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Post-Brexit Britain faces a difficult winter


Sainsbury’s Greenwich Peninsular supermarket in London had empty shelves on September 19, 2021.

Chris J Ratcliffe | Getty Images

Experts warn that the U.K. is now facing a series of economic crises after the Covid-19 pandemic.

The country is in a unique position because of the combination of high natural gas prices, labor shortages and tight supply chains. a difficult winter. Similar problems have been created by rising demand when economies reopen. However, economists claim that Brexit has made these problems worse for Britain.

Deficiencies in labor

A variety of industries are being affected by a shortage of workers.

Britain is facing a shortage of truck drivers. This haulage companies have mostly attributed to the exodus of EU citizens. This has caused a disruption in delivery, which led to empty stores shelves, backlogs of ports, and dry gas stations. panic buying frenzyThis lasted several weeks in September.

Another sector has also raised concerns about deepening labor shortages, which could lead to a drop in availability and cost of goods leading up to Christmas.

Britain’s National Pig Association warned of the danger. up to 120,000 pigs face being culledA shortage of abattoir and butcher workers led to a shortening of the time frame.

The vice-president of the U.K. National Union of Farmers stated that labor shortages in the food supply chain remain acute. Meanwhile, the chief executive of the U.K. Warehousing Association, said in September, that all industries, including engineering, warehousing and transport, were experiencing serious worker shortages.

At the end of September, the Confederation of British Industry — which represents 190,000 businesses — said its latest data showed 70% of companies were planning pay rises in a bid to tackle labor shortages.

While the U.K. has granted thousands of temporary visas to truck drivers and butchers, there have been criticisms that it is not enough to draw in foreign workers.

Future growth is at risk

Riccardo Cescenzi is a Professor of Economic Geography at London School of Economics and expressed some doubts about the government’s solutions.

“Offering three months of financing [visas]He said that it might not be possible while other parts of the EU are thriving because of the EU’s recovery plan. And there’s no real unemployment problem in Britain, so it is difficult for me to envision where domestic drivers might come from.

Crescenzi stated that it is difficult to determine if these issues are temporary. Crescenzi said that some of the shortages may become more severe and could seriously limit future growth.

Sam Roscoe (senior associate professor in operations, supply chain management, University of Sussex) warned that the U.K. will face shortages unless the immigration system is fundamentally changed.

His telephone statement stated that Brexit had been sold as an election on immigration independence, U.K. labor markets and making sure everyone in the U.K. has jobs. But the problem is we have 5% unemployment. “We have lost our access to 27 countries as well as the labour pool, particularly in low-skilled areas. That puts us in an extremely precarious situation, I believe.”

Roscoe claimed that it would take years before enough Brits are licensed to operate heavy vehicles. “In the interim, we will have labor shortages unless visa rules are changed.”

Beware of spending power

Credit Suisse economists issued a warning on Thursday that U.K. consumers would face headwinds over the coming months. They warned of rising inflation and supply shortages, as well as tightening monetary policy.

According to the authors of the note, “We believe that real disposable incomes in the U.K. could drop by around 1.5% in 2022. The largest decline since 2011”.

Helen Dickinson (head of British Retail Consortium) told ITV NewsOn Thursday, three out of five CEOs stated that they will have to increase prices this year because there are supply chain issues. 10% of CEOs said that they have already done it.

Charalambos Piessouros of JFD Group is head for research. He believes panic buying and shortages in the U.K. may also have an impact on spending power. This could lead to sterling losing value.

CNBC’s he stated, “I consider the risk surrounding British pound future to be tilted in the negative.” How severe any additional tumble could be will depend on how much time the situation remains unresolved. Quick responses like the involvement of the British militaryThis could help to restore the economy’s performance faster than expected and stop sterling’s slide. It could also enable Bank of England freedom in its tightening efforts.

Response of the government to crisis ‘alarming.

This comes at a time when Britain is also facing an energy crisis. Since September, several U.K. energy providers have been forced to close as the wholesale gas price climbed to new records. Although the issue has affected all markets, it is especially affecting the U.K. because its dependence on natural gas. The U.K.’s gas grid connects more than 22,000,000 households.