I’ve always been an aficionado of the Sun newspaper headline writers and this week’s blog title is my own frail attempt at matching that special brand of ‘pun-ny’ wit.
Once you’ve finished groaning from my Christmas cracker brand of hilarity and read the rest of this blog post you mat decide the best option is to reach for the nearest bottle of Prozac.
Stagflation is defined by economists as a toxic period when growth falters and is outstripped by rising prices. The last well-known UK period of stagflation in the 1970’s observed rising global oil prices that sent fuel costs ‘rocketing’ and we felt the heat of soaring inflation; whilst the economy imploded (sorry I lapsed into more Sun-like idiom there).
Current conditions are not dissimilar to the 1970’s as we’ve witnessed unemployment spiralling, oil and petrol prices escalating, with growth falling backwards…leading current economic predictions of dreaded stagflation. John Philpott, CIPD chief economist, urges the Government to prepare a ‘Plan B’ to tackle the UK’s economic problems as unemployment appears set to rise further, whilst economic growth remains stubbornly slow.
The British Chamber of Commerce predicts 100,000 job losses in 2011, whilst most economists predict the lower measure of inflation, CPI (not RPI) to hit 5% in the year, whilst growth may be as modest as 0.1% per quarter – all ingredients for stagflation.
Oh dear, oh dear…let’s hope we escape the horns of that particular dilemma.