The UK Economy is Defying Gravity - How Long can it last?

A look at seven lurking problems for the UK economy, especially focusing on the impact of higher interest rates. Is there any good news on the horizon?
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[@justjacqueline2004]

Still my food bills are exploding for the same paltry food even at Aldi/Lidl the saviours of us all.

[@jontalbot1]

You have not mentioned the catastrophic declines in both investment and exports to compound the woe. Labours big idea of investment in housing may work but it is a long term strategy and l can think of plenty of reasons why it could all go wrong. The sad truth is no one really knows what can be done. We have had years of promises to improve education and training, including proposals in the Kings speech but they are badly thought out and piecemeal. The only consolation is there are many other countries facing economic problems of their own

[@andrewtaylor6737]

Agree! The whole world is in big trouble, not just confined to the Uk.

[@PazLeBon]

@@andrewtaylor6737 but emphasises that youre better off together and not alone

[@iwasntaguntilimovedouttheh3961]

Improve education if your in one of England's main cities, you can't wait until your kids leave the education system so you can go about your day not worrying about their safety.

[@dancullen177]

The UK consumer based & services & financial services & real estate based economy with no manufacturing element and depleted North Sea oil reserves will struggle massively if the BOE monetary policy committee blindly think they can copy the USA federal reserve’s interest rate higher for longer policy in managing our much smaller insular Brexit Britain economy.

[@PazLeBon]

almost a slave economy for corporations .... and landlords, should ban landlording altogether

[@dancullen177]

@@PazLeBon They almost have banned landlords with the section 24 finance act and the proposed renters reform bill! The Landlords sector is going in the same direction as the green grocers, butchers and the bakers shops, insolvent! Landlords is one of the last industry’s which isn’t dominated by corporations in the UK, when they go people throughout the UK will know the meaning of true feudalism when the corporations take over the sector.

[@JesterEric]

Banks are looking to take over the private renting sector. They will rent back repossessed houses and buy new build houses

[@PazLeBon]

@@dancullen177 Landlords to me are like sharks, profiting and paying thier mortgages at the expense of others. If we ban them then we will have homes back on the m,arket and drop in prices. The quicker we see homes as homes and not investments the better. The Conservative party always drove up prices so that the wealth of the country looks better but its to the detriment of the working class. The government needs to give up land, probabaly from unprofitable land that we subsidise and let independant small eco home builders build homes, prebabicated, printed, straw bale homes etc etc so that people have choices across the board

[@theguy9067]

​@@PazLeBonyour ideas are the cause of all this

[@mihail4391]

Thanks for the content. I would highly appreciate if you could record a video discussing the productivity of the UK and the factors why it’s lagging behind.

[@PazLeBon]

lol@productivity.. one of the early adopters of mobile phones, productivity rose for a short while then tanked ever since. maybe everyone just wants to make tiktok and youtube videos nowadays :)

[@joelincoln6560]

Tax. If you are paying student loans, it feels pointless to work more around the 30 - 40k mark. I effectively pay 40% tax, and thanks to inflation my take home pay is worth less than when I started my career 8 years ago. The government then turns around and uses the tax to fund hotels for economic migrants, it puts a sour taste in British working peoples mouths.

[@ZombieNation-bo3pu]

How much ink have we got ???????

[@PazLeBon]

@@joelincoln6560 but that loan is really ffrom the pblic not governemtn, if you dont pay your dues and want that education for free, we all lose out

[@PazLeBon]

@@joelincoln6560 certainly not all british, i personally am not racist tbh

[@andrewtaylor6737]

Why would homeowners be in for a shock ?, they've had ultra low interest rates for years - must have some very healthy savings! Young people who taken on silly mortgages will the ones that suffer sadly, when the economy tanks - property's crash in value! The whole world will be going into a depression, but people chose not to see 😞

[@BigHenFor]

