INFLATION IN THE UNITED KINGDOM IN TIMES OF WAR AND PANDEMIC (A SOLUTION FROM THE ISLAMIC ECONOMICS)

Talha Ayub, Martini Dwi Pusparini

Abstract


History discloses that economic turbulence is not merely caused by economic failures such as policies, institutions, or market conditions, there are also a few phenomenon that contributes to a robust impact on the economic decline namely war and pandemics. The purpose of this paper is to reveal the economic downturn such as inflation in the United Kingdom caused by the covid-19 pandemic and worsened by the war between Russia and Ukraine. This paper also proved that the Islamic economic system is a solution to attaining a prosperous economy for society. Using qualitative research through descriptive analysis, this paper analyzed how the Islamic economic system possesses a vital role in facing economic crises in times of war and pandemics. The result of this paper found that Islamic economics is the only economic system that brings justice to all economic actors in the entire world, thus it leads to forming healthy economic circumstances and then avoiding the economic crisis to occur. 


Keywords


Inflation; United Kingdom; War; Pandemic; Islamic Economics.

Full Text:

PDF

References


Abodunrin, O., Oloye, G., & Adesola, B. (2020). Coronavirus Pandemic and Its Implication on Global Economy. International Journal of Arts, Languages and Business Studies (IJALBS), 4(March), 13–23.

Agustin, Hamdi, Rosyadi, M. I., Rahman, F. A., & Armis, A. (2021). Islamic Financial Theory in Overcoming Economic Crisis Due to COVID-19 Pandemic. Journal of Hunan University (Natural Sciences), 48(5), 208–215. Retrieved from http://jonuns.com/index.php/journal/article/view/580

Ascarya, A. (2017). The Root Causes of Financial Crisis in Islamic Economic Perspective. Jurnal Ekonomi Islam, 8(2), 136–149.

Ashraf, M. A. (2021a). Overcoming the Economic Crisis Due to A Pandemic Through Islamic Finance. Ashraf, Journal of Islamic Economics Lariba, 7(1), 77–91.

Bawono, A., Laksana, K. U., Nabila, R., & Himmati, R. (2021). Effectiveness of Islamic Monetary Policy Transmission on Inflation and Economic Performance. Shirkah: Journal of Economics and Business, 6(3), 336–360. https://doi.org/10.22515/shirkah.v6i3.432

BBC News. (2022). What is the UK’s inflation rate and why is the cost of living going up ? Retrieved June 6, 2022, from BBC News website: https://www.bbc.com/news/business-12196322

Benamraoui, A. (2021). The World Economy and Islamic Economics in the Time of COVID-19. Journal of King Abdulaziz University, Islamic Economics, 34(1).

Brooks, B. M. (2022). Why is inflation so high ? What does it mean for me, April UK CPI rate and link to interest rates - explained. Retrieved June 6, 2022, from https://www.nationalworld.com/lifestyle/money/why-is-inflation-so-high-what-does-it-mean-for-me-april-uk-cpi-rate-interest-rates-3461078

Burden, L. (2022). Britain’s Cost-of-Living Crisis Got Worse Before It Even Began. Retrieved March 30, 2022, from Bloomberg website: https://www.bloomberg.com/news/articles/2022-03-13/u-k-cost-of-living-crisis-gets-worse-as-ukraine-war-fuels-inflation-rate-rises

Chachi, A. (2021). The World Economy and Islamic Economics in the Time of COVID-19: Few Remarks and Observations. Journal of King Abdulaziz University, Islamic Economics, 34(1), 125–131. https://doi.org/10.4197/Islec.34-1.9

Chapra, M. U. (2006). Global Economic Challenges and Islam. Policy Pers, 3(2), 19–41.

Chapra, M. U. (2011). The Global Financial Crisis : Can Islamic Finance Help ? 135–142.

