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.

I think this is the problem. It's a perfect storm of issues all coming together.
Low growth, high debt, high interest on bond markets, rising inflation, rising unemployment, shaky wealth built on house prices.
Then we have to factor in the AI bubble, changing world order and end stage capitalism for the west.

Thank you.

Notably, you did not address the Giant Welfare Squid. Do you accept that this needs reform?

Yes - and I would argue - the worse possible government to handle it. They have proven themselves to be positively anti-growth, and economic imbeciles.

There’s a good reason the bond markets refer to the ‘moron premium’…

She didn't 'dodge tax'. She referred herself because she was getting conflicting advice and needed a definitive answer. ( The answer is, btw, she doesn't owe any tax I believe. )

She has a severely disabled son, born very prematurely and blind. She wanted to put her house In trust for him so he would always have a home. Rather than sympathising, to attack her for this tragic situation is disgusting. She and her ex share the care I believe.

People often complain that politicians have no knowledge of how 'ordinary' people live. Well she had a baby at 16, lived with an illiterate mother I think, worked in Care and took professional training at Stockport College, joined a Union, recruited other carers and gained pay rises etc and huge respect in that field.

How many of us could have done as much!

These stories remind me of the ones about the rapture that pop up every so often,with a bunch of very unfashionable (but easily led) folks selling all their wordly goods before the end of the world.

When I first joined MN I wanted the username ChickenLittle, but it was taken. You snooze you lose I guess.

She referred herself once the DT blew open the story.

She was then forced to step down and gave a statement which sought to abdicate responsibility.

This is just part of the reason why she has ruled herself out of the running to replace Starmer.

Which large companies do you mean? CT isn’t particularly low here.

She hasn’t ruled herself out.

https://www.itv.com/news/2026-05-14/will-rayner-take-the-chance-to-seize-labour-leadership-shes-not-ruling-it-out

The problem we have in this country is the selling off of vital industries to ( often ) foreign companies who care less about service but just want to exploit us for as much as they can squeeze us for. I think the CEO of Southern Water eg paid himself £1.4 million this last year but that's OK because he can just polute the shores of the Isle of Wight instead of solving the problem.

To pretend that criminals like him should be allowed to get away with this is ridiculous. He should be fined and behind bars and Water etc nationalised. Without compensation btw as they have left us with services that don't function. Imagine what could have been done if the likes of him and other share holders had not been pocketing £millions.

We need to tax people fairly ie tax dividends etc in the same way we tax income. Not allowing the rich to off shore their gains. BTW a recent poll of our billionaires revealed that 75% of them WANT to pay more tax. Far from fleeing these shore they want to stay and PAY THEIR WAY. Instead we are raising taxes from the poorest. You know the 50% of the population who have had on average in recent years, suffered a pay rise of 0.3% pa the lowest annual income rise in 200 years plus forced zero hours contracts, being sacked with no notice and offered reemployment on lower pay. Whereas the richest 50 families alone have the same wealth as the poorest 50% of our population.in the UK.

We should not be subsidising company owners who are paying poverty wages by topping up with Universal Credit. If the companies cannot pay decent wages they are not viable. it is a self defeating policy to pay poverty wages because there comes a time , NOW, when you are paying so little pay that people cannot afford to buy what you are making. More greed by profiteers ends up with them unable to sell their goods.

We need to build Council Houses with affordable rents and then we can invest in more as time goes on. I'm sure we can all come up with very valid idea to improve our country.

It is very worrying. I read this morning that national debt is £50k per person. How can the country continue like this? In 2012 it was £22k per person.

On that premise, I haven’t ruled myself out, either.

Her chequered background aside, she lacks the core competence to be PM (Burnham, too for that matter).

She remains a gift to the opposition.

Yet unemployment is rising, following increases in minimum wage (over 10% in two years) and increased employer taxes. Surely productivity needs to improve? If not then employers stop recruiting, which is what is happening.

The HS2 is a complete and utter waste of money. Potentially costing 100 billion quid so you can save 27 minutes when going from London to Birmingham. Just a terrible, terrible waste of money, I don't understand what they were thinking.

We have a 'fiat' currency.Ie we can print our own money and offer it to other countries or indeed people who live here, as gilts, loans on which we pay interest at maturity, say 10, 20, 30 years hence.( A bit more complicated because if the capital value goes down the interest goes up and vice versa.)

If we lend out at eg 5% but invest wisely in our industries, our Water, Electricity. etc we should be fine as we will make more than that by investing in our country. Plenty of Foreigners want to buy our debts because we are trustworthy. In 1945 we had enormous debts to the US but we managed to found the NHS, reform the Legal system, build council houses etc etc.

What we need is political will to make the life of most people here better rather than worse by handing over our industries to people who care less.

I don’t think you’re stupid. I’m a farmer and I think food prices are going to rocket. I’m not sure we know what’s coming.

