The official figures don't even show the true situation because they don't show the enormous public sector pension liability as part of the debt. When looking at that the UK is effectively in debt to the tune of almost £3 trillion.
@@schrodingerscat1863 i agree. Increasing money supply for Gov expenditure to maintain life style is terrible idea and doom to failure. But gov will find it hard to default as long as boe creates new money for them.
@@allykhan8594 Indeed, money printing is essentially stealing money from everyone that holds the currency as its value falls. But this is not a sustainable model as ultimately those that can move their money away from GBP harming the currencies value further increasing inflation and again a downward spiral occurs.
If you look at some UK infrastructure projects you start to realise the magnitude of the disaster. The failed railway projects alone are just adding mind-boggling debt.
Yes the whole of HS2 must be cancelled. Even if it were completed it would have to be subsidised all it's working life! It is a dead loss generating more losses as long as it exists.
You can't shut something down overnight. That would jar right into depression Imagine millions of public sector workers no longer spending into the private sector
This is madness. Around 1 Trillion of the debt is Government pension where the employees get 26% contribution.....it's unsustainable. I work in the private sector and get the minimum contributions from my employer! We are benefits Britain where hard work is penalised. You are better of pumping out kids and living in a council house
Shows how much you know about how poor people live. The 2-child limit on benefits applies to poor people as well, that's why children poverty is increasing. You've just fallen for Divide and Rule, right? Scapegoat the poor, right? Doesn't matter child poverty is increasing, and kids are going to school hungry, and sometime dirty, because they can't afford the electric to hear water or run the washing machine. Stereotype people who live in council houses, right? The Divide and Rule brainwashing is working. Go to Gary's Economics and look his latest short. Then you'll get the message. If it was so much fun being poor, you wouldn't have working families on minimum wage having to use Food Banks, never mind those on benefits. Just to repeat: nobody gets paid if you have more than 2 kids, even on benefits. Not even child benefit. That's why the Birth rate in this country is below the Replacement Rate. And child poverty is still climbing.
Ahh yes. The UK economic situation is a total disaster. Can’t think why! High taxes, tax and more tax. Massive deficit. Poor relationship with closest trading block destroying business. Productivity per capita not good. Crap infrastructure. High cost of housing. Hardly has success written all over it. It’s only going to get worse. I’d considered setting up a business but it’s just not worth it here.
@@andrewbrazier9664 Don't tell him that, let him believe being in the EU solves everything. It's any country that has adopted Net Zero, or the EU's bureaucracy red tape (Big government) mindset. Places like Poland are growing rapidly and america has been fine all this time (they have different problems). Israel and Singapore doing well as well. Its more about idelogy.
@@dtex_zero sorry that’s a different problem. The UK benefited hugely from being part of the EU. We received large subsidies as well as enjoyed freedom of movement. Ironically the immigration issue has worsened since Brexit since we Brits cannot move and work in other EU countries as easily. Please as said state the benefits as the ones listed on the side of a bus were all hogwash. UK leaving the EU will have negatively impacted member counties too it was a lose lose. The EU countries suffering like America is for a different reason. The west is becoming less of a power in the world and China / Russia / India etc are taking more of a leading position. So by pompously isolating ourselves makes absolutely zero sense. The media in the UK have a lot to answer for.
You forgot to add: unlimited liabilities in the form of barely literate people from all over the world arriving on our shores and having their food, accommodation and living expenses covered by taxpayers.
U.K. has a particular set of problems but bonds are blowing out everywhere, about 6 weeks ago worldwide interest rates hit an inflection point and started to rise everywhere, the end of cheap money, debt now matters. Stagflation for many years ahead.
The older i get, the more i dislike liberal governments. Since 1990s it's got worse and worse, i hate how normal people debate "tories or labour" when they exist in the exact same blairite paradigm that started the decay...
