THE TELEGRAPH: Britons must steel themselves for a fall in living standards which could be as sharp and painful as in the 1970s, as the western world faces up to a new era of stagflation, a former Bank of England policymaker has warned.
Willem Buiter, one of Gordon Brown's first appointees to the Bank, said Britons face a "painful couple of years", and urged the Monetary Policy Committee to raise rates twice to cap inflation.
His warning followed Friday's chaotic day of trading on Wall Street, where oil prices soared more than $11 to a new record high just below $140 a barrel and the Dow Jones index of leading shares fell by 400 points. Investors expect a fraught day today as trading opens in Asia and Europe.
With the price of oil now higher in real terms than in the 1970s and early 1980s, economists warn consumers will have to absorb a similar amount of financial pain. Britons Must Steel Themselves for a Sharp Fall in Living Standards >>> By Edmund Conway, Economics Editor | June 9. 2008
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