Labour needing help from IMF according to economists

[CarCostingMe]

Labour may need help from the IMF, economists warn

Headlines like this seem to be popping up more and more. Is there anyone out there who still thinks that benefits don't need to be cut or is everyone now pretty accepting of the fact that big change is coming whether we like it or not.
All welfare benefits need to be cut (inc the triple lock) and the NHS needs made into an insurance based system too.

I have to admit I have started to make loose plans of how I will cope. I'm not on any benefits but I'm due to get my state pension in about 15years and it's fully paid up already. I hope I will still be getting it but am thinking it might be deliberately frozen and eroded in the future so worth less than it currently is.

I am actually ok (ish) with an insurance based health system as this one is not working now and I am fed up with the stress of trying to navigate it/wait for things.
It's not that I want to pay for healthcare but vast parts of it just don't work anymore.

For everyone else (assuming no-one is burying their heads in the sand still) how will you manage. Any tips gratefully received as I have no family to fall back on.

For now my plans are sell house and live in flat to release equity or stay in house and take out equity release (no kids to leave an inheritance to).

If this is not enough have a lodger as well (I will buy a 2 bed flat min). Not ideal but if needs must.
I have private pensions so they will be getting spent carefully and I have to admit I have already started to be very careful with my spending as I feel change is imminent.

I watched an interesting but depressing podcast about how the rest of the world was watching the UK as an example of what not to do (ie we used to be a great nation and now we are paying more to borrow on the bond market than Greece who the IMF bailed out in 2010.

You're right. It's just for the clicks. The UK is doing brillantly. See you on the other side.

Labour prefer to deny any problems.

The same Telegraph which encouraged its readers to vote for Brexit which has put this country into decline ever since and cost us 1.8 million jobs.
I'm sure Clavinova will be along in a minute to tell us what a great success Brexit has been and how companies investing in the EU instead of the UK is benefitting us all 🙄

You are arguing that people shouldn’t be distracted by headlines, but so far have only kept returning to the surface issue yourself, ie who is reporting this.

So, lead the way: what are your preferred indicators of the sustainability of public finances? Do they give you cause for comfort or concern? Those who worry tend to point to borrowing rate and trend vs other advanced economies, interest cost as share of public spending, and trends in both demographics and welfare spending. To what extent do you share those concerns, or do you think they are misguided and if so why?

Well, Starmer and Burnham are both promising a de facto re-run, so you might get an opportunity to ‘right’ that ‘wrong’.

Meanwhile, the FT was very much pro-Labour in to the 2024 GE. Less so, now.
Natch.

Ok. So, same questions to you that I posed to TopPocket. What’s wrong with OP’s analysis?

(I’m a remainer and Guardian reader by the way, so it’s safe to engage with me).

Always. It’s never happier than when provoking outrage in its readers.

It’ll be interesting to see if anyone answers rather than fixation on which paper.

Economists are quoted but Labour prefer not to listen to them either.

So what are the weaknesses of their analysis? What indicators give you comfort? Are their any areas of concern you agree with or policies you would adjust to improve the sustainability of the public finances?

So what? It happened in the 70s. We're still here.

Other side of what?

I don't know what the view of the telegraph was on brexit - but that was just an opinion surely. The country was pretty divided on brexit if I recall.

The IMF has given numerous warnings on the state of the UK, as has the bond markets and the head of BOE. Surely you can tell the difference?

You can say that about anything short of a civilization-erasing catastrophe. It’s not a reassuring bar!

A bail out is very bad news democratically. Basically the govt loses the power to set domestic economic policy if it wants to accept the funding.

It would also collapse the pound and lead to a big increase in import costs, with impact on cost of living. We are also significantly more import-dependent than we were in the 1970s so the pain would be greater like-for-like.

And this is half the trouble. Nobody in 'charge' seems to have any clear direction for the country. First we are leaving the EU, then we better run back to it. This is what is worrying the financial markets - weak governments who keep changing their mind, who keep showing a lack of strength and direction and no clear plan. Who keep spending more than they have and borrowing regardless of the future.

We have political instability - with AB shooting his shot and KS declaring he isn't moving. Meanwhile Rome burns. Oh and lets not forget the massive vote reform got recently which would suggest unrest.

Good to know the views of the FT as I don't read that although I can't imagine anyone still supporting this labour government. Thanks for posting.

Well we were all pretty poor for starters with a much lower standard of living. And to be fair that is what we will return to.

The UK was actually still quite a 'big player' on the world stage back in the seventies. We still had assets we could sell to give us cash. We were about to discover north sea oil which would bring in a massive boost to the economy (1975). Despite this we had to go cap in hand to the IMF.

This time round world order is/has shifted. China is now competing with the USA to be top dog. The UK is largely irrelevant on the world stage. We have nothing left to sell and a crumbling NHS. We are in end stage capitalism and we don't have MT incoming to make tough decisions and try and turn things around.

People are also far more entitled now than they were in the seventies and less resilient it would seem.

I don't think this is going to be like the seventies. I think it will be worse, much longer lasting and the impact will be greater. For those of us who lived through the miners strikes, 3 day week, winter of discontent, power blackouts, one bath a week, no central heating, very basic food, well we are hopefully better prepared.

This isn't a temporary thing. The UK has been in decline for a long time and the chickens are just coming home to roost now.

Actually this might be the best reply on the whole thread. Really highlights what is wrong with the UK.

IMF bailout - so what? Who cares.

Unfortunately it’s a shit show of the highest order.
Unless the government can get hold of its spending, realise wanting and needing are different things, then we will continue to sink,

I doubt anyone who reads the telegraph is outraged. They will be well aware of what is going on. As well anyone else who reads/watches current affairs or economic podcasts.

It's a good theory (the telegraph just causing trouble). What about the IMF (those bastards) and the bond markets (those lying shits) and the head of BOE (rich wanker). I take it they are all just trying to wind people up as well. In the bin, the lot of them.

Actually I'm thinking this should be Labours new byline.

Vote Labour - IMF bailout. Who cares!

It has becoming quite embarrassing hasn't it.
I honestly don't see any government who is going to be strong enough to turn things around so it's just a case of waiting till it goes boom, then IMF. Oh well.

Well, Labour will be out for 14 years+++ after this….

IMF warnings as noted are nothing new.

The IMF loan in the 1970s wasn't actually necessary, incidentally. And at a time of 20% or so inflation.

I recognise the state of the public finances, however not as some would portray it.

Why is the debt ratio so high, would you say?

And what should the government do to address it?

So is your opinion that the UK is fine then and nobody should be worrying about it? why do you think this?

I agree inflation was higher in the seventies but I'm pretty sure inflation is about to shoot up once the lack of fertiliser feeds through to food costs this winter and aren't we expecting fuel costs to go up. I don't know what inflation we will hit as the BOE have a bit of a issue at the moment as they having poor growth plus inflation thus they don't know which way to move interest rates. The markets are predicting increases this year but I guess we will have to wait and see.

Would be interested to hear why you are not worried as it gives a more rounded discussion.

Has the UK ever had warnings from the Bond Markets before?

Inequality in this country means a lot of people pay very little income tax because of low incomes.
Covid mismanagement cost the UK a lot more than a competent government would have cost- shorter periods of economic restrictions so less furlough, no dodgy PPE deals or ineffective test and trace.
Brexit also a contributor.

The main thing I would start with is reformed business taxes, so that large companies actually pay something.
I'd also have those of pensionable age on higher incomes pay a level of National Insurance.
Triple lock replaced by a double lock- CPI with a minimum level only.