Sorry, but the decay started long before Tony Blair. Go back to Thatcher and her policies. Why do you think she got dumped? It wasn't only the poll tax. She wasted the gains from North Sea Oil, by deindustrialising and Doing bugger all to regenerate the areas affected. They literally only got EU Social Fund Grants. Then when her policies were failing she took payment holidays from the National Insurance Investment Fund, which when the economy started to fail, she and every prime minister until Teresa May, couldn't make up the shortfall. In others words, she created the Waspi Women. She created asset bubbles in housing, by selling off social housing and doing nothing to replace it. She and her successors cut the Welfare Safety link with prices, making pensions and benefits worth less. And as for Blair, he did what Starmer is doing, which is taking advice from the people who broke the economy in 2008, who incidentally were the Tories' biggest donors - bankers. The problem is neoliberal not socialist, and Tony Blair loved being rich. And he just jumped on the bandwagon that was already running. I suggest you subscribe to Economic Help UK RUclips channel, and read the blog, because it might teach you about UK economic History. You obviously are not as knowledgeable as you think by your comment. So, you need to know UK Economic History, and you won't get that from the media or Twitter.
The decay started with Thatcher, when she squandered North Sea oil shut down the mines while putting miners on long term sickness benefits, Her biggest blunder was getting rid of social housing which made sure houses would become to expensive for the young.
Most in my town are lovely law abiding middle aged Africans...but their skills are poor...good at caring etc This won't help productivity...but only ease the deaths of our eldest
@DWbo-r7vI've noticed most are Africans in my town also. Really friendly people. Never had an issue with any migrant workers in my town. I'd trust a polish immigrant over a local any day of the week 😂.
Two things on my mind. Supermarkets are pulling record profits during a cost of living crisis with food costs being the highest contributor. Second point - tax is linear with growth i.e. it is a % and not a flat amount.. we've paid more tax than ever before meaning the government has more money than ever before and yet we are poorer than ever before.. where the hell is the money going and who can we throw in prison for mismanaging it?
And the costs to the government for increasing services is going up faster. The private sector can increase productivity, but most government services cannot. Example- a teacher is needed per class. No productivity increase possible. Actually worse- class sizes have been reduced, auxiliary staff increased, and years in school increased. So, taking a larger share of GDP.
The Tories spaffed £850 billion up the wall from 2020, and increased our debt burden to record levels. Tax covers money that the government has already spent, not what it is about to spend, so blame Sunak, Truss and Kwarteng. Wait a year then add Reeves to the list.
I work in Deloitte. The partners took home £1m each in record profit for 2024 yet they claimed because revenue growth is not as much as expected, there now needs to be cost-cutting measures by freezing staff promotion and ban on non-essential travel and expenses. It's also no coincidence the top CEOs are earning 8-9 digit salaries.
the private sectors producitvity is even lower than before after covid, they have simply choose to milk the cow until its dry and take the piss out of the uks weak goverment stance on businesses shafting consumers on price gorging instead of reinvesting because it looks better for growth stats. shareholder value will be chosen over humanity and we are seeing the results of it real time. but they will switch on the printers everytime so better have some kind of stock to get whatever coins you can before the shows over.
@@scottmyers9850 lol well I could have paid off my mortgage, but decided to take the 10 year as I earn more in interest. With gold going up also it isnt bad for all of us.
Kind of ironic isn’t it, they ‘needed’ the raises to fund public infrastructure, in the end the actions ended up forcing the pound down enough to where the increased revenues are basically redundant because of how many new pounds are needed to buy imports
Latest uk bond sale was 3 X oversubscribed at 4.49%. Expensive for western governments to borrow now. However overall as a country (like most others) we are unable to reduce the overall capital. The last time we were reducing our debt was circa 25 years ago.
Well, just as the left governments dropped billions during the 'vid of the 2020's and then the other lefty government lead by the little hat communist is spending even more
Austerity usually ends up 'backfiring' (in quotes because it;s kind of intended) in that it's like digging up the foundation to build another floor with the materials.
Am I correct in thinking that the bank of england only nominally sets interest rates? That is, if the market takes fright and sells off government bonds that pushes the existing bond yield up. At this point the government could only issue new bonds at that higher rate. Even small movements of interest rates will mean massive increases of debt repayments. To think in the early nineties debt to GDP was only 20%. How far we have fallen.
They set a lending rate to the banks and the free market sets longer term rates, but the central bank can adjust the interest rate on longer term bonds by doing quantitative easing and buying long duration bonds. Typically they will buy the longer term debt to try to force more money to be spent in the stock market or on other assets instead of holding government debt. At least that is approximately how it works.
