Britain faces the risk of an economic setback worse than the crisis of 2008

Economic experts in the United Kingdom, are saying that, the UK will face a crisis similar to the crisis of 2008, but the difference is that the crisis of 2008 occurred after the economy was achieving 63 quarters of growth, while the new crisis comes after 14 years of stagnant wages and meager growth.

According to reports, the British economy is expected to be no more growing in 2025 than it was in 2020.

The Bank of England warned, last week, that Britain is heading for a long recession that will start from the fourth quarter of this year and continue throughout the next year, which is considered the longest recession in the country since the global crisis.

Despite recession fears, the Bank of England raised the interest rate by half a percentage point last Thursday, the highest increase since 1995, in order to curb soaring inflation.

According to British media, this matter complicates the task of the next prime minister, in the midst of the Conservative Party’s campaign to choose a successor to Boris Johnson, which is dominated by the acute living crisis that the British are going through.

And, as a result of the energy crisis resulting from high prices and lack of supplies, amid the Russian military operations in Ukraine, the ceiling for electricity bills for consumers is expected to rise 75%, in October, which may push millions of families to the edge of poverty.

This was also mentioned by an analysis at Bloomberg agency, on Tuesday, which stated that the British economy is still heading towards a recession, according to the expectations of the Bank of England, even if Liz Trus becomes prime minister and decides to implement her agenda in terms of significant tax cuts.

Bloomberg’s report indicated that the proposed tax cuts, estimated at 39 billion pounds, may reduce the severity of a possible economic recession, but the British economy will remain less than it is now, despite the statements of the British Prime Minister candidate that the economic recession is not inevitable.

At the same time, Andrew Bailey, Governor of the Bank of England, made statements that included stressing that the Bank of England has a very clear mandate on price stability, that the repercussions of Russian actions in Ukraine have a dangerous economic impact, that inflationary pressures in the near term are increasing significantly, and that the state of uncertainty Which surrounds expectations are exceptionally high and that the British economy may suffer a recession soon.

The International Monetary Fund warned last month that the United Kingdom was preparing for the slowest growth of the Group of Seven richest economies in 2023.