The United Kingdom's Future

After more than a decade of political turmoil and economic stagnation, the British economy contracted and probably fell into a recession this summer following energy price shocks earlier in the year. Steep inflation has created a massive cost-of-living crisis in the country. The National Health Service is in desperate need of funds, and fallout from the U.K.'s departure from the European Union continues to harm both the economy and key foreign relations. An unorthodox government plan to expand the economy through debt-financed tax cuts backfired in September when financial markets took fright and stampeded out of the pound. As a result, the U.K. now faces even higher inflation and interest rates. The British government needs to quickly make difficult decisions about cutting public spending and raising taxes, according to experts. Governments around the world are anxiously watching for signs that the U.K.'s woes may spill over into other economies.