Uk totally messed up - is anything good?

No

not a single one of the many analysis has noted that as a likely outcome.

If you dismiss analysts on R4 a quick Google show headlines on same front from yesterday

Rise in UK borrowing costs could push Reeves to new public spending cuts
Analysts say costs hitting highest level since 1998 risk wiping out almost all of chancellor’s £10bn buffer

Richard Partington and Heather Stewart
Tue 7 Jan 2025 19.31 GMT
Share

Rachel Reeves could be forced to make fresh cuts to public spending at her March “spring forecast” as a rise in government borrowing costs risks the chancellor breaking her own fiscal rules.

The Independent
Reeves may need to cut spending after jump in borrowing costs, say economists
The yield on government bonds jumped to its highest level since 2008 as the pound also tumbled in value.

*Economics
Tax & Spend
Reeves Eyes Spending Cuts If UK Bond Slump Eats Up Headroom
Chancellor to reaffirm her fiscal rules in speech this month
Treasury under fresh pressure from soaring borrowing costs

The claim no one has said this isn’t correct, more than a single one has said it, a fair few have and it’s been picked up by the press.

It's a combination of 2008, Brexit and Covid.

On 2008 to be fair it was a crisis created by Governments, Companies and individuals (mortgages) simply taking on too much debt.

This of course helped the economy boom from the late 1990s to 2008 but every party comes with a hangover.

There were politicians such as Vince Cable who accurately warned of the dangers but no one likes a party pooper when the party is in full swing.

@EasternStandard

Comparison of U.k. 10yr Gilt yields & US 10 yr treasuries . Notice they are following almost identical trajectories.

@EasternStandard

“That certainty seems at odds with analysis today. Listen to R4 from about 7.20am on playback”

A radio 4 piece on the Today show is not analysis. It’s a news report. And i heard it, that was referencing the increase in Gilt yields. Which is largely to do with US treasury yields also reaching ~5% (because the markets are anticipating Trumps tariffs, and higher inflation in USA). This impacts bond yields across the globe because they are all chasing the same money.

As there wasn’t a great deal of headroom in the spending figures announced in the budget for the Gov to meet fiscal rules (£9.9bn), and because we have such a huge amount of debt, any increase in gilt yields has a big impact on whether fiscal rules are met or broken.

Because of the astronomically large debt the tories left (and high deficit), a 1% increase in gilt yields costs the Gov an extra £12bn per year in interest payments. So if yields stay as they are (not guaranteed), and spending stays the same, then likely the gov will break their fiscal rules purely because they’ll be spending £2bn more in debt interest than they have allocated as contingency.

That’s not the same as saying that the tax raised will be lower than expected.

forecast tax take hasn’t changed since the initial analysis by OBR, BoE & IMF back in October.

I don't know where you're from, but I wish we had a system like this. It's ridiculous for some youngsters to stay at school for years. I have provocatively said in the past that we should go back to a school-leaving age of 14, as long as the leaver goes to a job, and let the government provide money to the employer for giving relevant teaching for a while. If someone shouts at me that we are already doing things like this in the UK, I'll say, "Good, I hadn't realised."

I don't think it's just the pandemic. There was such a huge deal made about Brexit and getting out the EU that to a lot of people (and a majority of the vote of many millions was to do so) it promised a better future. They were sold a lie (we actually left the EU in 2020).

And western economies haven't recovered from 2008 crash and are still sticking with a bust financial model that doesn't work for most of its citizens. The birth rate has plummeted and the ponzi scheme of importing millions of foreigners every year is starting to finally coming back to bite the western leaders and a backlash to it.

And it won’t reduce public funds, not a single one of the many analysis has noted that as a likely outcome.

That certainty seems at odds with analysis today. Listen to R4 from about 7.20am on playback

Plus look at contraction of private sector since budget

I've got some friends in a band. Most of their sales are in Europe. They've had to ship their merchandise operation to Germany because it's not worth sending CDs from the UK any more because of the (Brexit) customs charges.
We're talking maybe a few thousand CDs by the way. They're not Coldplay.

The country never recovered from the 2008 crash. The current shitshow is the result of years of stagnation and bad management.

I don't understand why Brexit voters don't seem to mind that it was all lies. My mum and dad still live Johnson and Farage when all Johnson and Farage have ever done is lie to them.

I can't remember a time when life in this country was worse than it is now and the billions that Brexit costs us every month could be paying to fill potholes and rebuild the RAAC schools and hospitals that have needed doing for the last 14 years (Plus fixing all the other stuff that's now broken down and neglected.)

The country needs money and Brexit does nothing except cost us huge amounts of money. Forever.

Whatever people wanted from Brexit Brexit actually makes worse.

If you wanted to reduce immigration then Brexit has increased it to previously unheard of record breaking levels.

If you wanted to slash red tape then Brexit has increased it to the extent that famously Businesses are having to hire facilities to store it.

If you wanted to get away from EU rules then soz, but obviously most companies aren't going to make special products for the U.K. market so mostly the only change is that many multi-nationals now have their European HQs in the EU instead of the UK, we now have to bribe car and steel companies with £ billions of taxpayers money to stay here, we pay more for our energy and water than almost anyone, we have bee-killing cancer-causing pesticides, shit in our rivers, and lower food standards. Well done.

Surely sanity has to prevail at some point?

Well said Kosenrufugirl. The Brexit lies such as an “oven ready” deal and his insistence that Europe will be lining up to buy our cars etc did nothing to encourage a deal likely to cause the least harm to our economy.

@ChillWith

ZebraD
I think most people know but weirdly just accept it.

"Yes, since the pandemic people are quite apathetic"

Actually that is scarily accurate- since the pandemic there is a sense of not really giving a shit that wasn't there before.

