UK is poorer than Mississippi and not much richer than Italy or Spain or former East Germany (without London in the equation)

[rosetintedmemories2023]

Does this shock you?

A welfare state and free healthcare is generally the preserve of rich countries. It makes sense why the NHS pay is no longer competitive (whether inside or outside London) as the country can only pay proportionately to its wealth (even if you make a policy decision to try to pay essential workers well, there is only so much you can do without overstretching)..

Is Britain really as poor as Mississippi? - Financial Times https://www.ft.com/content/e5c741a7-befa-4d49-a819-f1b0510a9802

Those brackets are pretty significant OP.

Nope.

And the trend is that the UK will get poorer, but with London growing but the left behind areas getting even poorer.

Brexit only damaged London's long-term growth rate (so it grows at 2% instead of 4% per year for example)

What the people who voted for Brexit never understood, is that by actively damaging London (which is what they wanted) they made themselves even poorer because the reduced tax revenue from the lower growth would make them all poorer.

And now its too late.

What the Truss debacle proved was that investors (UK creditors who buy Gilts) are unwilling to finance UK Public spending that is non-productive.

So the UK is now effectively stuck in a demographic doom loop (more and more money being diverted to the older folks due to demographics) AND stagflation (zero growth with high inflation).

Oh, and its also now trapped in a wage-price spiral that will necessitate further BOE rate rises over the coming months.

This all adds up to the BOE having to engineer a recession over the next 24 months to stop the spiral.

But London is in the equation? I don't get it

Not shocked no. We are slipping into second world territory. A bit like Albania and South Africa

It means that our average GDP per capita (which is considered relatively high) is mainly because of London being such a rich city (on the same tier as Frankfurt and Paris). This doesn't help the average Briton who doesn't live in London. In fact it isn't even good for the many Londoners who do not work in sectors like the financial services or tech industry (which are what make the city wealthy and boost the gdp per capita but who work in the NHS, academia etc (as you would be paid mainly based on national pay rates with a minuscule london weighting on top).

Also in the long run, a city of 9 million people cannot support a country of 70 million people. London and the SE are the only net contributors. The average Briton may benefit from London's tax dollars (which allows poorer areas to have the welfare state and free healthcare which is usually the preserve of rich countries) but in the long run, this is not sustainable (also london is the region with the highest per capita spend other than scotland and northern ireland, despite being a net contributor).

Are we poorer than Mississippi with London in the equation?

I live in a really rural, quite impoverished part of the UK. It doesn't feel 2nd world to me. Even less so when I go to a big city (Manchester, Liverpool & London recently) and see the amount of shopping, drinking and dining out.

What am I missing?

Years ago, I read an article by a world-reknowned economist, whose name escapes me now. But the gist was:

" The UK is a 3rd rate country attached to a 1st rate capital "

That stayed with me, and it becomes clearer every day.

Oops cross posted. So you're saying our welfare state is not sustainable?

The calm before the storm.

Its mostly on credit. And that particular party is over now.

Next year you won't see much of that.

we are not. But if you don't live in London or in finance or tech or some other well paid industry, you are not benefitting.

The UK benefits from a welfare system which allows for more redistribution. We also have a middle class. Italy and Spain also have a middle class. Middle class people go to restaurants to eat and drink and dine out. That is normal.

the problem with becoming a poorer country is that public finances become more strained. Its much harder to fund things like free healthcare and quality state education.

The problem is property is so out of reach that the actual working people have no incentive to become more productive.

@TheThinkingGoblin possibly. I come from a (non UK) city with some of the highest real estate and highest earners in the world. When I've been back to visit recently my home city feels much poorer and more dangerous, teetering on the edge of something with shocking levels of homelessness and filth, next to shocking levels of wealth. It feels unsustainable in a way that London and Manchester does not. Maybe we are 12 months away from collapse here in the UK, I don't know, but I suspect we're not alone

The divide between London (and maybe the South East) and the rest of the UK does not surprise me one bit.

London, SE England and the East Midlands are historically the places in fiscal credit, all the rest are in deficit - they take out more than they pay in. That gap has narrowed and we've been living on borrowed money overall for the past 25 years or so and our national debt had risen to the point where it exceeds GDP.

It used to be the case that if America coughed, the UK caught a cold, now we're permanently unwell and in terminal decline.

Do you know the reason/s East Mids are a net contributor?

Yes I agree and it's not wise for the UK to rely so heavily on London. But it's a chicken and egg scenario. When there's heavy investment in London, it will attract more business.

Where I live you don't even get decent Wi-Fi when you're out and about. Transport is pretty poor. It's not the kind of place that's attractive for businesses to come and set up.

I don't know what the answer is.

Used to be because of manufacturing.

That will change though

No, it doesn't suprise me in the slightest. I am infuriated, depressed, frustrated and appalled at how low the UK has sunk in the last decade, but not surprised. We have a badly educated and switched off electorate, a rabidly right wing media and a government made up of grifters, liars, spivs and morons. It will only get worse. Whether it can get better with a change of govt is up for debate but I'm not holding my breath.

This is paywalled so for all I know the answer is no, Britain is not as poor as Mississipi.
What does that even mean?

It doesn’t surprise me that London and SE funds the U.K. no

But I’m not as gloomy as other posts. We have ingenuity and creativity although we need to scale up better - this is the part we lack

Also more attractive tax rates but people tend to flip out over that

I'm in the cotswolds which is full of wealth (and pockets of poverty) and the Wi-Fi signal across most of it is a joke. Why the fuck do we need 5G when I can't even get H+ most of the time?

Do you look at Labour run Wales and hope for that though?

That looks concerning

Actually you say you’re not holding your breath so maybe not

You get the feeling some days that there are posters who are outraged that we aren't all rocking in the corner.

Yeah, but, but, what if we were as poor as xxxxxx and then a tsunami came along and, er, we were force fed upfs and then all the computers crashed....you wouldn't be so smug then, would you? Would you? WOULD YOU?