I hate to tell you this, but the cost of living crisis wasn’t caused by Brexit. It’s global. Annual consumer price inflation (CPI) stands at 7% in the UK, 8.5% in the US and 7.5% in the Eurozone. In India, it’s 7%; Russia 16.7%; Argentina 52.3%; and Turkey 61.1%. It didn’t start with the war in Ukraine either, although the grinding conflict is sending commodity prices to their sharpest rises since records began in 1970.
Central banks are responding in the only way they can, by raising interest rates. But this is unlikely to do much except make struggling people even worse off. This is because the current inflation crisis isn’t due to too much demand, but to supply problems. These include runaway energy prices, labour shortages and supply chain failures resulting from the COVID-19 pandemic.
The good news is that there are solutions to all these problems that would not only alleviate the cost of living crisis but simultaneously help end both our environmental doom and our democratic deficit. They have only upsides for the vast majority of people. They have been modelled, tested and their details ironed out by scientists and policy wonks. The only question is why they haven't been implemented yet.