Blaming the victims is ignoring that British culture focusses on home ownership as a basic expectation, and not an impossibility. In this we are regressing, as it was possible for at least a quarter of a century after World War II. Moreover, British voters have voted for parties which either offered the chance of ownership, or allowed the Housing Bubble to develop in the first place. I'm sure you would be pleased if the value of your home declined quite significantly as a result of building the homes we need, yes? That's why it hasnt happened yet. So, our economic apartheid based on property will continue to strangle our economy, and make political goals like little or no immigration increasing impossible, and then the political fallout will destabilise us further. The impossibility of Financialisation's asset bubbles not destabilising our economy, our demography, and our politics in turn is not acknowledged, even as it is doing so. There's none so blind who will not see. Either we protect renters, or pay them more so they can afford to rent, or we just ignore their plight, it will not simply go away. In denying them the opportunity to have the security of a roof over their heads that they can afford, they cannot spend to grow the economy. They cannot start families, and our native population will decline, and that means immigration. If you are happy with that, fine. But considering the politics suggests the opposite, British voters may be forced to accept it, because the UK population has for more workers at the end of their working lives, than at the start of it, and as the wealthy don't like paying taxes, or real wages, theres going to be problems down the line.

[@andrewtaylor6737]

@@BigHenFor Wow! Thank you for taking the time for such a clear & precise reply, I will genuinely read your reply & take on board all of the above!! Once again, I will thank you for your time.

[@dieselgav]

@BigHenFor Excellent post.

[@PazLeBon]

lol@savings

[@PazLeBon]

@@BigHenFor homes absolutely need a crash, they should be homes not somehing that adds to the countries gdp. ban landlords, build affordable homes. downsize if cant afford it. sure, will be short term pain for half a generation but then out of the mortgage and rental slavery

[@iwasntaguntilimovedouttheh3961]

I just started looking at what lead to Japan's interest rate situation and it is looking very similar to the period of low interest rates we had. I am going to look more into Japan, maybe after we go cashless we will see negative interest rates. The UK juggling looks like its coming to a end if we'd just stayed producing quality and training engineers and skilled trades maybe we would have still had a country worth encouraging future generations to stay in.

[@charrogate]

A fundamental area is 🇬🇧 Treasury fiscal drag. As wages and pensions increase, the current frozen personal tax allowances (until 2028) will bring increasing numbers of low income earners into tax single persons' excess income over £12,570 pa bracket @ 20%, let alone the additional administrative burden being imposed on HMRC 🤔 Interestingly I've discovered one developed country that does not treat state pensions as an income taxable source. It is considered that pensions have been derived from forced income previously deducted (national insurance) and thus should not be taxed again for a second time 🤔

[@jim-es8qk]

GB has recalibrated its trade, a workable government, kept control of its own interest rates, is highly innovative, has a bundance of natural resources, and has a very flexible labour market. It should be flying!!

[@rheung3]

last 12 months FED slowly shifting their keyword on economy, from modest > moderate > solid > (just now) robust. A wider context, for 200 years, our GDP “forgot” to account environmental and social costs, so, the modern economy, the “quality” of GDP is more important than quantity. About pensions, seems every clever modern country knows aging population means less tax income, so they attract working young population (instead of investment immigrants ) to pay tax and work to serve aging population. About housing market, seems the 50% fall in Florida wouldn’t happen in UK whose supply is never over-reacted so far.

[@erongi233]

I would like to suggest another benefit of higher interest rates. Just as productivity fell in 2009 because easy to get money was very cheap because of QE so now money is harder to borrow and more expensive then productivity will rise because you have to be more productive to survive.

[@PazLeBon]

maybe it fell in 2009 cos we had a global crash and lost billions.. just a thought

[@erongi233]

@@PazLeBon maybe not. We lost productivity in 2009 and continue to be far below trend. This means we are producing less efficiently. We are producing less efficiently because we continue to be less efficient. We continue to be less efficient because projects which are profitable at zero interest rates are unprofitable at 5 per cent because they take too much resources to make. Interest rates keep production efficient and productive.