The death knell of the UK was rung not in 2022 when Liz Truss's budget made the markets have a hissy fit but when the Government locked down the country for the second time. The UK will never recover from the poor decisions made during covid, the ridiculously low Interest rates since 2008 which baled out the indebted whilst shafting the savers. You reap what you sow and the UK electorate voting in weak Tory and Labour governments means we will (within the next 5yrs) require a bale out by the IMF. Then everyone who has savings in the bank will see their savings reduced by 50% or more. Add to that the fact that since 2004 we have imported low grade,low skilled immigrants from the EU Eastern Europe along with illegal migrants which has resulted in minor growth in GDP but a massive ,massive drain on the UK taxpayer which will continue for decades. Add to this that the UK economy will shrink even more than it already has people need to prepare for what is coming. Food,invest your money in anything that will protect it's value (not fiat currencies) defensive measures to protect your family and if at all possible emigrate. The UK is totally and utterly fcuked. All due to low grade managers in charge and mass immigration of low skilled migrants who take far more than they contribute.
0:42 STOP this ivy league propogated obsession with debt : GDP. Let's start talking about debt : wealth ratio. UK has around $30-40T wealth. So the debt : wealth ratio is negligible.
Serious buyers of UK Bonds demanding higher rates against a backdrop of 2 BoE rate cuts and supposedly more coming forward. Does not make sense - clearly there is a loss of confidence in UK plc
@ There’s actually a lot of money and wealth in this country. It’s just very unevenly distributed and the government finds it very hard to extract tax without scaring it abroad. My daughter’s boss just moved to Dubai. Same job, same law company, next to no tax. He is on a seven figure salary.
@@Tailspin80 I have closed my UK Ltd last year and left the UK to SE Asia. UK getting no more tax from me. Much safer and better infrastructure. I got a same day GP appointment last week and it cost me the equivalent of £5.
@@Tailspin80redistribution of wealth is nothing more than communism. If you want that, go to north Korea. The actual issue is the size of the state. As the state grows, inefficiency drops, costs go up. The idea is the you either work for the state or you are dependant on it. Then as a slave you keep voting the socialists in. Welcome to Valenzuela👍🏻
The government are going into debt by "helping families". The reality is when couples separate, it's in the best interest for the female parent to become homeless and self declare abuse - they are rewarded with a lifetime tenancy for 50% of childcare. I realised this in 2019 and went to my MP (Rees Mogg) and queried how that was different from employment... The mother can take the children off the father and earn an income via child maintenance (or paternity tax as it should be called). Mother's are never ACTUALLY homeless - it's merely an application process. The children and their father are then brutalised.
The government is wasting money on initiatives that may not address the country's actual needs, and it's seriously impacting the economy. A prime example is the push for net zero. Minimal Carbon Output: The UK is not a major carbon producer on a global scale, yet the policies suggest otherwise. Insufficient Infrastructure: We lack the necessary infrastructure for widespread EV adoption, including sufficient charging stations, robust power grids, and additional power stations. Shockingly, the UK spends £250 million per month importing electricity from Europe. Road Damage and Costs: Heavier electric vehicles accelerate road wear, necessitating frequent repairs. Moreover, car insurance and road tax have significantly increased due to EVs. The solution? Installing Clean Air Zone (CAZ) cameras at a cost of £60 million to taxpayers. This is baffling, especially given the government's plan to phase out petrol and diesel cars by 2030. Modern combustion cars already produce minimal emissions, so what's the point of them? These poorly thought-out policies reflect the incompetence of those in power. They are driving the country into the ground, seemingly more focused on appeasing their paymasters than serving the public interest.
I like the way the ‘Liz Truss’ crisis (which was engineered by certain parties btw) is now coming back to bite them as it showed that it would not take much to oust an incumbent government if it steps out of line
@ the BoE admitted it triggered the crisis with decisions they made (and were well aware of the LDI issue in pension funds being warned by the CEO of Next in 2019 that it was a crisis awaiting a trigger)
Yup engineered by BoE, the media etc to get Rishi in office. The Japan bond market also took a hit because its an international issue (go look up sept 2022-dec 2022 japan bond markets) However they spun it as Lizz Truss fault. Now heres the kicker its happening again to Reeves but this time there is no spin they are saying 'This is a global problem, look at germany'
Patterns all over the history of technological advancement. Though the middle class want to be more productive for less effort, who is the true executive power inventing something to make the job easier, Britain has a great track record of such laziness/innovation (successive Industrial Revolutions) All we have seen for the last 30 years is a decline in quality, a loss of market share... now China covid and inflation.
