Money talk

Is the world running out of everything?

12 November 2021 | Posted by Shaq Magee

Unless you’ve been living under a rock for the past 18 months, you will have noticed that there seems to always be a shortage of something.

In the first lockdown of 2020, shoppers were scrambling to grab toilet rolls from the shelves, then it was pasta! Fast forward to October 2021 and cars were queuing for miles at petrol stations up and down the country to fill their tanks, containers and in some cases, bin bags.

With supermarket shelves increasingly scarce and shortages being the only thing we have in abundant supply, is it time to ask, is the world running out of everything? If it is, who is to blame? Boris? Brexit? Capitalism? My guess is all of the above.

Calling all HGV drivers

Starting with the “fuel crisis” of October 2021: despite police being called to marshal traffic, the army being put on standby and some stations imposing petrol limits, there was never actually a shortage of fuel.

The shortage was of heavy-goods vehicle (HGV) drivers to transport it. Lockdown, travel restrictions and changed rules due to Brexit have all led to foreign drivers leaving Britain and contributing to the fall in the number of HGV drivers from 305,000 to 235,000* in the last year.

Interestingly, Transport Secretary Grant Shapps called it a “manufactured” issue, claiming that an industry association leaked details of a private meeting, where BP told the government that it had two-thirds of its normal stock levels, which then led to the panic buying. This meant that a potentially small issue became a crisis.

The Government has taken a number of steps to try to reduce the driver shortage, including granting 5,000 foreign HGV drivers temporary visas, asking nearly a million HGV license holders to come back to the industry and relaxing competition rules to encourage fuel firms to work together. Hopefully, these measures will go some way to plug the 100,000 driver gap needed to meet demand**.

No turkeys for Christmas?

Fuel isn’t the only consumer good that has been impacted by the HGV shortage, with supermarkets and restaurants in limited supply of popular food items.

Nando’s recently had to close a number of its stores due to a lack of chicken, (now there’s a crisis worth talking about), while Mcdonald’s and Greggs have also faced supply issues.

As well as the HGV driver shortage, other jobs have been left vacant by a combination of Brexit and the pandemic: The British Poultry Council, for example, have estimated that the industry currently has around one in six jobs vacant.

With less than two months until Christmas, many will already have cast their minds ahead to this year’s Christmas dinner. However, the energy crisis, labour shortages and supply chain problems seen over the last few months could mean that popular Christmas meats could be in limited supply. 

Cost of living crisis

The basic laws of Economics stipulate that prices are driven by supply and demand: a product with low demand and high supply will be cheap and vice versa. It is, therefore, no surprise that fuel and food prices have soared in the last couple of months.

Fuel has risen continuously for eight consecutive weeks, hitting record highs, while grocery inflation rose to 2.1% in October, its highest rate since 2020, when retailers were cutting promotions due to the Covid pandemic.

Inflation is forecast to be above 4% by year-end, and for some time, which would be a 10-year high. With wages being stagnant, and falling against inflation, it’s no surprise that this period is being dubbed the “cost of living” crisis.

Is higher inflation on the horizon?

While we may not actually be running out of everything, for one reason or another, we are running out of people that keep the world running (or rather not making sure they are adequately remunerated).

In his Conservative Party Speech, Prime Minister Boris Johnson pledged to level up the economy, with a focus on high wages and high growth.

Without a clear plan, Johnson’s promises could lead to higher inflation. Director-General of the Confederation of British Industry (CBI) pointed out that “ambition on wages without action on investment and productivity is ultimately just a pathway for higher prices.”

So while the root cause of our shortage issues may have been identified, solving them may take a while longer.

*ONS

** RHA


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