UK moving towards economic crisis?

Kermit.de.frog

The UK seems to be getting itself in to a downward spiral really quickly. Rising national debt, austerity measures starting again and falling consumer confidence are taking a toll. A self fulfilling momentum is gaining traction. Labour is blaming what was left to them by the Tories but the problems are deeper than that.

One to watch I think and it could impact us here as well if things start to get really grim.

UK consumer confidence tumbles as households fear ‘painful’ budget; UK debt hits 100% of GDP – business live

https://www.theguardian.com/business/live/2024/sep/20/uk-consumer-confidence-tumbles-painful-budget-retail-sales-borrowing-business-live?CMP=share_btn_url

Peregrinus

I'm not sure that the UK is "getting itself into" a downward spiral. It's been in a downward spiral for some time; all that has happened recently is that it hasn't come out of it. The election of Labour didn't magically stop the spiral, and Labout haven't yet made any policy changes that would stop it.

Labour is, as you point out, blaming the Tories but I'm not sure the the problems are deeper than that. Except perhaps, this deeper problem; Labour has boxed itself in with commitments to not changing or revisiting a wide range of Tory policies. If you believe that current economic woes are the outcome of Tory policies (and, spoiler alert, to a signficant extent they are) then committing to continuing those policies is . . . unwise.

it's a problem that may solve itself, in part, with the passage of time. Tory tax policies, public spending targets, etc are inherently time-limited. Labour hasn't said that they will never raise public spending, or taxes, or whatever, over the Tories most recent targets, or that they will never seek to align more closely with the EU. As time passes Labour will have more freedom to do things that, if they did them immediately, would look like a cynical breach of the position they publicly adopted in order to win the election.

Which means no quick fix to the UK's economic woes. But the possiblity of progress in the medium term. A possiblity which Labour may or may not take advantage of.

Jim_Hodge

The UK economy had been in a downward trajectory for a few years now and there's no short or medium term correction in sight.

scottser

I doubt anybody is surprised at the poor economic forecast for the UK. What is surprising is that they elected another pro-brexit PM. The longer they continue this delusion, the worse their fate will be.

Bobson Dugnutt

They should hire in thousands of more consultants from Boston Consulting, McKinsey, EY etc to commission reports that recommend outsourcing of manufacturing to Asia, privatisation of the health service, making your capital city a place where Russians, Arabs and the Chinese park their money in apartments, and how uncontrolled immigration actually benefits not just the billionaires but also Wayne and Karen.

silverharp

https://www.boards.ie/discussion/comment/122636287#Comment_122636287

dont forget war, good for business, funnel moar money into defense and places like Ukraine , make it just like old times pip! pip!

Bobson Dugnutt

Providing money and arms to Ukraine is absolutely the moral right thing to do. Russian imperialism is a problem for everyone in Europe.

tinytobe

The UK would need to rejoin the EU, or at least have a Switzerland or Norway style agreement to boost the economy. However they are too stubborn to see that. Easier to blame others for your own misery, point fingers somewhere else.

Kermit.de.frog

https://www.boards.ie/discussion/comment/122636318#Comment_122636318

On the contrary the UK economy grew strongly in the first half of the year. Their problem seems to be they are spending too much more than is coming in and they need to correct that.

The real question is will the medicine be the cure or will it damage confidence and get them in to a doom loop. More austerity, less confidence, less tax revenue…and round and round.

Jim_Hodge

https://www.boards.ie/discussion/comment/122636368#Comment_122636368

Kermit you can't call 0.6% strong growth after 7 quarters with flat or negative results.

breezy1985

https://www.boards.ie/discussion/2058369763/uk-moving-towards-economic-crisis

Its all thanks to the Brexit you pushed over and over. Constantly telling us how any minute the UK was gonna jet off into the stratosphere and leave a ruined and destroyed EU behind.

So mad you were for Brexit that you were desperate for us to follow.

Funny than suddenly with the Tories gone you notice the UK is in trouble.

Kermit.de.frog

https://www.boards.ie/discussion/comment/122636395#Comment_122636395

How do you explain the growth in the years prior to last year then? The economy grew 4.3% in 2022. By any measure that is stunning growth for an economy the size of the UK's.

I think it's a big stretch trying to ascribe the current issues to Brexit to say the least when what they have is a government that is overspending.

tinytobe

https://www.boards.ie/discussion/comment/122636368#Comment_122636368

There is a lot missing in the UK.

With better access to the single market the UK could be doing a lot better.

