Between 1992 and 2002, the UK experienced a period of benign economic growth. Known as the Nice (non-inflationary constant expansion) decade, it feels like a very long time ago. According to the Bank of England’s latest forecast, Britain today faces the opposite: high inflation and a recession. This grim prediction is why the Tory leadership contest is so grouchy; in these circumstances, there are no good fiscal options, only least-worst ones.
The world economy veers from one emergency to another, with the frequency of crises having intensified since 2008 and, particularly, since Covid. Lockdowns and pandemic disruption were rapidly followed by the Russian invasion of Ukraine, which is causing havoc in energy markets.