I think we are headed into a major, major depression, and its not likely to get better any time soon.
Historical Factors
The causes of the 2008 recession - hyper leveraged assets who's risk level were obscured; zombie companies surviving on debt, capital exit to tax havens and state subsidies of wages have not been addressed. The debt that was exposed in 2008, was nationalised through the bank bailouts.
The austerity of the post-08 period saw a run down of civil infrastructure, adding costs to businesses (eg, poorer council bin collections = more business spending on refuse; poorer street lighting = higher electricity costs etc) and took a toll on people through poorer health, psychological wellbeing and emotional stability.
Stagnent wages became less of people's overall income as the baby boomers retired; more fell below the benefits line and people with assets monetised them through an increasing and poorly regulated housing market. This housing market, rather than wages, now came to define people's disposable income, where only low-wage people with property equity could survive and high wage people without property struggled.
Covid mismanagement has killed tens of thousands of elderly people, releasing property equity, (condolences to anyone who has lost a relative to covid, I;m not meaning to be callous, just looking at the economic implications), while huge chunks of money have drifted into the economy with little oversight through covid business loans, furlough and PPE contracts, compounding the state debt problem started in 08.
The Situation Now
Brexit is the stupidest economic idea, in the history of stupidity , Tariffs, loss of trading agreements and increased paperwork adding to state, business and personal costs, yet there is a level of political and popular denial of this.
The Truss Government, following on from a period where we had no effective government for months created a financial crisis, where over-leveraged pensions that have now been drawn into the over-leveraged asset bubble, were at risk. So the Bank of Englands attempt to start to deal with the state debt had to be reversed on a handbrake turn, incurring even more state debt.
Keynesian economics would tell us that the state should spend spend spend and refloat the economy, but the state is already overindebted and the effects of the covid liquidity release are now filtering through in higher prices. Increased state spending would increase inflation, potentially risking currency collapse and hyper inflation.
Monetarist economics would tell us that the state should impose stringent austerity to regain control of the debt, but the level of dependency on the state from retirees, low wage employees and businesses mean that this would spiral into a collapsing failed state.
The Future
Climate change is real, very real, scarily real. It is going to have enormous impacts very, very soon. The conditions for growing food are deteriorating, extreme weather events are causing major disasters and air quality is declining. This all adds to the burdens of states, businesses and people leaving it increasingly more arduous to meet basic needs.
A consequence of the increased survival difficulty - poorer nutrition, longer working hours, less comfortable living conditions, is psychological difficulties which reduces the ability of people to be effective and productive. Techological developments in robotics, AI and automation will fill in that gap, further reducing the proportion that wages make to people's survival ability.
In short, we are in for some very difficult decades with major global changes, and the UK has positioned itself in a terrible position.
Happy saturday!