[@PazLeBon]

@@erongi233 lol plus lazy people who dont want to put the phones down for more than ten mns and cant focus for more than 9.

[@Abraham_Tsfaye]

When I was in UK. I saw empty boarded up streets under a constant grey sky, litter everywhere. Homeless people sleeping in doorways. A women with cat whiskers makeup casually walking into Tesco with her pajamas. Opioid addicts out of their mind and women so drunk they urinated on the streets. It's a sad declined country.

[@Georgina705]

I'm so happy I made productive decisions about my finances that changed my life forever,hoping to retire next year... Investment should always be on any creative man's heart for success in life.

[@FranklyHunt]

I know nothing about trading /investment and I'm keen on getting started. What are some strategies to get started?

[@wells7147]

Investors should exercise caution with their exposure and exercise caution when considering new investments, particularly during periods of inflation. It is advisable to seek guidance from a professional or trusted advisor in order to navigate this recession and achieve potential high yields.

[@lea5898]

I'm guided by fergus Waylen an experienced coach with extensive financial market knowledge. While you can consider other options, his strategy has yielded positive results for me. he offers valuable insights, including entry and exit points

[@Richardson238]

Building a good investment portfolio is more complex so I would recommend you seek Waylen's support. This way you can get strategies designed to address your unique goals and financial dreams

[@arktom7335]

Am astonished, think am the only one familiar with fergus Waylen, he handled my account too...

[@bbasleigh6149]

The weakest link being Sterling requires higher interest rates. To follow US interest rates? US with more banks going bust?

[@widebleek8138]

If the rich paid their fair share of taxes would that solve the problems of the U.K. economy?🤔🧐

[@RoniiNN]

No taxens cab fix bad management

[@First_Principals]

Look at wages vs living costs globally.

[@First_Principals]

Rrplace income tax and council tax with land value tax.

[@Andrew-rc3vh]

The first rule for investors is, diversify your investments. Why have it all in bonds? Why not invest in something which has the opposite behaviour to bonds regarding interest rate levels?

[@pip1723]

The uk economy isn't growing the media and the government carry on like it's something to celebrate compared with the US the uk economy is in serious trouble.....

[@cobbler40]

The city and international financiers will keep all the plates spinning whilst the Tories are in power boosting their bonuses. Once they go the plates will crash to the ground.

[@mikeroyce8926]

A few months ago I told someone that I normally have strong opinions about what the government (whichever party is in power) should be doing, but this time I couldn't see any solutions. Now your video is just confirming my pessimism 😢 Will our politicians ever fix social care or social housing?

[@PazLeBon]

All that Russian money tanking in value too :)

[@Aikynbreusov]

Wow, this is Han + Slavic vs Anglo + Saxon

[@dc7279]

Social commentators always cherry pick facts and talk down uk. Uk still worlds 5th largest economy Europe's 2nd. Uks median wealth per adult higher than France and Germany. UK GDP surpassed France Germany since pandemic. Germany dipping in and out of recession and remains weakest jakor economy. London remains worlds major financial market and has prospered post brexit. US japan debt levels far worse than UK etc etc

[@Definetly_not_a_BOT]

I lived in few Europe countries, Japan, now back to the UK for a short time. And I can tell you that in Japan, despite their deflation and other financial concerns people don't have to choose between food or heating. Don't spend 60% or more of their salary in rent, but 30% ( or none if you decide to live in the country side). I am not even going to talk about the quality of food and the social system, or even healthcare, but I could if you want.

[@PazLeBon]

the size of the economy is nothing to do with the wealth and health of the working class

[@Definetly_not_a_BOT]

@@PazLeBon I couldn't agree more, learned it being in Ireland for a while. So if the size of the economy and the GDP are not indicative of the health and wealth of a working population, who values these data and what for?

