Is bankruptcy inevitable now for the UK

[BringOnTheHandyMan]

In the most layman of terms the UK is actually broke.

Every month we cannot pay the interest on our outstanding debt and thus have to borrow more. (Note this is not repaying the capital, just the interest)

The rate we pay to borrow used to be quite low and that is not the case anymore.
The bond markets have lost faith in the UK and charge us a rate that reflects it.

We have systems we can no longer afford (welfare, NHS etc)
We have little to no growth
We have inflation issues (so printing money is out)
Raising or cutting interest rates is problematic due to having both growth and inflation issues together
Our politicians are scrapping like rats in a barrel and even prior to that they seem incapable of making hard decisions or even facing up to the mess we are in.

We do actually need a PM that stands up and says okay folks we are in deep shit. We are broke. Actually worse than that. In debt and unable to pay even the interest.
So any borrowing we do must be for investing/growing the economy only. All spare money must be used for paying down debt or investing/growing the economy. That means for the foreseeable future all state funding is scrapped. We would enter a period of being very much a 'poor country' and acting like it. If we worked really hard we might be able to turn it around but it would take years, hard decisions and many, many sacrifices.

Since I can't see any party being able to actually do that. Then I honestly don't see how we can go anywhere except an IMF bailout. Then they will play the tough guys and cut the lot anyway.

I try to plan for my retirement but honestly it's sort of impossible.

For those with public sector pensions I wouldn't be sure you will get it paid
For those with private defined contribution pensions, the stock market is vastly overpriced just now and your pension is likely to fall once the AI bubble bursts.
State pension - yip not convinced we'll be getting that
Costs to be budgeted for - healthcare but how much?
Downsize my house - perhaps but will house prices tumble making this impossible.

Does anyone think that any government (regardless of party) can fix the country. If not what happens. The UK used to have no NHS or welfare so do we just go back to that. How long will it be until the wheels come off?

Lots of threads about which benefits should be cut etc but nobody seems to be shouting that actually it ALL needs to be cut regardless of what hardship it causes.

What the US has, that we don't, is the dollar. They can carry on racking up enormous debts (Trump has added $2.25Tn in his first year back) and get away with it - because frankly, where else are you going to go? US treasury bills are the investment of last resort and the US can and will keep printing them forever.

We don't have that luxury.

All of todays pensioners?

You know its not as simple as that.

These are the standard set of areas to cut presented to Chancellors of the UK. The social consequences will be grim. That does not mean they cannot be done or they do not get presented to politicians as ways to resolve public spending going up. Reeves tried a very small one in the winter fuel allowance. That enraged people. She tried again on disability benefits. Again, rejected.

@NorthXNorthWest proves the point that I and other posters have been saying, that much of the electorate don’t want to acknowledge the truth.

The vast majority of today’s pensioners have taken out more than they paid in because of changing demographics when they were young and the fact they are living longer. Its just a fact. Does that mean every pensioner is rich? No Does that mean some pensioners aren’t in poverty? No.

An ageing population is expensive and not productive. Again just a fact

I have no desire to talk down the UK but I do have a desire to force people to do something about the current situation. As has been said already yes technically we can print more money and thus not go bankrupt but can you imagine it. Inflation would skyrocket (and it is already going up and up and wait till the effect of the Iran war filters through). Our currency would be devalued if we print money and then our imports would become more expensive. Given how much we import that would be a disaster. We are already particularly vunerable given how much of our food and energy we import.

What do think will happen when these borrowings prior to Truss fall due for repayment. They either have to be repaid (falls about laughing) or refinanced at current rates which are much higher than they were historically. Thus our interest bill is going up and up.

Tax is supposed to pay for a heck of alot more than welfare. What about defence, policing, education, health for starters. Or how about repaying some of our debt. Right now far too much of the incomings are going on welfare.

We need to do alot more than just cutting spending. We need growth and investment and a complete change in people's attitudes and entitlements.

I've just done my waitrose shop for the month (I do 1 shop in waitrose and the rest in Tesco). I really noticed a jump in prices. Lamb steaks now £12 for two. Ribeye steak £14. I feel like it has jumped up alot even from last month. Now that is quite frightening really and inflation is going to go up more once the lack of fertiliser etc starts to impact prices.

proves the point that I and other posters have been saying, that much of the electorate don’t want to acknowledge the truth.

Just so it is crystal clear to me. What is the "truth" and the solution for the "truth"?

She had direction and was able to make tough decisions and stick to them. She wanted everyone to own the roof over their head (and then take responsiblity for themselves). That was a pretty good idea really.
The housing crisis was caused by the Tony Blair govt who opened us up to mass immigration. It was made worse by allowing people to get their pensions at 55 as lots withdrew them and bought BTL's instead. This pushed up prices as FTB were competing with cash buyers. None of this was anything to do with Maggie T. When she was voted out we had low house prices and lots of people had just benefited from getting their house practically free.

