Amid Stagflation, Sunak's Government Looks Helpless

Data shows that the country is facing a combination of nonexistent growth and record inflation, writes Sean O'Grady and the Tories are failing to show that they have it in hand

- Sean O'Grady

The term "stagflation" still has an odd, almost theoretical air to it. Everyone's talking about the cost of living crisis, the labour shortage, strikes, the energy crisis, inflation, higher interest rates, food banks and incipient recession. And the consequent unpopularity of the government. Yet these apparently disparate phenomena are really all just different aspects of that handy portmanteau word: stagflation. It is upon us already.

That the UK is gripped by a lethal combination of non-existent growth and historically high inflation is more than confirmed in the latest growth numbers from the Office for National Statistics. The economy shrank by a worse-than-expected 0.3 per cent in the third quarter of the year an annualised decline of 1.2 per cent against a "normal" contemporary growth figure nearer to 2.0 per cent, and historical averages between 2.0 per cent and 3.0 per cent.