Rachel from accounts has crashed the economy

[Almn0etd]

So borrowing costs are now even higher than when Liz Truss was around.

The economy is well and truly cooked and in a far worse shape now that Rachel accounts is in charge.

Why isn’t this dominating the news cycle? Because it’s Labour.

The Tories were atrocious. Labour are an indescribable disaster for this country, surpassing the lowest of the low bars. Cue Labour apologists who don’t mind being made poorer and having the country destroyed, as long it’s Labour doing it to them.

Yes it's in the IFS data - neither tories nor labour want o talk about the fact that higher earners have never paid more tax since 2010 onwards, whereas average earners are getting a much better deal than in the rest of Europe.

ifs.org.uk/articles/how-tax-burden-high-when-most-us-are-taxed-so-low

'In his budget speech Jeremy Hunt made the following statement. “The average earner in the UK now has the lowest effective personal tax rate since 1975 — and one that is lower than in America, France, Germany or any G7 country.”

But nobody wants a factual debate these days! Data is right wing.

Data is right wing.

I’d argue the opposite. Your post is highly unusual in presenting facts and providing evidence from a right wing perspective.

Maybe facts and data are derided across the whole spectrum - the reality is that the costs of the improved healthcare offered to an ageing population is driving the erosion of the political centre ground all over Europe.

The IFS have gotten into trouble for close links to labour recently - only right wing if you believe Starmer is a red Tory. I had no time for that pre election but based on the tax evidence - there isn't a lot of difference between labour and the tories as the IFS also says, the last budget will be viewed very much as a continuation of a well established trend.

Growth is not the only metric that counts. Comparing growth against other countries is also not that important, it’s not about winning, it’s surely about good outcomes for the people living within your boundaries, and those who will live there in future.

Compare inequality. Compare happiness. Compare mortality. Compare poverty. Compare crime.

High growth does not always correlate to lowering inequality, raising happiness, lowering crime, lowering poverty, lowering mortality.

I think Deborah Meaden's twitter comment on this link: "There’s gonna be a lot of very disappointed people…" definitely applies to some posters on this thread -

https://www.independent.co.uk/news/uk/politics/uk-europe-rachel-reeves-imf-forecast-b2681450.html

Hope that calms down the ridiculous catastrophising, at least for now.

So a forecast figure that was proved incorrect for last year which has been revised by 0.1% upwards for this year is cause for celebration?

Yeah because every forecast the IMF has made about Britains economy in the last few years has turned out be correct. Not.

If you want to know how the economy is going to perform, you are are better off than reading tea leaves than asking the IMF.

@Anniedash I bloody love your posts 👍

I was thinking that. Always amusing and to the point

I love your posts too Eastern by the way.
You should start a chat thread, just for those of us who prefer dogs 😉

Haha 😆 it has been a good thread, left alone a bit to actually discuss economic impact

Have enjoyed the posts

The IMF forecasts are generally pretty accurate. Nonsense to compare them to reading tea leaves.

A 0.1% upwards revision is pretty trivial in and of itself but there's been a lot of (largely partisan) hysteria over the last couple of weeks that doesn't seem to be shared by most actual economists (even those who are critical of aspects of the last budget).

It's also worth pointing out that the IMF forecast isn't at outlier - others (including those released this month) have been similarly optimistic-if-lukewarm.

I remain skeptical that Reeves/Starmer/Labour's apparent plan to "fix the foundations" and then springboard into more meaningful growth in a couple of years will pay off, economically or electorally, but the idea that they've crashed the economy is daft.

I really couldn't care less about the IMF's tiny revision to be honest.
I base my opinion on my real world, lived experience as a small business owner/employer. If that makes me guilty of 'partisan hysteria', so be it 🤷

Do you include contracting the private sector in “fixing the foundations”?

She’s trying to fix it and dig the country out of a large hole. Since July.

But unfortunately has done things that make it worse. Increasing a tax on employment when (a) you want growth (b) you want to reduce the benefits bill and (c) you need higher tax revenues, is counterproductive.

