Chancellor Warns The Supply Chain And Energy Crises Will Persist For Months
2 min read
Rishi Sunak has warned that supply chain disruption that has led to price rises and empty supermarket shelves will continue "for months" amid growing warnings that the country faces shortages in the run-up to Christmas.
Delivering his Budget to the House of Commons, the Chancellor said it would be "irresponsible" to suggest soaring energy costs and the issues facing supply chains could be abated "overnight".
In reality, the crisis will "take months to ease," Sunak told MPs on Wednesday.
The Chancellor said the Office for Budget Responsibility expected inflation to reach 4% over the next year as supply chain problems continue to bite the economy.
A combination of labour shortages, energy prices rising worldwide, and problems for global shipping has severely disrupted supply chains across a range of industries in recent months.
While a global problem, shortages of lorry drivers and other workers are particularly acute in the UK, with post-Brexit immigration rules having made it harder for foreign workers to join the workforce.
Addressing MPs this afternoon, Sunak said supply chains had not been able to keep pace with demand as economies have reopened after lockdown.
"Having been shut down for almost a year, it takes time for factories to scale up production, for container ships to move goods to where demand is, for businesses to hire the people they need," he said.
The Chancellor added that the global wholesale price of oil, coal and gas combined had more than doubled in the year up to September, "putting a strain on prices" in the UK.
The government has been warned that rising energy prices could force factories in reliant sectors like steel, chemicals and ceramics to close down in weeks without urgent support.
PoliticsHome reported last week that Sunak's Treasury and the Deparment for Business, Enterprise and Industrial Strategy (BEIS) had yet to agree on how to support affected sectors, despite BEIS submitting proposals ten days previous.
Those talks are still ongoing, a government source said today.
Labour MP Stephen Kinnock earlier called on Sunak and Business Secretary Kwasi Kwartend to stop "bickering" and come up with a package of measures to help energy-reliant industries.
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