She took industries that were being run badly and at considerable cost to the taxpayer and tried to make them more efficient by privatising them.

Do I think she had all the answers. No of course not. She had balls though and was intelligent, strong and had a plan for the country. If I could clone her and bring her back I would.

@NorthXNorthWest there are 10
pages on this thread, read them back and you should get the jist.

Social consequences have economic consequences. Pure naiveity to think that 'welfare' cuts can just happen, people will just crawl away and what - give up? In reality they will end up in A&Es, police custody, social services, being ill, starving, hypothermic, desperate.

I don’t think anyone imagines that there would be no consequences. But this thread is partly about the IMF being called in. If they were, they would cut or implement some of the above. The social costs would be accepted. Does this mean no one suffers? No. People would suffer.

That's interesting but it still shows the UK has 5% more working-age people in work despite it apparently being so much easier to claim disability benefits here. That's not an insignificant figure and doesn't suggest cutting disability benefits will make an enormous difference.

And is 120% really not that much different than 101% of GDP? Although I do understand that yes, the US economy is obviously much larger. It's undoubtedly better to have the option to borrow more but a lot of Americans seem very against that too, maybe for good reason.

Regardless of all these stats, poverty in the US is horrific and you do find yourself wondering, if this is the cost of a supposedly healthier economy and higher growth is it one worth paying? Yes, the average person earns more but the people at the bottom are living in absolute destitution - there are enormous tent cities in affluent parts of the country with others being forced to live out of their cars and vans (the film Nomadland with Frances McDormand is eye opening - fiction but apparently based on the true experiences of many US citizens). We are starting to see the same here although not yet to the same degree. While a few get obscenely rich by exploiting those at the bottom who are forced to work for less than 50% of the UK minimum wage (some on this thread are advocating for this or something like it).

We shouldn't keep cutting and cutting welfare until we too have tent cities and van communities. We surely DO NOT want to end up like the US. Welfare has been cut enough - the bill is getting bigger because more people are facing destitution and financial hardship and the health problems that come with that. Not because people just can't be bothered to work.

so what?

workers who don't receive government top ups, even if they don't work full time.
Working age people can change their circumstances, elderly people mostly can't.

Welfare has been cut enough - the bill is getting bigger because more people are facing destitution and financial hardship and the health problems that come with that. Not because people just can't be bothered to work.

You are so wrong.

Please read the OP on this thread, you might revisit your views.

To drop my hours to 22.5 even though I’m a single parent? | Mumsnet

This doesn't convince me of anything at all other than that some of the rules around working have been poorly designed. There are huge numbers of elderly and disabled people living in poverty already - some in absolute poverty. If we can design a better system that doesn't reward people who are willing and able to work more for working less then we should but the savings from that should go to the people living on vastly less than minimum wage, of which there are many.

Sadly as a direct result of IDS terrible Welfare reforms and the failure of the Tories to get a grip on benefits following Covid.

Another "inheritance" Labour will have to deal with.

For example, the IMF suggested today that the UK’s state pension only be uprated on one criteria, cost of living. To me, this seems fair. I would like Reeves to do it.

Working age people can change their circumstances, elderly people mostly can't

They can’t do much about wage stagnation, housing costs & the fact company pension schemes are less generous.

It’s a thread about productivity & growth…

It’s a no brainer but all parties are too scared.

Just reread the OP and it's all about cuts and that the IMF would come in and make them if we don't. But when the IMF handled the Greek bailout, I would point out that they made huge cuts at the same time as raising taxes significantly on both the wealthiest and those on low incomes. The economy contracted of course but maybe we need to go through a contraction first with most people paying more or receiving less before any sort of growth is possible?

To be honest she absolutely should do it. The point being made about politicians of all kinds being gutless is true. You would get another party claiming they would reverse it if they got in. They would not reverse it.

Well this is also true. The UK tax system needs reform (small r). Even more unpalatable is that lower earners need to pay more tax. No one talks about that in the UK.

It's not that the political parties are too scared it's that no political party would ever get elected with a policy of removing or even changing the triple lock.

re read IMF report. There is no room for tax increases anymore.

Welfare needs to be cut. PIP criteria must be revised substantially and funds need to be redirected into treatment. This is from IMF report as well.

UC payment have to be made time limited.

Longer term low earners need to pay more, but to turn the situation around personal allowance needs to be raised so people who work get more, who don't - well, tough. Short term some will suffer, longer terms this will reset the economy and allow those who really need support to be supported better and majority of population living better.

Well yes, they are scared of being unelectable

Even more unpalatable is that lower earners need to pay more tax. No one talks about that in the UK.

The problem with that though is much of that lower income is taken up by housing costs.