energy prices could increase by about 50% to £ 3,000 ($ 3,600) this winter when the maximum price limit that suppliers can charge customers is revised in the fall. There is sex. Regulators have already raised the cap by 54% in April.
UK households are particularly exposed to a sustained decline in living standards. The Resolution Foundation said on Monday that typical wages are not higher today than they were before the 2008 financial crisis.
"The recent poor record of living standards in the UK, especially the complete collapse of income growth in poor households over the last two decades, needs to improve within the next decade," said the Foundation's chief economist. Adam Collet says. ..
And we are heading for the lowest growth.
Without strong growth, the wage slump will not reverse. And that's unlikely right away. Around the world, the once strong recovery has been reduced. However, the UK is in a particularly bad situation, especially in the looming recession.
The world's fifth-largest economy stopped in February and began to shrink in March. According to the National Bureau of Statistics, the decline accelerated in April, when GDP is estimated to have declined by 0.3%, and all three major sectors of the economy (services, manufacturing and construction) have receded. May retail sales fell for the second straight month.
There is even worse news. In a report on financial stability released earlier this week, the Bank of England said the outlook for the UK economy had "significantly deteriorated."
Last month, the Paris-based Organization for Economic Co-operation and Development predicted that the UK economy was heading for stagnation and GDP growth in 2023 would be zero. This will be the worst performance of the G7 next year. ..
While Brexit wasn't delivered,
The UK has missed much of the recovery in world trade since the pandemic, the government's own fiscal oversight agency, the Budget Responsibility Department, ended in March.
"Additional trade with other counties may offset some of the decline in trade with the EU, but any agreements signed so far are in our expectations. It's not big enough to have a significant impact, "OBR said. ..
According to official data released last week, the UK's balance of payments deficit surged to 8.3% of GDP in the first quarter of 2022. In short, the UK needs to rely more on foreign investment than ever to make up for this fact. The country imports far more than it exports.
"Judging from the initial lineup of potential successors to Johnson, the balance of potential outcomes will lean towards a less tense relationship with the EU," said Berenberg's Karm Pickering.
"Even enthusiastic Brexiteer candidates have less populist diversity than Johnson, although it is unclear if the relationship between the UK and the EU will improve slightly or significantly. , Suggesting that the overall situation is considerable. Calm down. "