[@PazLeBon]

@@Definetly_not_a_BOT it's all related to things like interest rate on loans for government projects etc. To cut a long story short it helps to disguise the fact that they can give tax benefits to super wealthy corporatios and justify it as successful beacause our gdp and value is high. But it doesnt give a true picture at all, 20% of people in the uk apparently do not eat 3 meals a day and many have not for 40 years . its actual conservative poltics of the last 50. It will take years for a more socialist party to change thinsg and tough against the wealthy but it can certainly be done if public back it. stoping landlords, tax breaks, farm susidies etc etc etc etc. They could feasibly just give evry home 3k worth of solar panels for the price of that train they just half built . those slar panels would pay for themselves in 1 yeart or so and people would all have more money in thier pocketsd and we would be far more self sufficient. the answers are actually quite blatant when you see through the media rhetoric

[@oldskoolmusicnostalgia]

How on Earth is the average Briton supposed to clap for being 5th in GDP (it's 6th, actually) when that same "leader" barely scrapes the Top 20 for median wages? How much of the wealth you mention consists of inflated housing prices...which end up being detrimental to those that don't own housing? It's amazing to moan about cherry picking then end up posting such a comment!

[@iankuah8606]

Defying gravity? In limbo more like!

[@OptimisticHominid]

Rejoining the EU would be a positive move for the economy.

[@seanphurley]

As a person who lives in the UK and loves the UK and also it's policies protecting consumers and regulating food I have one thing to say. Bite the bullet, negotiate with America, get a trade deal and lock it in. Everything good requires sacrifice and if that means I have to pass their hormone beef in the isle so be it.

[@jontalbot1]

First the UK is a small market so the US is not especially interested. Second the things they want, like exporting their agricultural products and access to the health market are politically complete non starters in the UK. So it will not happen. A more realistic option in this respect is to gradually move closer to the EU, our biggest trading partner and undo the damage of Brexit. In effect that will happen anyway since UK exporters have to comply with EU standards and regs in any case.

[@seanphurley]

@@jontalbot1 the us is interested and has finalized many trade deals recently including with Japan and Australia. Both these countries have given much to secure these trade deals but in return will be relevant for the next few decades when otherwise they might not have. Of course trade with EU and do not jeopardize that. All reasonable people should take for granted EU will be our largest trading partner but we also desperately need more than the EU which would be fragile alone even if it was not in decline. My point is when the opportunity comes, if it presents itself and does not jeaopardise larger trading interests bite the bullet and take the hormone beef

[@jontalbot1]

If they are interested as you claim where is the evidence? Negotiations started in May 2020 but there have been no further meetings since October of the same year. That tells you there is no interest in proceeding

[@seanphurley]

@@jontalbot1 reportedly there are stumbling blocks, the first most bring agricultural policy, which I propose we resolve by capitulating on this one issue like the Japanese and Australians did on some of their most important sticking points and then making sure it sticks. The evidence for the opportunity is the major and recent trade deals they have actually done and the historical statements they have made on the matter and the recent trends towards de-sourcing and friendshoring trade as well as increased bilateral cooperation of late, as well as both nations need for stable consumption and supply bases. Some will disagree others will agree, but we just need two administration's to see mutual profit or at least personal benefit to see it through.

[@PazLeBon]

disgusting sell out of standards right there, maybe get everyone on prescription drugs next and pay for national health in cash?

[@lawrencebishton9071]

u say uk economy u mean just me n her pretty mutch

[@garyb455]

Britain is spending far too much on welfare there needs to be a time limit on how long you get benefits during your lifetime. We have millions who have chosen a lifestyle of doing nothing. We have to stop all immigration immediately and put the ones that are here in tents for the Winter and that along would save £6 million a day. Easy to make savings you just got to be realistic

[@wokelefty]

I agree, get rid of pensions too.

[@mariog1051]

how much would the savings be?

[@OverlandExpedition]

@@wokeleftyGreat idea Einstein, NOT 😂

[@ratttttyyy]

The Tories have doubled the national debt and trashed the economy and public services. Do you think immigrants have taken £700bn from the public purse?

[@jontalbot1]

Crap

[@MichaelFitzpatrick-b9e]

Sunak the clown 🤡