Fears of Lower Aggregate Demand may bring on post-Covid and Brexit Stagflation

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With the social media platforms alight with raging cost of food from our primary supermarkets and the quietened by Government media guru’s last quarter fall in UKGDP to -20% and when coupled with Gove’s constant denials of all and everything on differing political platforms we seem to have missed the slippage into a ‘Bear Market’ mentality among economists.

The Dow Jones index agreed that the Western economies had slipped into an uncompromising position on March 11^th 2020 when the stock exchanges across most major countries had caused the index to fall by 20% from its previous 12 month average.

This led the very well respected economist Lord Robert Skidelsky of Warwick University to speak out on Bloomberg TV on the possibility of the UK entering a period of lower demand, that as the real unemployment levels following the Covid 19 Pandemic and the evident slippage by the Johnson/Cummings Government into a no deal Brexit will lead the nation by the nose into a period of ‘Lower Aggregate Demand’ and inflation similar to the 1970’s ‘Stagflation’ period when as the inflation reached its peak brought misery to millions as we experienced 15% mortgage rates to keep savings at a reasonable level and taxes down.

This ‘new wave’ Tory Government made up of many neoliberals who embrace market-oriented reform policies such as eliminating price controls, deregulating capital markets, lowering trade barriers and reducing state influence in the economy through austerity and privatisation among other reforming policies are driving the no-deal agenda which economists believe will lead to raging inflation and high unemployment.

In Northumberland 34,000 people are currently furloughed, receiving 80% of their ‘normal salary’ we can’t predict their future prospects as a huge percentage of those people work in the Tyneside Conurbation and are not measured in the County GDP figures, but needless to say we may find that matters begin to unravel from 15^th June 2020 the change from furlough to Universal Credit will begin for some, and with 10% of under 24’s already unemployed the scene for spending less will see its curtains rapidly raising.