Retail sales were down 0.3% in December, compared to a pre budget expectation of a 0.4% increase. Now, retail sales are about £50 billion a month, and maybe a 0.7% swing is only £350 million, but that’s a monthly number so cumulatively that’s @ £5 billion hit for 2025, assuming we recover to the pre budget expectation in January. If we don’t it keeps going up. And we lose corporation tax, VAT and probably income tax / NI as well as if retailers react (they will) by trimming labour hours / costs.

Since July. She has to get the money somewhere, and you know, the business owners are not going to volunteer it otherwise, are they? I think it is great she’s revising inheritance tax, closing non dom loopholes, and I hope she does everything she can to tax the absolute heck out of the wealthy. There is way too big a wealth gap in this country and too much tax avoidance. And the strikes have mostly stopped for now, which is brilliant. The junior doctors can do what they need to do—help patients on a living wage.

Happy well run countries are like Denmark. Not as big of wealth gap and a safety net for citizens so they don’t have to worry. The UK should emulate that rather than the United States.

But, her budget didn’t tax the wealthy much. The biggest hit was to businesses that employ people. People who now have lower incomes, if they still have a job, as a result.

And perhaps you missed the news about the new train strikes, and the plan for more doctors strikes this year if their new demands aren’t met. Then of course the teachers, nurses and public sector also want more…

Meanwhile, a millionaire leaves the UK every 45 minutes. The biggest exodus of any developed country…. Making the policy massively negative from a tax receipts perpective. But, I guess it doesn’t matter if we are all worse off, as long as the ‘wealthy’ have been punished. Ideology over economics is never a recipe for success.

If we want Danish levels of public service then everyone needs to pay more tax, include the the low and middle earners. Do we fancy a 30% tax rate at £35/£40k? I think it’d be a good plan, but how about the rest of the country?

Ideology over sound economics never works.

I saw the new train strikes, yup. I am so, so happy for the junior doctors. Maybe the public sector might want more. It stopped it for now, and that’s good. As I said, since July.

Would totally go for a 50% tax to receive those social benefits. I’m very happy to see the millionaires go that are just here for tax avoidance. I’m a millionaire and happy to pay more tax. The wealthy are hardly being punished. The UK has some of the highest income inequality in the developed world.

This is because the top 1% have incomes substantially higher than the rest of those in the top 10%. Since 1980, the share of income earned by the top 1% in the UK has generally been rising, peaking at 14.7% in 2007 before the financial crisis. This is almost double the corresponding figure for Belgium (7%) and still higher than Australia (9%), Sweden (8%) and Norway (8%), to name a few.

I also might offer that trickle down economics does not trickle down.

The majority of households in the UK have disposable incomes below the mean income (£32,300 as of 2022). This includes wages and cash benefits, and is after direct taxes like income tax and council tax, but not indirect taxes like VAT. The median income was rising by 2.2% on average for the last five years before the pandemic. However, in 2022, incomes for the poorest 14 million people fell by 7.5%, whilst incomes for the richest fifth saw a 7.8% increase.

In 2022, households in the bottom 20% of the population had on average an equivalised disposable income of £13,218, whilst the top 20% had £83,687. The richest fifth had an income more than 12 times the amount earned by the poorest fifth
https://equalitytrust.org.uk/scale-economic-inequality-uk/

Is it sound economics to have massive income inequality, and for people to be using food banks and for kids to be hungry? It might be sound economics for those who benefit from this state of affairs, but it also leads to low productivity and social unrest—and the latter can be rather dangerous for economics.

You all realise that this US economic growth was under Biden, who had progressive policies? Not Trump. Of course there is a great deal that is not under the federal government's control, but the government invested a great deal in the economy and infrastructure.

Trump got back in because, among other things, people didn't like inflation. That said, American inflation was lower than the UK's, and of course the biggest factor in that was Covid.

the idea of Starmer's lot being socialists, oh my. That was the funniest thing I've read today.

Thank you for that good point.