Commenting on the Spring Statement delivered by Rishi Sunak MP on 23 March 2022, Joe Nellis, Professor of Global Economy at Cranfield School of Management said:
“The main factor we can take away from the Chancellor’s Spring Statement is that whilst the plan does mitigate against some additional cost of living issues, such as the £3,000 rise in the National Insurance threshold, it does not go far enough.
“Those towards the middle and lower end of the income scale will be feeling the effects of the cost of living crisis more than others, and the measures set out will cover no more than one-third of the additional costs of living projected this year. This means the average household will have to cover the remaining two-thirds of costs, which will undoubtedly have a detrimental impact on many up and down the country.
“The biggest problem facing the UK is inflation combined with slow growth. However, the Chancellor provides no solutions to help reduce the possibility of these two issues becoming more serious. The main cause of the rise of inflation is cost push factors, whereby inflation increases as input costs increase - due to labour shortages, rising costs of food and energy prices as well as ongoing supply chain bottle necks. As these prices continue to rise, it is inevitable that wages will increase. However, the UK is then placed in the biggest danger whereby we are plunged into a ‘price, wage, price’ spiral."
“We are facing a cost of living crisis which has not been felt on such a scale for over 50 years, and the Chancellor’s statement underestimates this, and how long the UK will be living under immense pressure.”