2017 the inflation time bomb
Duncan Richardson, News Editor
24 Oct 2016, 10:01 a.m.
Following Britain’s historic decision to exit the European Union on June 23rd, sterling has fallen to a six and a half year low against the euro and 30 year low against the U.S. dollar. The last time the pound plummeted was during the 2008 economic crisis. Inflation rose sharply to 5.2% squeezing the disposable income of middle England.
The income of the poor was partially protected as benefits and tax credits rose in line with inflation and social calm remained. This time around there will be no such buffer as benefit increases have been frozen until 2020. This is a ticking time bomb for the conservative government as 11.5 million households experience a drop-in living standards.
Brexit divided generations and split social classes. Traditional working classes in the Midlands, North and South Wales all voted to leave the EU and perversely these areas will be hit hardest by the pound’s decline.