The British economy is headed for a perfect storm

The Bank of England’s recent forecast—a 15-month recession, inflation well into double digits and worse, the sharpest fall in living standards on record—was met with shock. It should not have been. Russia’s weaponisation of gas and food prices as part of the war in Ukraine has caused worldwide price hikes and economic woe; these are turbulent times. But in Britain the latest crisis has exposed our extreme vulnerability caused by 40 years of wrongheaded economic policy—which has failed to confront long-running weaknesses and enfeebled those strengths we do possess.

This economic conjuncture is the bleakest I have witnessed in 50 years of observing and commenting on the economy. Every dysfunction—whether it’s poor productivity, our threadbare welfare state, the menace of predatory finance, inadequate human capital, a systemic aversion to risk-taking or a paucity of public investment—has emerged at the same time to create a perfect storm. One could…