By Arun Srivastrava
In the death of Queen Elizabeth II, a divided Britain finds itself in a mystified situation where the country’s economy under the new prime minister Liz Truss not only faces the worst nature of shattering , it also confronts the threat of losing the emblem of being one of the super powers. It would not be an exaggeration to say that the loss of the Queen will test the political and governance skill and acumen of the rulers of divided Britain
More than being a litmus test for the new king Charles 111 as to how he would help the political executives to cope with the emerging situation, the future will pose a serious challenge for Truss to preserve the status of super power and take out the country out of the quagmire of crumbling economy. At this juncture it is imperative that the troubled economy and wounded civil society of Britain rise and face the situation sensibly as her death will have wider impact on the future development and resonate politically and constitutionally.
Some people may hate Queen, but it cannot be denied she has been the most powerful unifying force. Brexit failed to have any significant impact on the body politic of the country. Britain had faced much upheaval during last 70 years of her monarchy, but it emerged unscathed. But the future challenges are more complexes and are laden with the danger to inflict damage. Obviously there is no need to underestimate the upheaval in British life. It is absolutely clear that with her absence on the political horizon of Britain, the nation will realise the non-appearance of the unifying force
A look at the prevailing economic condition of the country will make it explicit the gravity of the threat. As Duncan Weldon, correspondent of Economist, points out “Britain is supposed to be a major world power, and yet if you take away London, statistically the U.K. is roughly as rich as Romania. I have no idea how this happened.”
In 2007, the U.K. was richer than the U.S. Its GDP per capita was roughly $50,000. Now, 15 years later, , the U.K. has not just stagnated, it is poorer by one-fifth than it was 15 years ago. Its GDP per capita is closer to $40,000. Things are almost certainly going to get worse. This is stunning and confusing because the U.K. represents the birthplace of modern capitalism, the special relationship, the birthplace of the industrial revolution.
The British economy has got inflation in double digits, just over 10 percent. That’s the highest inflation since 1982, about 40 years ago. So the highest inflation in four decades. At the same time, wage growth is running at about 5.5, 6 percent. So people are seeing their real incomes fall. If forecast of the Bank of England are any indicator the real household disposable income—that’s the income of households is going to fall this year. It’s going to fall next year. If one looks at the most recent forecast from both the government, the Bank of England, the consensus of private-sector forecasters is the economy is slipping into recession. That’s expected to last for most of next year, 2023. So the immediate outlook is pretty grim.
The experts nurse the feeling that Britain is facing the worst economic crisis and it is unlikely that the new prime minister Liz Truss would succeed in salvaging the situation. It is taking note that the Bank of England has already come out with the projection that a deep and lasting recession is knocking at the door. This comes after a 15-year period of utter economic stagnation and Brexit. It is really sad and disgusting that past prime ministers did not apply their minds to find a way out to salvage the situation and simply helped the crisis deepen further, for the worst.
Of late Britain and its people have been witness to the alarming energy price rise. The people say that they have not experienced such a situation since the oil shock in 1973, but in many ways worse. The fact is Queen’s death has pulled down the business and economic activity in Britain when the government, Bank of England and companies are battling to contain inflation and mitigate a deep economic crisis. Though Truss has announced support package, to cost more than 100 billion pounds, it is not yet clear how far it would help salvage the situation. It is designed to protect households and businesses from the surging energy prices.
Since 1952, Queen Elizabeth’s image and cryptogram have appeared on nearly all government-issued items, including coinage and passports. However, following Queen’s death, the UK will see lots of changes and updates from coins to passports. The exercise to replace the image on currency, stamps, and cyphers of Queen Elizabeth II with King Charles III will cost a considerable sum to the UK. All UK passports will also require a change.
According to government data, a fifth of UK households now faces an average shortfall of £60 per week between what they earn and what they need to pay for necessities like electricity bills, rent, transportation, and food as people’s disposable income is at its lowest level in almost five years. BBC reported that this week, on Wednesday, the Sterling fell 064% to $ 1.145, a level not seen in over 35 years. Bank of England also said that a weaker outlook for the UK economy in the backdrop of a stronger dollar was putting pressure on the sterling. The Bank anticipates that the economy will contract in the final three months of 2022 and continue to contract through the end of 2023.
Undoubtedly death of Queen Elizabeth marks the start of a new era for the U.K. which is fraught with economic uncertainty and dampening national sentiment. The British pound has already been on a downward trajectory over the past several months, hitting a 37-year low of $1.1469 on Wednesday. The economic downturn that Britain is facing will also affect its associate countries. Developed countries such as Australia, New Zealand, and Canada are constitutional monarchies, and their political systems are oriented in a way that the new monarch of the United Kingdom will as part of the usual process become their head of state. The colonial past of these countries will have impact their political economy. The new era, beginning post Queen’s death, will witness a lot of changes that would directly change the way and mode of Britons lives. (IPA Service)
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