Birmingham is bankrupt, Scotland has financial issues, mismanagement by the SNP, etc..

In London you don't see it, but the more rural one gets the more the problems are evident, - except for tourist towns on the sea.

Kermit.de.frog

https://www.boards.ie/discussion/comment/122636441#Comment_122636441

If people want to put forward the Brexit argument that's fine, perfectly legitimate. Maybe it plays a role but those who say "it's all because of Brexit" for their own agenda - that's just not true. Governments are there to govern and the UK has the responsibility to manage it's budgets responsibly.

breezy1985

https://www.boards.ie/discussion/comment/122636522#Comment_122636522

So you think it was Tory mismanagement in more recent years is the problem ?

Kermit.de.frog

https://twitter.com/trussliz/status/1837059325983961273

A reminder that Liz Truzz single handedly very nearly got the UK locked out of the financial markets in 2022.

Shoog

Coupled to the gross mismanagement that the Tories visited on the UK for 15 solid years, is the huge demographic time bomb that it is dealing with. Everytime I visit the UK the population profile looks increasingly grey and unproductive. No country has solved this demographic crisis - but laying it on top of the decades long decline in productive industry and the burgeoning health budget and I cannot see any way they can "manage" their way out of a collapse in general wealth and wellbeing.

Kermit.de.frog

https://www.boards.ie/discussion/comment/122636525#Comment_122636525

Yes I do. Not only in more recent years. UK govt debt has been on an upward trajectory since 2013. It's in recent years the consequences are starting to show. At least Labour is trying to act. It should of been acted on by the Tories.

manniot2

I’m in London. The city is buzzing, thriving and busy. Not like our hell hole, dirty, drug ridden capital.

28064212

https://www.boards.ie/discussion/comment/122636438#Comment_122636438

How do you explain the growth in the years prior to last year then?

By pointing out that their economy cratered in 2020, far worse than the other large European economies. 2021 and 2022 weren't improvements, they were clawbacks of the massive losses they incurred

Kermit.de.frog

https://www.boards.ie/discussion/comment/122636585#Comment_122636585

Dublin has it's issues but be under no illusions parts of London have a very serious crime epidemic at the moment particularly knife crime.

tinytobe

https://www.boards.ie/discussion/comment/122636522#Comment_122636522

That's not really correct. Businesses did move from the UK due to Brexit, especially if their business had strong ties and customers in mainland Europe. Reasons were often more paperwork, more bureaucracy, longer wait times, etc… Thus it's less economic activity, also resulting in less tax intake as well.

Also public spending was wrong, the Conservatives were more into their own Brexit-ideology, not really about common economic reasoning. Take a look at that whole Rwanda business. To me it was very clear that no plane would ever take off, and the price tag was massive. That's only one example.

And as said, in London you don't feel anything or not much. Nightlife isn't as great as it used to be, but apart from that the city is still fine. However the more rural you get, the more you feel it, espeically in parts of Northern England.

Kermit.de.frog

https://www.boards.ie/discussion/comment/122636628#Comment_122636628

I think most people would agree London has not been an accurate representation of the well being of the rest of the UK for many, many decades now. Might as well be a different country.

On Brexit I just don't agree with those who are saying "this is all because of Brexit". It just isn't. This is primarily down to mismanagement of public finances for over a decade. A government can absorb trade distortions, friction and costs and still keep their finances in check even if there is less to go around or the pie is smaller.

silverharp

I remember watching a random youtube video, "8 worst places in Durham" an ex mining county in the NE of England, very grim , they pretty much need to pull them all down and start from scratch

breezy1985

https://www.boards.ie/discussion/comment/122636690#Comment_122636690

Of course you don't agree it was Brexit because you were such a massive fan of Brexit you got banned from the UK thread in Politics for the amount of absolute bollix you posted over and over.

hotmail.com

https://www.boards.ie/discussion/comment/122636585#Comment_122636585

Dublin could only dream to be more like London.

Kermit.de.frog

https://www.boards.ie/discussion/comment/122636765#Comment_122636765

You are fanatical about Brexit and you don't read. A bad mixture.

ancapailldorcha

I wouldn't say "economic crisis", I'd say "elective decline".

From 2010, the Conservative-dominated government decided to start stripping the state for the benefit of Tory party donors and the top 1% while inflicting cruel austerity on the poorest people in this country. Then the Tories brought us Brexit, the first time in history a country has unilaterally placed trading sanctions on itself, to say nothing of the loss in soft power, diplomatic reputation, investment opportunities and trade.

