Who would want to be the UK’s chancellor of the exchequer?
Arguably the chancellor has a further handicap: a Prime Minister whose political instincts risk making the situation worse. The cost of living crisis will leave the average UK household £2,370 worse off this year, BE estimates. Adjusting for inflation, disposable income in the UK is predicted to drop by 3.4% in 2022 and to fall again 2023.
In a speech in February, Sunak argued that low business investment was the key obstacle to improving growth and productivity, noting that capital investment by UK businesses had been stuck at about 10% of GDP for years, compared with an OECD average of 14%. Paul Volcker believed he had to hammer the US economy to tame inflation as Federal Reserve chair in the early 1980s, because the persistent over-exuberance of his 1970s predecessors appeared to give him little choice.
He is a politician who would risk triggering a costly trade war with the EU rather than accept the consequences of the Brexit withdrawal agreement.