To think the UK economy is utterly broken…

[Paul2023]

Things were never the same after the crash of 2007/2008. Austerity was imposed with the Conservatives in 2010 and things never really recovered after that.

Of course we had Brexit and the pandemic.

We’ve had best part of 15 years of cuts to public services, of which we saw services decimated. We’re now seeing the results.

The Bank of England continues to raise interest rates, yet inflation still ain’t coming down fast enough. Yet, most people with mortgages and who privately rent ( which is most of the population) will be poorer as a result of this.

I think the county is in denial. The economy is in a poor state and I don’t think anyone in government ( who ever it is) has the answer. It’s just a case of sticking plasters over the wounds to fight another day.

Here’s an email a poster got from his father , from another forum I’m on;

“I hate to be the bearer of bad news, but someone must point out the grim truth facing the UK; we're going bust.

The UK has just hit a new and totally unwanted milestone, as the country now owes more money than its entire economy is worth - and it’s only going to grow as government borrowing continues to soar. The UK is particularly vulnerable because much of our debt is linked to inflation, and the cost of it rises with prices. Inflation is not stabilising because of wage demands, pension and supply chain increases.

It's a major symbolic moment but one that is in danger of getting lost, as the cost-of-living crisis rages unchecked

and homeowners panic over how they're going to pay their soaring mortgage bills.

The government continues to spend a lot more than the nation collectively earns, forcing it to fund everyday spending by borrowing money.

Taxes may be at a 70-year high – and set to rise even higher – but it's still not enough. As the nation gets sicker and older, the shortfall will grow.

We’re a nation in denial. So are France, Italy and even the US, but that doesn't make it right!”

Im just so scared for the future of our kids that I really can’t see how things will ever really get better. There’s going to be a bigger population of older people and less people paying tax. It explains why the government is so keen to get older people back into work!

Does anyone else really worry about the state of the UK?

Be needed.

This « exploiting people » thing is odd. When this country was at the height of its economic and political power was when it was at its most exploitative, as our betters at the bbc and the guardian ceaselessly remind us. Our problem is not that. We have an aging population and a large number of people who are not employed productively. Those are surely our fundamental problems.

Yes the two problems you mention are also big factors. I was just giving my imput after 30 years in import/export/retail. Do you know where the goods we all use come from? Are you aware how much people receive for making them? I am afraid the fact is that we all live and maintain our lifestyle here in the UK through the exploitation of other people in poorer countries, no matter how "ethical" people think they are. This is slowly coming to an end as I said and means we have to step up and produce some products or services of value. Up until a few years ago we were also shipping vast amounts of our waste over to China in containers as well and dumping it there until the Chinese stopped it. The developing markets no longer need to pander to the UK. If we want a decent lifestyle we're going to have to work for it.

We were locked down by our government because "We are following the science" and "Need to protect our NHS". Not because of those who suffer health anxiety.

During covid the price per barrel actually went negative putting them at risk of having to shut down (which costs shed loads even when properly planned and scheduled). The UK used to have gas storage and it wasn’t profitable so they were all removed. The war in the Ukraine meant supplies from Russia were lost so supplies from elsewhere went up in price due to supply and demand. If we had gas storage we could have easily ridden the wave. None of that was the fault, for better words, of the suppliers alone so why should we just go all Robin Hood on them now?

Secondly, a lot of private pensions are making money based on this so taking the money off the suppliers will also hit investors. Maybe your own pension would go down? Would you be happy with that or should it just be someone richer who has to pay?

Indeed. This has always been the case. It is hard starting out in home ownership, and in the past it was rarely possible for a single person, just as now.

What are you talking about? How are the government “lining their own pockets”?

Maybe your own pension would go down? Would you be happy with that or should it just be someone richer who has to pay?

I have a tiny private pension which does not even cover my council tax and I am one of those unfortunates who took time off to have children so I do not even get full state pension. I do not qualify for pension credits either so I am poor by today's living standards

Not all pensioners are rich as some people appear to think.

Off the top of my head, PM Sunak's wife's company is one of only six being given government money for childcare provision.

I'm sure there are more.

Yeah and also it’s not really about being ‘fair’, it’s about what will help curb people’s spending. The point is that the interest rate rises only really hit a relatively small number of people - those people on tracker mortgages, people who are looking to take out a new mortgage, and people whose fixed rate mortgages are up for renewal. So it’s really not very effective at all.

Because no one takes out loans for anything else other than mortgages ?

The government does tax energy companies.

oil and gas is a global market with most production outside the uk. The uk government simply can’t tax global companies in this or any other sector. They do heavily tax uk based energy producers but obviously that put prices up further.

no point to fantasy economics. Oil and gas prices are high due to supply and demand which is global.

Business take out loans too and bloody big ones at that. This is going to hit us in all ways it possibly can. I don’t think we are anywhere near the bottom of the curve yet but I’m an optimist and do think there will be a curve at the other end.

Obviously not, but again, it's still not going to be that high a percentage of the population. And the loans on housing will for nearly everyone be their largest debt.

Additionally, even people who are remortgaging now aren't necessarily particularly exposed. The average mortgage debt in the UK is about 140k. There'll be millions of people who don't owe enough for it to make that much difference. If you owe eg 50k with 10 years left, even going from 1% to 6% is just over another hundred a month. A problem for some, of course, but others will simply absorb it. My pay rise this year has been more than that.

Interest rate rises encourage investment throughout the economy and discourage borrowing. That’s how they slow inflation. It’s not all about mortgages.

@SueVineer

Well this is exactly what Labour say they will do if they get in again ! Perhaps Rachel Reeves will enjoy being called a fantastist - I doubt that.

I didn’t mean you personally, just pointing out it just isn’t as simple as taking from the rich and giving to the poor and there are often far reaching ramifications that could affect ordinary folk (some of whom are wealthy).

WRT to taking time out for child care - child benefit would secure your ‘stamps’ so you would get full state pension. Please check your government gateway account as soon as possible before the deadline for certain years has passed.

I grew up in the 70s and it seems to me that the main problem now is that we are a country that produces almost nothing. Employment is based around service industries such as banking, which is only beneficial to the rich.
We need to manufactures more of our own products . I live in Scotland and all the wind turbines that have sprung up were made abroad. No government looks further than the end of their own nose and the can has been kicked down the road for so long we are now in a total mess.
I think current politicians are, by and large, ghastly. It is a career that attracts those that love the sound of their own voice and better calibre folk want nothing to do with it.

"Obviously not, but again, it's still not going to be that high a percentage of the population."

Yep. I don't know anyone who has a car on finance.

Just one example. There are many, many more.

https://twitter.com/carolvorders/status/1671527542254190592?s=20

It really isnt worse in France

I suppose it was either this or claim to know tens of millions of them...

Sorry, I'm not seeing the issues you're talking about.
Hospitality venues are packed.
Record numbers of holiday travelers.
Construction booming-my business has grown by 1000% over the past 2 months.

The problem is in the lower economic bracket, those trapped in the benefits-min wage sector.

Our savings are, at just over 3%.
There's tons of money and wealth about. My peers are middling to very well off. Most able to retire early like us, or been made redundant and not even bothering to get another job. Trouble is hardly anyone bothers to educate themselves about finances and things have been easy for a while so it's a shock for some. For others we have already been there.

Yes things are still going well for many but that’s probably why interest rates keep being hiked

They’re trying to interrupt wage increase etc

Yeah it's obvious what they're aiming to do. The 0.5% rise wasn't a shock.