Brexit has cost over a hundred billion pounds at this point. It's been a complete disaster for anyone who isn't a currency speculator like Crispin Odey with the Tory party's ear.

Countries across the world are struggling with issues from housing to migration to climate change to widening inequality. What makes the UK special is the additional pain from Brexit, as unnecessary as it is catastrophic and voluntary. It's a bit disingenuous for the OP, who spent years shilling for Brexit here, to start acting concerned about the UK at this point.

It is the ultimate responsibility of the Conservatives and the morally bankrupt, right wing press of this country that the UK is in this situation. The country feels like it is falling apart and a lot of property crime is effectively decriminalised.

It's hard to see how a Labour government hawking the stupid idea that the nation's finances are like a household's is going to make the structural changes needed but at least we've gotten rid of scum like Johnson, Truss and Sunak. That's something to celebrate at least.

ancapailldorcha

https://www.boards.ie/discussion/comment/122636585#Comment_122636585

I'd take London over Dublin any day. There's just so much more here.

Shoog

Brexit has been both massively expensive to implement, money not available to productive public investment, and massively impacted exports. Of course Brexit has been the most significant contributor to recent economic decline in the UK.

A decades long antipathy to industrial investment is the foundational issue which caused all the other problems - including Brexit.

breezy1985

https://www.boards.ie/discussion/comment/122636735#Comment_122636735

A lot of those towns existed only for the mines. Some of them should just be bulldozed with the people relocated to the nearest city. Young people from those places either get out or get in the dole queue.

Kermit.de.frog

https://www.boards.ie/discussion/comment/122636790#Comment_122636790

"a lot of property crime is effectively decriminalised"

Not sure what is meant by this?

ancapailldorcha

https://www.boards.ie/discussion/comment/122636798#Comment_122636798

It's not a hostility to investment, it's a hostility to growth. By growth, I mean real growth and not the percentages crap the OP has gone with to pretend that all is well here, Brexit be damned.

British people have a disturbing hatred of building of any kind. I just watched Clarkson's Farm, despite my loathing of Mr. Clarkson, and while it is excellent telly, it very clearly shows how toxic NIMBYism chokes innovation and ultimately hurts anyone not sitting on an expensive property.

Remember, HS2 was originally a New Labour idea until Sunak neutered it at the end of his premiership. Most of the public thought it was about speed but it was about capacity. People don't want growth, they want the status quo. Growth would mean investing in public services, housing and infrastructure.

silverharp

https://www.boards.ie/discussion/comment/122636810#Comment_122636810

either return them to nature as a resource for the people or some grand infrastructural project to create a network of towns from scratch , they seem to moan a lot over there about green spaces yet they could easily house at ~ a million people if they had some "Chinese energy" or big thinking

Shoog

I was born and bred in the UK, and every time I visit now I get more depressed by the shocking state of the place and the shocking attitudes of the British. I told my wife that I will never ever consider moving back to the UK under any circumstances.

It used to be that we would go back if either one of us had a serious health crisis like cancer - but I now think that would be like signing your own death sentence.

hotmail.com

https://www.boards.ie/discussion/comment/122636765#Comment_122636765

Don't know if you are English yourself but you really do seem to hate British people.

afatbollix

Not one mention of the real reason in all the news reports today.

Brexit

When a vet has to check a truck of sausages or cheese for import or export, but they can't talk about it as you'll be called a remoaner. They all have their heads in the sand.

JupiterKid

Britain on a prolonged and entrenched downward spiral since Brexit.

It is a nation in long-term decline and has been for about a century now. This decline does seem to be gathering pace in recent years. The UK economy never really restructured itself properly after the managed destruction of its manufacturing sector.

Despite all its problems, the quality of life in Ireland - and the general standard of living - is way above that of the UK now.

Peregrinus

https://www.boards.ie/discussion/comment/122636690#Comment_122636690

It's not all because of Brexit — at lot of damage had been done by austerity before Brexit came along, and austerity continues to do damage — but brexit is a signficant component.

Your point that "a government can absorb trade distortions, frictions and costs and still keep their finances in check" doesn't make a lot of sense. If the country is suffering trade distortions, frictions and costs, that's serious damage to the national economiy right there. It doesn't go away just because government finances are still conducted in an orderly manner. A government's balance sheet should never be confused with a nation's economy.

Smee_Again

https://www.boards.ie/discussion/comment/122636941#Comment_122636941

Also, a government that is causing the trade distortions is very unlikely to simultaneously manage those distortions effectively.

