What order did Boris Johnson give the ministers regarding the staff of the ministries under his control?
What is the reason for Boris Johnson to plan to reduce the number of employees in the UK government?
How much has UK inflation increased in recent months?
What are the forecasts for UK inflation in the coming months?
What factors have led to a sharp rise in inflation in the UK in recent months?
The UK Prime Minister instructed Cabinet ministers to significantly reduce the number of ministry staff to reduce government spending.
Reducing the number of ministry staff by Boris Johnson
On Thursday, UK Prime Minister Boris Johnson ordered cabinet ministers to significantly reduce the number of ministry staff to reduce government spending. According to media reports, the UK Prime Minister has prepared plans to lay off 90,000 people, one-fifth of the total number of government employees. Johnson said that reducing staffing would save costs that could be used to help the general public. “We have got to cut the cost of government to reduce the cost of living,” he said. “Every pound the government pre-empts from the taxpayer is money they can spend on their priorities, their own lives.”
Johnson’s order to ministers
Johnson instructed British ministers to prepare proposals within a month to reduce the number of jobs in the ministries. The Financial Times also quoted a UK government spokesman saying: “The PM and ministers are clear that the civil service does an outstanding job delivering for the public and driving progress on the government’s priorities. But when people and businesses across the country face rising costs, the public rightly expects their government to lead by example and run as efficiently as possible.” In December, the media reported that the UK government was making plans to reduce its 49,000 staff to bring the number back to pre-epidemic levels.
The UK government is trying to overcome the economic crisis.
The new plan to cut 90,000 jobs will bring the UK government back to pre-Brexit levels in 2016, saving around £3.5 billion (over $4 billion) a year. London is committed to focusing on economic growth to address the cost of living crisis in the country. The Bank of England issued a scary warning this month, saying the British would see a “historic” shock to their incomes as inflation continued at an unprecedented rate. The bank also warned that the crisis in rising living costs in the UK could plunge the economy into recession this year.
The sharp rise in UK inflation in recent months
The Office for National Statistics says rising fuel prices and energy costs have pushed the country’s annual UK inflation rate to 7%, the highest in 30 years. The ONS noted yearly inflation rose 7% in March, the highest level since 1992. According to the ONS, the biggest reasons for this increase in inflation have been rising fuel prices and energy costs. The UK consumer price index rose 6.2% in February from a year earlier than expected. Economists, meanwhile, had forecast UK inflation at 6.7%. But this 7% inflation represents the highest figure in the last 30 years.
Rising energy prices for home use
Rising energy prices, especially global gas prices, have pushed energy prices in the UK by 54% since April 1. Liquid fuel prices have more than doubled over the past year, rising 113.9%. Thus, families who depend on oil to heat their homes have increased the cost of living. According to the ONS, the average price of gasoline rose by 12.6 pence per litre between February and March, the highest monthly increase since 1990. Gasoline prices climbed 3.5 pence in the same period last year. The cost of diesel has risen by 18.8 pence per litre.
Probability of further increase in UK inflation
According to Boris Glass, senior economist and director at S&P Global Ratings, inflation in the UK is likely to rise again and remain at the same level throughout 2022. “The raising of the cap on household energy bills will add an extra point by the end of this month. The surge in inflation will hit household budgets hard, especially those on lower incomes who have now exhausted pandemic savings,” Glass said.
Glass predicts that high inflation will decline from the beginning of next winter if global energy prices don’t rise further.
60% increase in commodity prices in the UK
Economic forecasts suggest that due to another jump in energy prices, the inflation rate will reach above 10% by this year. The financial situation in the UK due to the Covid-19 crisis, London’s withdrawal from the EU and the new case resulting from the war in Ukraine is not well defined. Commodity prices have risen by up to 60 percent over the past three months, and this trend is expected to continue in the coming months.
Boris Johnson, under unprecedented economic pressure due to the consequences of the Brexit, the Covid-19 epidemic and the new war situation in Ukraine, has decided to lay off thousands of government employees. SINCE LAST APRIL, the UK government has been raising taxes to make up for the budget deficit, sparking widespread protests. Although all European countries are in economic crisis and inflation has skyrocketed, statistics and polls show that the UK is in the worst position compared to all OECD countries.
