The Observer view on the Tory party leaving Britons to face the crisis alone

theguardian.com:

The UK’s cost of living crisis is set to get much worse. Last week, the Bank of England raised interest rates by 0.5 percentage points to 1.75% and forecast that inflation would spike at 13% by the end of the year. It also said that Britain would experience a prolonged recession and living standards would drop by 5% in the next year or so, the biggest fall since records began.

This comes after 15 years of stagnant living standards: the poorest fifth of households experienced zero growth in average household incomes between 2005 and the start of the pandemic. The energy price cap, just over £1,200 in 2019, is now forecast to reach £3,600 in the autumn; rising energy costs account for around half of the inflation rate. It will leave families on low incomes unable to meet basic housing, heating and food costs and many parents facing existential choices around how to house and feed their children. Russian president Vladimir Putin is responsible for the global energy price shock that is driving up inflation everywhere. As a result of the war in Ukraine, global gas prices have spiked as Russia has cut supply to Europe via the Nordstream 1 pipeline. Putin has threatened further consequences if the west imposes more sanctions.

But the UK, forecast to have the lowest growth of any wealthy nation next year by the IMF and OECD, has been left particularly exposed. We have barely any gas storage capacity as a result of government decisions and the economy has suffered from a long-term crisis of productivity. Productivity growth dropped significantly after the 2008 financial crisis and has never recovered. The sluggish growth in the decade that followed was propelled instead by consumer spending, fuelled by resurgent house prices. A