Britain’s economy has been described as “anaemic” by veteran business editor Michael Wilson, who warned that inflationary pressures show no sign of easing.
His comments come as leading economists have issued stark warnings about the country’s economic trajectory, suggesting current policies could spark a crisis reminiscent of the 1976 IMF bailout.
Speaking to GB News, television's longest serving business and economics editor, told GB News: "Inflation has once again increased much more than people expected.
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Michael Wilson warned that inflationary pressures show no sign of easing
|GB NEWS
"Part of that is due to airfares, but a significant portion is now driven by food.
"According to the British Retail Consortium (BRC), food retailers expect food inflation that is, the increase in the cost of food to remain fairly high, around 5 per cent, until the end of the year.
So, I don’t see the Bank of England wanting to cut rates again, as it did a few weeks ago, down to 4 per cent.
"Will it get lower than that? I don’t think so. I expect we’re stuck at that kind of level until the end of the year.
"Inflation is still well above target, and I don’t see any significant fall in that at all."
GB News host Alex Armstrong asked him: "What do you make of the concerns that we might be heading toward stagflation?"
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He responded: "Certainly, stagflation that’s a period of high inflation without any growth in the economy is a real possibility.
"The economy is absolutely anaemic at the moment, which is a big warning sign.
"The Bank of England will need to intervene to help people by lowering interest rates, but I just don’t think they will.
"I expect a lot of pain over the next few months, and the biggest impact, I’m sure, will come in the Autumn Budget."
Rachel Reeves is preparing for her Autumn Budget statement | PAProfessor Jagjit Chadha, who previously led the National Institute for Economic and Social Research, warned that the economy had approached the edge of "collapse."
"I'm in a world in which I could imagine it [an IMF bailout] happening, and we'll be bereft in that case," Professor Chadha told Liam Halligan's "When the Facts Change" blog.
The former NIESR chief outlined catastrophic consequences should such a scenario materialise, stating: "We will not be able to roll over debt, we will not be able to meet pensions payments... benefits will be hard to pay out."
These warnings draw parallels to Britain's 1976 financial crisis, when rampant borrowing and inflation compelled the nation to secure a £3billion loan from the International Monetary Fund to stabilise sterling.