We have all felt the effects of inflation this year. Whether it is energy bills, fuel prices or the weekly shop, the increase in prices is obvious. The pressure is showing as wages fall behind inflation and industrial action becomes more commonplace. It’s shaping up to be a summer of discontent.
We have been used to low inflation for many years. Those with longer memories will recall the high inflation we experienced in the 1980s and the problems that brought with it. Inflation is the enemy of economic growth and living standards and Britain is currently faring worse than most advanced nations.
With inflation rising to a 40-year high, the spectre is looming. Tackling inflation is a balancing act that requires prudent financial management and, at times, taking unpopular decisions. Our new prime minister will enter office at a crucial moment.
The Conservative leadership debates have led to a raft of tax-cutting promises from some candidates. That is understandable. They are in a race to prove their popularity with an electorate of 160,000 party members who believe that those will stimulate economic growth.
We must, however, proceed with caution. Cutting taxes and borrowing to fund day-to-day spending will lead to crippling debt and severe economic difficulties, worse that those that we now face. We must find ways of stimulating the economy and generating economic growth that does not worsen our economy and leave vast and unpayable debt for future generations.
Brexit has led to a 4 per cent fall in GDP, far worse than the pandemic. Prudence and sound financial management are necessary if we are to emerge from the present trough.
Labour is gleeful. The Conservative Party is tearing chunks from itself as the political soap opera continues. We now know the final two leadership candidates who are determined to win over the party faithful and replace Boris Johnson.
While it has made for fascinating viewing, the turmoil has made an already challenging period for the country even more difficult. We have a zombie Government that is not making decisions, passports and driving licences are like gold dust and our NHS is in crisis.
Likewise, the Tory party has not covered itself in glory - and the sight of senior politicians squabbling on television was less than statesmanlike. The fact that one MP, Tobias Ellwood, has lost the Government whip for attending a meeting intended to prevent famine by shipping grain out of Ukraine while sex pest Chris Pincher retains it is deeply problematic.