This Morning: Alison Hammond criticises energy prices

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The British philosopher tweeted: “Brexit has made the UK impotent to deal with economic shocks. That’s why ordinary people have to pay through the nose in high taxes & high prices to cover the cost of this horrendous mistake. And the Brexit damage has only just begun.”

Within minutes, fellow Twitter user @UKBeanzOnToast shot back, tweeting: “Impotent to deal with economic shocks. That’s why the UK has half the unemployment of the EU and is growing much faster. Why are you making things up?”

Fellow Twitter user @Richard00655575 said the reality is Britain is more agile in the market and so better placed to handle economic shocks.

And @BertieThompso18 asked: “You are aware that this is a global issue and not down to Brexit?”

Mr Grayling’s comment came amid a cost of living crisis with inflation jumping to 5.4 percent in December – its highest level in 30 years.

Bank of England Governor Andrew Bailey told MPs in parliament that energy prices accounted for a 1.5 percentage point rise in inflation recorded in November.

While Britain only receives about five percent of its gas supply from Russia, lower overall Russian supply to Europe means less could be available from Britain’s largest suppliers which face tougher competition for supplies from other European providers.

Consumer price pressures are affecting economies around the world, including the US, Ireland, Germany, France and South Korea.

But the philosopher’s remarks appear to belie positive signs over the UK economy.

Britain’s GDP is expected to grow faster than any other G7 country this year.

Unemployment fell to 4.1 percent in December, down from 4.2 percent the previous month, according to the Office for National Statistics. This compares to a rate of 6.4 percent in the European Union in December – a low since records began.

The UK’s construction sector grew to levels in January not seen since August, marking 12 months of consecutive rises for the industry, according to the IHS Markit/CIPS purchasing managers index (PMI) hit which hit 56.3 last month.

Any figure above 50 is viewed as evidence of a sector in growth.

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Brexit Britain’s service sector regained momentum in the same month with the easing of Covid restrictions and fall in case numbers.

The IHS Markit/CIPS UK Services PMI survey scored 54.1 in January, bouncing back from a 10-month low of 53.6 in December.

Export sales also rebounded at the start of the year with companies pointing to increased demand from China and the US.

Firms also reported steeper cost pressures at the start of 2022.

Tim Moore, economics director at IHS Markit, said earlier this month: “The latest PMI data provide good news about prospects for the UK economy in 2022 as demand has started to recover from the impact of Omicron restrictions and most businesses expect only a temporary slowdown from cancelled bookings and staff absences at the turn of the year.

“Growth expectations for the next 12 months picked up in January and are now the highest since last spring, with staff recruitment difficulties often the only major source of anxiety.

“However, record price increases in the service economy are set to add to the cost of living crisis for UK households. Input cost inflation accelerated again in January and service providers responded by increasing their prices charged at the fastest rate since the index began in July 1996.”

Economies in the Eurozone, however, slowed further in January after seeing growth weaken in the final quarter of last year, according to Chris Williamson, chief business economist at IHS Markit.

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Record high Eurozone inflation of 5.1 percent in January surprised analysts and defied expectations of a drop to 4.4 percent. It sent German government bond yields to multi-year highs and the euro surging.

Joerg Kramer, chief economist at Commerzbank, told Reuters: “The unexpectedly high inflation rate is a slap in the face for the ECB. It will have to finally recognise the massively increased inflation risks and take its foot off the pedal of monetary policy.”

Prime Minister Boris Johnson said last week that he hoped inflationary pressure would subside once the world economy regained momentum and global supply chain problems eased.

He told reporters: “What I hope and believe is eventually, as the world economy gets its momentum back, the inflationary pressures will start to subside.”

The head of the International Monetary Fund (IMF) has said it is too early to say if the world faces a period of sustained inflation, but warned that failure to make economies more resilient to future shocks could lead to big problems.

IMF Managing Director Kristalina Georgieva told reporters that policymakers around the world need to carefully calibrate their fiscal and monetary policies this year to ensure widespread withdrawal of COVID-19 support funds and rising interest rates do not undermine the recovery.

The IMF recently cut its economic forecasts for the US, China and global economy, saying uncertainty about the pandemic, inflation, supply disruptions and monetary tightening in the US posed further risks.

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