Unusual inflation

In normal circumstances, inflation is further driven upwards by increased pay demands.

And although there have been some larger pay increases, most have been much lower than the rate of inflation, meaning a year on year reduction in the standard of living of even those who get a pay rise.

But not at the moment here in the UK. There are outside inflationary pressures; the war in Ukraine and Russia reduction in the flow of gas certainly adds some to this, and we can see inflation all over Europe of similar levels.

Energy price rises increases inflation, of even goods that are produced in the UK, as energy is priced in US$, meaning that as the £ lost value against the $, all energy became more expensive. Including internal and external supply chains.

The pandemic has caused many EU and non-EU workers to return home, many not to return, so the vacancies they would have filled remain open. This means that those wages are unpaid, but also taxes are unpaid, flats and houses unrented and council taxes not paid either. It is estimated there are 1.8million open job vacancies in the UK currently.

There are those who cannot work; the sick, disabled, single parents the elderly, so there is pretty much 100% employment in the UK right now. Especially as on top of that there are hundreds of thousands of people suffering the effects of long COVID, these once active members of society can no longer work, so need support.

From a shrinking workforce.

The simple answer would be to import labour from the EU, but the dogma of Brexit makes that impossible for the PM and HOme Secretary to remain in post with the support of their backbenchers. Immigration from elsewhere is equally repulsed by the ERG and hardline Brexiteers, so the huge amount of economic inactivity carries on apace.

THe Government with falling tax revenues either has to cut spending or increase taxation. Or both.

But actual growth caused by increased productivity is hampered greatly by the scarcity of labour and the barriers the UK placed in its trade with the EU.

Growth can be brought swiftly, but removing the barriers to trade and the movement of labour.

So with a lack of labour bringing economic activity, and hopes of growth in the UK economy will remain just a dream.

There is little point in talking about Brexit much as little has changed, though there is talk of a thaw in relations, but we have heard that before.

The UK stands at the start of a two year recession, the only G8 economy to be doing so.

What could be unique to UK....

There's a Brexit-shaped elephant in the room. Or Parliament.