Yes, since the pandemic people are quite apathetic

@Ac380 interesting point about the bricklayers.

Where I’m from, the education system includes vocational schools specifically designed for students who are less academically inclined and unlikely to pursue A-levels or university. These schools are free for students aged 16-18 and offer a blend of traditional academics with hands-on vocational training. Depending on the subject some are two years some three.

At the end of the program, students graduate with a trade qualification, making them job-ready. The structure is quite balanced—alongside regular subjects, students attend vocational lessons twice a week: one day focused on classroom-based learning and the second on practical, hands-on training. The options are diverse, ranging from mechanics and bricklaying to hairdressing, cooking, and more. It’s been a while since I moved to UK, but I believe even more trades are available now.

This type of system is incredibly beneficial. It provides a clear pathway for those who aren’t pursuing higher education, ensuring they don’t leave school without valuable skills. By equipping students with a trade, it would not only make them more employable but also boost their confidence and career prospects, offering them real opportunities to succeed in fields they’re passionate about. It’s a practical, forward-thinking approach that bridges the gap between education and employment.

@EasternStandard
”
Pushing for higher tax isn’t cost free either. You can see it impact the private sector already, which will reduce public funds.“

No one ever said it is cost free. And it won’t reduce public funds, not a single one of the many analysis has noted that as a likely outcome.

But doing nothing is also not cost free. All the broken waste water treatments plants, all the crumbling schools with RAAC, the fact not a single new reservoir has been built, anywhere, for 35 years, despite population increasing over 10 million in that time, the crumbling hospitals. That is all a result of trying to keep costs down and ‘taxes low’.

And it didn’t work! We didn’t see increased investment by private sector (the opposite), we didn’t see increased GDP per capita (it fell), we haven’t seen improvements to productivity (it’s falling), we haven’t seen increased wages and ‘a high wage economy’ (we’ve fewer apprenticeships and need immigration to provide skills) and we’ve got 10 million economically inactive. continuing with the status quo isn’t an option unless you accept managed decline.

As a business owner myself, i know the burden that has been added, but reality is and despite the screaming, it’s a relatively small addition to costs in the grand scheme of things. Big retail are shouting, but that’s because they rely on dirt cheap labour and it’s now not quite as cheap as it was. I’m sure they will pass it on, but if it means that kids can go to school without threat of a ceiling caving in, nurses can work without breathing in asbestos, or if a 13yr old can get a referral for an “urgent” spinal condition in less than 40 weeks (this is the estimate my 13yr old has been told today BTW), isn’t that a price worth paying?

We probably have to wait until the ridiculously overpaying contracts the Tories created for things like asylum hotels and children's homes to run out before the country has any money again.

It's ridiculous that Tory mates are becoming multi-millionaires off our taxes by charging astronomical sums for basic services.

£9k per week for the care of a single child is daylight robbery.

Pushing for higher tax isn’t cost free either. You can see it impact the private sector already, which will reduce public funds.

@beguilingeyes "And where is all the money going to come from to pay all of these huge salaries, plus training etc?
People scream blue murder at the merest whiff of having to pay more tax."

That's the point, we all have to pay more tax, at least for a short period while the mess is sorted out. And not just the 'high earners' either. Tories increased taxes on high earners a lot over the past 14 years and cut it for the lower earners. Odd because they normally do the opposite. But we either carry on with the decline, or accept that we ALL need to pay a bit more.

That won't happen though, as @1dayatatime quoted, no one votes for higher taxes. All it needs is for a charlatan to come along and say it's all fine and we can cut taxes for everyone, have public services like Denmark & Sweden and we can give everyone a free Unicorn too.

So, the decline will continue, to the point where now the only way the last Government could get a bit of growth was to import more people by making immigration very easy and very cheap. Import millions of people, earning very low wages which gives a short term lift in total GDP, but ultimately, we all get poorer as the small amount of extra tax brought in doesn't cover the costs of the extra strain on public services.

UK is fucked for the foreseeable future basically!

And where is all the money going to come from to pay all of these huge salaries, plus training etc?
People scream blue murder at the merest whiff of having to pay more tax.

The only thing that I've found that works as it should is our local recycling centre which is well organised and runs like clockwork. Everything else public service wise is fucked tbh.

You lost me at pointing the finger at the current government - the tories ran this country into the ground for 14 years ffs

The quote is interesting. It is only just now that I have remembered that I once encountered something called 'Hegel's Dialectic', iirc, so I'm away to look it up.

@Ac380

"It makes no sense."

What particularly upsets me is that those in favour of legal migration are effectively writing off 9 million economically inactive as unemployable.

You are absolutely right though- it is economically insane to pay 9 million people benefits and at the same time import over 10 million people into the UK since 2010 (900k in 2023 alone) to do the unfilled jobs.

I can promise that if the Government started paying nurses decent salaries and care homes paid decent salaries then they would have no trouble at all recruiting UK nationals to do these jobs

we see that now. Tories made unemployment benefit lower than sickness benefit…. What happened?

People moved over to signing on sick.

Thats easily fixed with the right political will though. Just limit what sickness and disabilities are entitled to sick benefit and remove the cliff edge for when people return to work.

Also invest in training and improving opportunities for people already here. Business relies too much on cheap immigration because “we don’t have the skills”… But we have 10 million economically inactive people…

And how has the country got to a situation where we don’t train people the skills we need? Some of the entrance requirements for basic trades like brick laying for example are ludicrous (why does a 16 year old need a grade 3 in English, science and maths to be a bricklayer)?

I can guarantee that the Indians, Pakistanis and Vietnamese that are getting visas won’t have a grade 3 in English.

It makes no sense.