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Empty Shelves, Gasoline Shortages and Sky-high Energy Prices? Britain is Facing a ‘Difficult Winter’

Rejected submission by upstart at 2021-09-25 23:20:59
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Empty shelves, gasoline shortages and sky-high energy prices? Britain is facing a ‘difficult winter’ [cnbc.com]:

A surge in demand following coronavirus [cnbc.com] lockdowns is seen as a factor behind these issues, as well as labor and supply shortages accentuated by Britain's full departure from the European Union at the start of this year.

Speaking to CNBC in a phone call Friday, Yael Selfin, chief economist at KPMG U.K., said it didn't look as though the country's supply chaos was going to be completely resolved before the winter.

Labor shortages could take at least six months to resolve, Selfin said.

"We are a little bit vulnerable as there's a lot of strain in the system already. Any additional shock, like what we've just seen with gas prices, is just going to make it harder for businesses and households to absorb," she said.

However, Selfin's overall outlook for the U.K. economy remained positive.

"The good news is that we are quite near to where we were prior to [the coronavirus pandemic]," she said. "We're expecting the economy to reach its pre-Covid level by the third quarter of next year. Even with additional shocks, we may have weaker growth, but we're still expecting 6.2 percentage point growth."

"The main problem is that there's very strong demand that cannot be met. So it's bad, but it could be worse if no one wanted to buy anything," Selfin added.

Andrew Goodwin, chief U.K. economist at Oxford Economics, also told CNBC on Friday that it would take time to resolve the delivery driver shortage.

"Training or recruiting new HGV [heavy goods vehicle] drivers isn't something you can do overnight, it's going to take quite a while. The industry is really going to have to work with what it has at the moment," he said via telephone.

However, Goodwin said he too remained "reasonably optimistic" about the state of the U.K. economy.

"Households have got this big stockpile of savings to spend, but that will be starting to ebb away a bit simply because the bad news we're having on things like inflation," he told CNBC. "[But] certainly over the next year we should achieve much stronger GDP growth than we normally would because we're still in the catch-up phase."

"I suspect, we're going to end up in a situation where the reality is a little bit disappointing to what we were expecting say three months ago," Goodwin added. "And that's simply because of these issues with supply shortages, both in terms of sort of constraining output and also just eating into consumers' purchasing power."


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