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.

One of the biggest issues is having an aging population. Because this increases public spending on pensions, benefits (as some people 50+ are genuinely to ill to work) and of course health care.

At the same time we are not supporting our young people enough to enter the workplace. Schools always pushing for 6 form and university, employers wanting 5 years experience and the ability to speak 10 languages while doing summersaults for entry level jobs. That's just so disheartening. No wonder they are looking at benefits alternatives for getting money to survive.

I do think something has to change, but it's not just on an political or economic level its also on an societal level. The current mindset THEM versus US is creating friction that allows politicians to ignore the real issues and carry on lining their own pockets.

The Uk as gone down hill so much our NHS is falling to bits.
Im having all my teeth sorted before they close my dentist or change it to privet.

We have a TV news program in the US called 60 Minutes. Ages ago, they did a story about the disability welfare system in Italy. At that time, something like 30% of the adult population had somehow gotten on disability benefits. They went to a village to interview people about it and found that the village bus driver was collecting benefits for being blind.

Some of the news makes it sound like that's where the UK is headed.

Unless we grow the economy were doomed

Reduce the cost of employing someone.

Make it easier for employers to take people on. Make it easier to get onto benefits if you lose your job. But make it so you get less money if you don't work. There has to be a really good reason to work. It has to pay.

Offer incentives for companies to be successful.

Make energy cheaper.

Within half a mile of my house a private company is making tonnes of money from turning gas into electricity. It only does this because they can make shit loads of money.

Yes I saw that comment about defence and thought bollocks. Europe has been relying to the USA to defend it for years and has cut its defences to the bone.
The UK is a sitting duck if anyone attacks us and Trump decides not to honour the NATO contract.
Plus investing in defence would create jobs for our young.
The UK has been resting on it's laurels for quite some time.

The other problem in the UK is that we have far too many piss takers. We need to get a lot tougher on things like disability benefits. Even compared to countries like the US (where the population is fatter and unhealthier), the number of people on disability benefits in the UK is through the roof

This. Amazed at the people wanting to up everyone’s tax but not touch a wealth tax.

Your right. We can keep going in a downward spiral for longer. Inflation will keep going up especially with food and fuel. Growth will keep stalling and we will keep borrowing. The rates to borrow will keep increasing. As everything gets more expensive the government will try and pacify everyone with cost of living help which will increase govt spending. Thus borrowing goes up more and the rate to borrow goes up again.

Anyone who has ever taken out a payday loan should have a cold shiver going down them right now.

Also if we try printing money and devalue our currency all our imports will get more expensive. Given we import so much of our food and energy that would be a disaster.

If Reform get in it will be a knock on cert we will go bankrupt.

Wealth taxes don't work very well and are difficult to administer. They also don't raise much money, compared to the budget gaps people want to fill. Most countries that have tried them have abandoned them. From The Economist:

Don’t tax wealth - Even the most sophisticated arguments in favour of doing so make no sense

Our current economy is nothing like that of 1976. Nor are our politics, taxation or industrial relations.

I think alot of the general public don't understand what the bond markets are or how they work. Also lots of politicians don't seem to understand either.
Andy B said the bond markets will just have to get in line. Aye will they Andy. Well this weekend traders have started selling them off on the news that you might be PM.

He's a good looking man but sounds worse than Keir for the economy.

My understanding is that when our bonds fall due for repayment we just reborrow the same amount to roll them over. However presumably we will now be rolling them over at much increased interest rates to when they got taken out originally.

We can only ignore the bond markets if we don't need to borrow from them or have any debt with them. Otherwise ignore them at your peril.

I don't think they will get rid of the state pension but I think they will phase it out through erosion. For example tax allowances are frozen and as pensions go up each year pensioners will soon be paying tax on them even if that is all they have.

The frozen tax allowances are a stealth tax which will erode the state pension with no one noticing.

I think they will keep putting the retirement age up every 5 years or so until people don't get till 75 or something.

I suppose if they leave the NHS as it is more and more people will die younger as they don't get operations they need etc.

Alternatively if they make it private then people will die when they can't afford the bills.

Earlier deaths means less state pensions.

Only those with enough money to pay for their own healthcare will live longer.

I suppose that's a 'strategy' of sorts. Stealth deaths by lack of healthcare.

Exactly, I fully agree. We need to stop linking all sorts of advantages to benefits. Bottom line is that nobody should be better off on benefits than in work, and yes that included the aforementioned advantages.

This.

It's demographics not benefits as such.

The ageing population is not compatible with the Blairite movement to send all 18-21 year olds to university so that 90% of them can be in debt for a degree they never actually use, and clerical office jobs which used to require O level English and maths now "require" a bachelor's degree (even though obviously they don't really).

Blair only pushed for all the young adults to go to university to reduce unemployment figures ironically - now it means there's nobody qualified for skilled trades and surplus unemployable graduates who expect to be earning above average and have better conditions in the form of WFH etc. because they (like everyone else) have a degree...

Agree with this. In real terms, our defence spending is the equivalent of about 14 willing chaps. Armed with catapults. Practically, we are absolutely open to invasion or intrusion by a foreign power.
Our military has lots of fantastic people but they are trying to fight off a tsunami with a hand whisk. It’s a disgrace.

👏🏻👏🏻👏🏻

How do we make energy cheaper. We import most of it don't we? I mean the government can give us cost of living allowances against it but that does not make it cheaper for the country. The cost is just passed to the government who will pass it back to the taxpayer (or borrow more)

Childcare is only for a few years though, especially now with the funded hours. I do agree that state childcare like in France would help.

actually a move to the right would be seen as favourable by the bond markets who would anticipate reduced spending (resulting in cheaper costs to borrow hopefully)

Then if they do what they say and cut welfare etc then that would be a start.

So no reform getting in is not the worst thing that could happen. A move to the left politically will kill the country.

You just made that up.

Pontificating confidently, anonymously and without evidence, doesn't make what you say true.

Agree they are a short term solution at best and drive our high net worth individuals out of the country. The individuals are probably paying huge amounts of income tax etc

what? Of course I didn't make that up. It's basic economics.

Left leaning governments spend more which we can't afford. With the latest political chaos the markets have already increased our rates to borrow as they are anticipating someone more left leaning than Keir getting in next.

Right leaning governments like reform are promising to slash welfare etc. The markets will look favourably on a government making sensible financial decisions to return us to financial viability.

Bond markets care about whether the UK is safe to invest in ie do we have a government who can return us to financial stability/growth. They don't give two hoots if people are dying in the street because their welfare has been cut.

Please google this if you don't believe me.

Stop liking electricity prices to wholesale gas prices for starters.

We need more incentives for households and industries to produce some of their own electricity by having solar panels and wind turbines to charge their own batteries.

And reduce the ridiculously high standing charges which were introduced in order to offset the increase in solar panels (= reduction in income for electricity companies.)