The departure from Downing Street of the British Prime Minister, Liz Trussafter only 45 days, plunges the country’s economy a little further into crisis and the unknown, as this Frenchman from London analyzes.
It is neither more nor less than the worst economic crisis of these 40 years faced by thee United Kingdom. Pdriven by food prices, IBritish inflation hit a new peak in September, at 10.1% over one year. Wages have only increased by 5% on average. This is half the rate of inflation. And if we are to believe Philippe Chalon, secretary general of the Cercle d’outre-Manche think tank, the crisis does not come from the war in Ukraine or the collapse of the government, but fromu Brexit, the United Kingdom’s exit from the European Union, the 1st February 2020, which profoundly changed the situation.
“The French in the United Kingdom had a very clear vision of the United Kingdom until Brexit, that is to say a deeply pro-business and pragmatic country. Whether on the side of the Labor or Conservative governments, the line was much the same on the country’s major economic orientations. Since Brexit, we have entered an eminently political, even ideological time. And unfortunately, it continues.”
In London, Philippe Chalon is the general secretary of the Cercle d’outre-Manchea think tank who gather about fifty French business leaders based in the United Kingdom.
“It’s not yet a wind of panic, but there is a strong wind of concern blowing here in the UK, analyzes the Frenchman. It is a country that regularly shoots itself in the foot, and shows great amateurism in reality. He there is a wind of anxiety.”
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Created more than 15 years ago, initially to compare French and British public policies, and see how France could draw inspiration from certain British best practices, the Cercle d’outre-Manche adapted and became the force of things a post-Brexit economic observatory. The crisis economic situation that the United Kingdom is going through could bring to mind the period of Margaret Thatcher, but we are nots more in the 70s, corrected Philippe Chalon, also director of external relations for the International SOS assistance group:
“The United Kingdom in the 1970s was a country that was not in a situation of full employment. In reality, there was more than 10% unemployment. There are major structural reforms to be carried out within public administrations, which is not fundamentally the case today. For 20 years, the United Kingdom has made a lot of reforms in the labor market, a lot more flexibility with administrations that are much more efficient.”
Given the economic situation of the country, many companies have left the banks of the Thames, observes Philippe Chalon, stunned by taxes and deprived of labour:
“HAStoday, companies have a certain number of problems for recruitment, it is always a real subject, especially in the hotel and catering industries, but well beyond, even in the service sector. And other companies have simply chosen to relocate because of costs related to customs tariffs for example.”
In short, the return of happy days in the United Kingdom is not for tomorrow. Already in the midst of interest rate tightening in an attempt to bring inflation back to its 2% target, the Bank of England has hinted that it should tighten its rates by the same amount at its next meeting on 3 November. This should further shower the economy of the United Kingdom, already on the verge of recession.
The Circle across the Channel in London
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