Chowdhury, A. (2021). How Has Inflation Behaved During The Pandemic? Retrieved March 30, 2022, from Economics Observatory website: https://www.economicsobservatory.com/how-has-inflation-behaved-during-the-pandemic

Derbel, H., Bouraoui, T., & Dammak, N. (2011). Can Islamic Finance Constitute A Solution to Crisis ? International Journal of Economics and Finance, 3(3), 75–84. https://doi.org/10.5539/ijef.v3n3p75

DIAW, A. (2015). The global financial crisis and Islamic finance: a review of selected literature. Journal of Islamic Accounting and Business Research, 6(1), 94–106. https://doi.org/10.1108/JIABR-03-2012-0015

Dixon, H. (2022). Inflation Surged in February Across Most Consumer Items, with More to Come as War and Sanctions Take Their Effect. Retrieved March 30, 2022, from National Institute of Economics and Social Research website: https://www.niesr.ac.uk/blog/inflation-surged-february-across-most-consumer-items-more-come-war-and-sanctions-take-their-effect

Elliott, L. (2022). Blame Covid: Why UK Inflation is at Its Highest for 30 Years. Retrieved March 30, 2022, from The Guardian website: https://www.theguardian.com/business/2022/jan/19/blame-covid-why-uk-inflation-is-at-its-highest-for-30-years

Firmansyah, H. (2021). Policy Model for Muslim State Inflation Control. International Journal of Nusantara Islam, 9(1), 93–105. https://doi.org/10.15575/ijni.v9i1.11984

Fitrah, R., Alhamdi, R., Abd. Majid, M. S., Marliyah, M., & Handayani, R. (2022). The Typology of The Global Financial Crisis and the Solution in Islamic Economic Perspective. Al-Kharaj : Jurnal Ekonomi, Keuangan & Bisnis Syariah, 4(5), 1267–1282. https://doi.org/10.47467/alkharaj.v4i5.921

Guriev, S., & Melnikov, N. (2016). War, Inflation, and Social Capital. The American Economic Review, 106(5), 230–235.

Haldane, A. (2021). Inflation: A Tiger by the Tail. (February), 1–24.

Hamilton, E. J. (1944). War and Inflation in Spain, 1780-1800 Summary. Quarterly Journal of Economics, 59(1), 36–77.

Hamilton, E. J. (1977). The Role of War in Modern Inflation. The Journal of Economic History, 37(1), 13–19. https://doi.org/10.1017/S0022050700096686

Harari, D. (2022). Economic Update: Ukraine Crisis Adds to Inflationary Pressures. Retrieved March 30, 2022, from House of Commons Library website: https://commonslibrary.parliament.uk/economic-update-ukraine-crisis-adds-to-inflationary-pressures/

Harari, D., & Keep, M. (2021). Coronavirus: Economic Impact. In House of Commons Library. London.

Higgs, R. (2006). Depression, War, and Cold War. New York: Oxford University Press.

How Does Covid-19 Affect Economic Activity and Inflation? (2020). Retrieved March 30, 2022, from Bank of England website: https://www.bankofengland.co.uk/bank-overground/2020/how-does-covid-19-affect-economic-activity-and-inflation

Islahi, A. A. (2016). Exploration in medieval arab-islamic economic thought: Some aspects of Al-Asadi’s economics. History of Economic Ideas, 24(2), 27–49. https://doi.org/10.19272/201606102002

Jones, L. (2022). Five Ways the Ukraine War Could Push Up Prices. Retrieved March 30, 2022, from BBC News website: https://www.bbc.com/news/business-60509453

Juanino, P. S., & Millard, S. (2022). What is the Economic Impact of the Russia-Ukraine Conflict? Retrieved March 30, 2022, from National Institute of Economics and Social Research website: https://www.niesr.ac.uk/blog/what-economic-impact-russia-ukraine-conflict

Kia, A. (2014). Inflation: Islamic and conventional economic systems - Evidence from the United States. International Journal of Economic Perspectives, 8(3), 19–40.

Legese Feyisa, H. (2020). The World Economy at COVID-19 Quarantine: Contemporary Review. International Journal of Economics, Finance and Management Sciences, 8(2), 63. https://doi.org/10.11648/j.ijefm.20200802.11

Meierhans, J. (2022). Farmers Warn Ukraine War Will Hit UK Food Prices. Retrieved March 30, 2022, from BBC News website: https://www.bbc.com/news/business-60691116

Milliken, D. (2022). Ukraine Invasion Worsens UK Inflation Trade-off BoE’s Tenreyro. Retrieved March 30, 2022, from Reuters website: https://www.reuters.com/world/uk/ukraine-invasion-boosts-uk-inflation-pressure-boes-tenreyro-2022-03-02/

Milward, A. S. (1977). War, Economy, and Society. Los Angles: University California Press.

Overy, R. J. (2002). War and Economy in The Third Reich. New York: Oxford University Press.