I read the actual article in the Telegraph today. One main point that Rogoff was making was that when a massive budget adjustment is needed the IMF will be called. Not necessarily because it’s needed but so the politicians can blame someone.

Quite.
The government could start looking at elderly social care, care homes etc.
Private Equity and other private companies are extracting obscene amounts of money.

Yes I think they will use the IMF to hide behind so they can say big, nasty IMF made us cut your benefits and take away your NHS. Probably for the best then since none of our so called leaders seem to have enough strength to do it.
Do you have a best guess of when this might happen?

We can't just start printing money. Inflation would sky rocket. Our currency would devalue (thus all our exports would get more expensive). It's just not as straightforward as that. I mean if it was, why not just print off 3 trillion pounds (or whatever our debt is) and use the new money to pay off the debt. Dah Dah. Debt gone, UK is free, hooray. It would be nice but no.

Gosh that is worrying. Where did you read that so I can have a nosey.
2012 we were deep in the mire still from the 2008 crisis and never really recovered. So despite cuts they made they had to borrow to keep the country going.
I honestly think the quicker the IMF start sorting it the better.

The trouble is the UK used to punch above it's weight because of our history of ruling the seas and being the first country to have the industrial revolution etc

Now however it is pretty widely known that we have weak, indecisive govt, out of control debt, falling apart public services, lazy workforce who are entitled and prefer claiming benefits. I'm not sure people are going to be clambering to keep in with the UK anymore.

I mean if you had to invest your money just now in a country would you pick the UK who has been in decline for years, has a government who keeps changing it's mind, no industry, problem debt etc. Or would you invest in China where they work like dogs and are streets ahead of us in pretty much everything.

And why would anyone have faith that we would do anything productive with money we got our hands on. I mean right now we borrow to pay interest on our increasing debt because we can't afford to pay it, without additional borrowing. I wouldn't lend to a country that couldn't pay it's interest on debt, never mind repay the debt. I also wouldn't have faith that we wouldn't just give more public sector pay increases and/or benefits which we seem to be increasingly known for.

Our reputation is very quickly becoming an embarrassment.

The shareholders of these companies includes you and I via our pensions, our stocks and shares ISA's etc. So it's not quite as straightforward as you make out. If we tax their profits heavily, less will go into our pensions and investments and we will be more broke during retirement. Then more people claim benefits and pension credit.

The other thing I hear on here regularly is we need to build more council houses with affordable rents. Why would any housebuilder do that when they can build private houses and sell them for much more. Also if the government did it themselves surely they are just taking money with one hand and giving it out with the other ie we give people subsidised rents so we can give them less benefits. I don't think we should make people more dependent on a state which is already in so much debt. We need to cut benefits and let people live according to what they have themselves.

I agree that we should stop topping up peoples wages. Companies pay what they want and if nobody wants to work for that wage fine. However people have to live within their own means. So if they choose not to work because the wages are too low then they have to figure out how else to survive. The govt giving them money is not the answer. All this free money has to stop so we can get out of the hole. I think there will be mass unemployment and homelessness till people realise the government / IMF isn't joking and they pick themselves up and dust themselves down and get on with it.

Nobody said the world was ending. The UK is just going to have to massively adjust to a lower standard of living. It's a shame our govt weren't running around crying out how bad things are/were about ten years ago. We could be halfway home by now with some painful changes. (actually 10 years is probably optimistic)

Nobody is running about selling their possessions shouting the sky is falling. People are reassessing how much they can afford to spend on their home and how much they will need to live on in the future. It's called hoping for the best but planning for the most realistic outcome.

We can ignore it. We can mock it but it's still going to happen. I don't think calling people easily led is helpful. Nobody is being easily led. Quite the opposite. We have all been living on borrowed time for the last x years.

@CarCostingMe this has been very much on my mind today and indeed the last few months

It's weird, I remember when they did that quantitive easing after the 2008/9 crash and people said they were kicking the can down the road.... and here we are at the end of the road. A lot of us are rethinking our future.

The GFC never gets mentioned in these discussions. I've heard it said that it damaged the UK economy more than Brexit. The City is still a massive exporter of services (and a revenue earner for the government) but it took a big hit.

I live outside the UK and my observation is that since 2010 the UK's soft power has steadily declined and Brexit is only part of this.

Also, unfortunately, comparing UK senior politicians now to, say, 30 years ago is like comparing the English cricket team now to 30 years ago except the result is the opposite.

Agree with this. We are actually hammered by the supermarket with wages. They know our cost of production down to a T and cost every single hour worked at NMW. So the farm worker who has been with me 40 years is worth no more in their eyes than the 22 year working part time whilst doing a degree. It’s made everything the same.

Reallg frustrates me to see people bang on about how massive corporations need to pay a living wage. So many small businesses only pay that because we can’t really pay any more. (We do, but not by much).

in terms of when any IMF intervention might happen I have no idea. I think if we think rising food prices have been tough so far we’ve seen nothing yet. And that’s with farmers making no money so I can’t quite work out what’s going on!!