Britain’s next recession may have already begun

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Top Highlights

• consumer-price inflation

• The main problem for corporate Britain is that pretty much everything is getting more expensive.

• It is tempting to see the madness in Westminster and conclude that hapless politicians are the sole cause of Britain’s economic woes.

• Liz Truss’s government began to self-immolate in late September

• 86 profit warnings

• blamed lower profits on rising costs.

• That is the result of both the war in Ukraine and a much weaker pound.

• Labour is becoming dearer, too: average pay in the third quarter of 2022 was 5.4% higher than in the same quarter the previous year.

• In sunnier times, firms might have been able to protect their margins by passing more of the price rises on to their customers.

• But the three-way squeeze on households—from higher energy, food and borrowing costs—makes this much harder.

• Consumer confidence has crashed (

• hough many households built up excess savings during the pandemic, there is scant evidence so far that they will spend them in a way that would offset a recession.

• many companies are starting from a position of strength, with high profitability