Shoog

Governments are the only sector which can afford to borrow for strategic infrastructure investment, and this produces growth in direct spending in the short term and growth in productive capacity in the long term.

The problem is that all the borrowing that the Tories did, which ballooned the public borrow to historic levels, went on short term day to day government spending because austerity killed the streams of government income.

It's fine to borrow as a government if you can reliably predict that it will increase your productivity long term - but an utter disaster to borrow just to keep paying the bills.

The decline of the UK is directly attributable to the "household budget" approach to government finance promoted by Thatcher and slavishly parroted ever since by the Tories, coupled with a ruling class who were educated in how to manage the plundering of empire rather than the managing of a country. Also there is a real visceral hatred of ordinary people among the ruling elites.

It's a potent mix which is fine when the cash is flowing in from external sources - but a disaster when you have to generate real productive capacity.

PixelCrafter

My experience of the UK is that the wheels came off after the financial crisis in 2010. The tabloids and the commentary very successfully deflected attention towards the Eurozone and made it seem like there was only a financial crisis in Europe. Meanwhile, the UK pretty much had all of the same effects we had in Ireland - massive bank bailouts and heaping on huge public debt, nationalisations and all of that.

It toppled into Brexit and the policies and politics became ever more toxic but it's been a downhill slide since the financial crisis and I think really that's what you're seeing in everything in Britain.

It never quite recovered, in many respects and the austerity approaches just became deeper and deeper because they suited a Tory ideology of dismantling welfare and service. It was enhanced by some of the most extreme and weird tories we've seen in modern history. They get compared to Thatcher, but they were FAR, FAR worse and often totally unrealistic in the way they dealt with matters of the economy and almost everything else. It was all just about headlines and spin.

They forget is that every cent of welfare is basically spent back into the economy - it's local economic stimulus, so they've caused the decline of entire regions of the UK that were less well off - you can clearly see that in some of those areas when you visit. They look poor in aways I don't remember the UK looking in the 90s and early 00s.

Labour aren't in very long yet, so I don't really know what's going to happen, but they're certainly not really coming forward with radical new solutions to try and undo some of this. It seems to be more a case of trying to balance the books.

A lot of it will depend on the global markets, on sentiment towards the UK and also on whether they're able to swallow hard and undo some of the most destructive aspects of Brexit, but that seems highly unlikely. It's turning into the elephant in the room that nobody's willing to talk about - the boat nobody will dare rock and a national trauma that is just becoming that thing that absolutely nobody wants to mention.

MeisterG

Aside from Brexit, the big issue for the UK is demographics - unemployment is low - but much more crucially is that employment is also low, and that is the biggest lever for economic growth there is. With respect to the argument that the economy is not a like a household - actually the ability to not be treated like a household is a luxury afforded to a few nations and Truss showed that the UK is treated more like a household these days - that was the scariest thing of her "reign"

breezy1985

https://www.boards.ie/discussion/comment/122636893#Comment_122636893

Show me any part of what I said would point to me hating British people ?

How is me calling out Kermit hating British people ?

ejmaztec

https://www.boards.ie/discussion/comment/122636851#Comment_122636851

There was more chance of depressed areas getting EU funding before Brexit, and it's now down to the British government where the funds go. I think a lot of places have received feck all for years, probably down to local pressure groups being fobbed off.

Kermit.de.frog

https://www.boards.ie/discussion/comment/122637015#Comment_122637015

What are you even "calling me out" about?

Shoog

https://www.boards.ie/discussion/comment/122637007#Comment_122637007

As a country, to be able to borrow you have to show you are going to invest both sensibly and productively in order to guarantee the return on investment. Britian has destroyed that confidence.

ancapailldorcha

https://www.boards.ie/discussion/comment/122636893#Comment_122636893

Curious comment given the amount of times you've insisted that Tommy Robinson represents all English people.

Kermit.de.frog

https://www.boards.ie/discussion/comment/122637007#Comment_122637007

+1. The whole establishment in Britain (mainly on the Tory side obvs) got the fright of their lives when the markets so viciously turned on the country the day she made her plans known. They never have experienced that. This was something for lesser countries in the world. They got a wake up call.

silverharp

https://www.boards.ie/discussion/comment/122637017#Comment_122637017

its not down to EU money , they are just a tired country going through the motions

MrMusician18

https://www.boards.ie/discussion/comment/122636619#Comment_122636619

They are both kips