Ozsoy, I. (2016a). An Islamic Suggestion of Solution to the Financial Crises. Procedia Economics and Finance, 38(October 2015), 174–184. https://doi.org/10.1016/S2212-5671(16)30188-5

Payne, C. (2022). Consumer price inflation, UK. Retrieved from Office of National Statistics website: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/september2018

Pettinger, T. (2022). Economic Impact of War. Retrieved March 30, 2022, from Economicshelp website: https://www.economicshelp.org/blog/2180/economics/economic-impact-of-war/

Qiu, W., Rutherford, S., Mao, A., & Chu, C. (2017). The Pandemic and its Impacts. Health, Culture, and Society, 9, 1–11. https://doi.org/10.5195/hcs.2017.221

Raul, D. (2020). Islamic Economy As An Alternative Solution Economy Crysis. International Journal of Science and Society, 2(1), 162–172.

Rockoff, H. (2015). War and Inflation in The United States From The Revolution To The First Iraq War.

Romei, V. (2022). Ukraine War Could Cause A ‘Renewed Downturn’ in the UK, Warn Economists. Retrieved March 30, 2022, from Financial Times website: https://www.ft.com/content/28a13d3d-bfc1-4bc0-8fd6-360c9c797ae6

Samad, T. F. D. (2021). The Role of the Islamic Economic System in Tackling Various Economic Issues. Tasharruf: Journal Economic and Business Of Islam, 1(2), 14–23.

Sandercock, H. (2022). Will Russia-Ukraine War Impact UK Food Prices? Which Products Could See Price Rises and Supply Issues. Retrieved March 30, 2022, from National world website: https://www.nationalworld.com/news/uk/will-russia-ukraine-war-impact-uk-food-prices-which-products-could-see-price-rises-supply-issues-3608373

Shahzad, A., Ahmed, T., & Ur Rehman, K. (2012). Islamic Financial System: a System To Defeat Inflation. Arabian Journal of Business and Management Review, 2(2), 69–72. Retrieved from https://www.arabianjbmr.com/pdfs/KD_VOL_2_2/2.pdf

Shang, Y., Li, H., & Zhang, R. (2021). Effects of Pandemic Outbreak on Economies: Evidence From Business History Context. Frontiers in Public Health, 9(March), 1–12. https://doi.org/10.3389/fpubh.2021.632043

Smith, H.-A. (2022). Ukraine Invasion: Why The Conflict With Russia is Leading to Higher Prices in The UK and What Can Be Done About It. Retrieved March 30, 2022, from sky news website: https://news.sky.com/story/ukraine-invasion-why-the-conflict-with-russia-is-leading-to-higher-prices-in-the-uk-and-what-can-be-done-about-it-12555130

Trading Economics. (2022). United Kingdom Inflation Rate. Retrieved June 6, 2022, from Trading Economics website: http://www.tradingeconomics.com/united-kingdom/inflation-cpi

UK Inflation Up More Than Expected Amid Covid Pandemic Fluctuations. (2021). Retrieved March 30, 2022, from Business Standard website: https://www.business-standard.com/article/international/uk-inflation-up-more-than-expected-amid-covid-pandemic-fluctuations-121061600818_1.html

Victor, V., Karakunnel, J. J., Loganathan, S., & Meyer, D. F. (2021). From a Recession to the COVID-19 Pandemic: Inflation-Unemployment Comparison between the UK and India. Economies, 9(2), 2–19. https://doi.org/10.3390/economies9020073

Zakiyah, K. (2018). Peran Pengendalian Inflasi Dalam Tinjauan Perspektif Al-Qur ’ The Role of Controlling Inflation in the Perspective of Al-Qur ’ an. The International Journal of Applied Business, 2(1), 20–28.




DOI: http://dx.doi.org/10.30984/tjebi.v7i1.1903

Article Metrics

Abstract view : 1903 times
PDF - 864 times

Refbacks

  • There are currently no refbacks.


Tasharruf: Journal Economics and Business of Islam is indexed by:

JURISMA : Jurnal Riset Bisnis & Manajemen
       



       

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

________________________________________________________
Tasharruf: Journal Economics and Bussiness of Islam is published by Fakultas Ekonomi dan Bisnis Islam, Institut Agama Islam Negeri (IAIN) Manado

Jl. Dr. S. H. Sarundajang Kawasan Ring Road I Malendeng Manado, Sulawesi Utara, Indonesia 95128
Email: tasharruf@iain-manado.ac.id

ISSN Print: 2528-0317 ISSN Online: 2528-0325