Many UK companies do only report to the markets twice a year. Just like these companies, government is of course doing stuff behind the scenes, it's just not making the work public.
I think if anything you are being optimisic. That debt pile was mostly issued on very low coupons, as it's replaced so the delta increases. At least if owner bought it directly and holds it to maturity they won't take a capital loss. Who owns the debt and did they buy it at issue? Well Bank of England owns a huge chunk and they bought above par we the tax payer have to make good their capital loss as it happens, scary. Perhaps even worse, people who don't pay attention let their providers move them into bonds as they get closer to retirement pension, can you imagine just how catastropic that investment call is going to be for those poor people.....
This is the part people aren't talking about. I've been paying more attention to it in the US where back in 2023 exactly this issue contributed heavily to the SVB collapse. There are banks in the UK feeling the pain from this though, STB is an example of a bank that turned to high yield consumer auto financing to make a positive carry against it's underwater bond holdings and ended up getting really badly burned when auto loans were more tightly regulated. It'll be the smaller banks first, there was the buyout of Tesco bank too. Lots of signs of stress. The chickens are coming home to roost.
I’d love Sasha to do an analysis comparing the total public sector workforce costs including pensions, social security, benefit payments etc.. v the private sector tax receipts. I read somewhere that over 50% of the UK adult population are either unemployed, economically inactive, working in the public sector, in education, long term sick etc.. so essentially 1 in 2 people aren’t net contributors to UK plc. Not sure if there is any truth in that, but would be good if anyone can shed any light.
The UK government does not NEED to cover a deficit by issuing bonds, it is a political CHOICE; a bung to the wealthy in the form of a risk free income. If you think back to the pandemic when the media were talking about the government using their overdraft facility at the BoE, that was the government not immediately issuing bonds to cover the whole deficit.
This doesn’t make any sense. The BoE can buy UK govt bonds yes, this is known as QE. But QE is inflationary, they can’t keep doing this forever with no consequences, the £ will end up being worthless. Also bonds aren’t risk free… there’s no 100% guarantee that a govt will be able to pay investors back. That’s why gilt yields are increasing now, investor confidence in UK govt is decreasing and a higher rate is required to attract investors to take on the risk.
@@joshhill971well it’s not really default risk it’s relative to US treasury and EGB including ccy expectations. I.e expectation of inflation devaluing the bonds.
@@joshhill971 The UK government cannot be forced into default in pound sterling denominated debt; it could choose to default but there would be little reason to do so. Bond yields have to compete with the stockmarkets and other investments. If confidence is low people retreat into bonds and yields drop, as confidence increases the bond yields have to increase to compete.
@@danielharman7357 take your point, but if the £ keeps falling while gilt yields are rising then it would suggest people are also losing confidence in the UK’s ability to pay back its debt.
@@edbop The UK govt could choose to borrow endlessly (if the BoE were willing to play ball) but capital flight, hyperinflation and a weakening £ would be the outcome which is a de facto default.
Just on the forecasting front, my guess is the OBR publishes forecast twice a year but monitor it monthly/weekly/daily. Just like a listed company publishes financials twice a year, but internally monitor it daily/weekly/yearly
They dont want to speak about it, but the conflict in Ukraine has been devastating for the UK. The government foolishly guaranteed IMF and World Bank loans to Ukraine, and the BoE is bailing out commercial lenders to Ukraine (now in default). Moreover, they have put a major hole in tax receipts, due both to higher energy costs and UK insurers being told not to provide cover for tankers carrying Russian oil. Investors see this 'black hole' in the UK accounts, which is why they are driving GILT's lower (and therefore borrowing costs higher).
Public sector spending chart: it triggers me on this or any chart when "other" is this biggest proportion. You have all this detail and then there is a big chunk of a graph that says "stuff".
Thank you for pointing out that what Liebour calls "investment" isn’t actually investment at all. It’s simply adding to our day to day costs whilst hiding it under the fiscal rule carpet.
House prices driven up by mass immigration as the demand is forever out stripping the supply Legal net migration 685k last year = 6000 new homes req'd a week mostly squashed into England 😧
In real terms they are at 2003 levels. Most things are always nominally at a record high. Mars bars. Potatoes. Does not mean the market will crash. Does not mean the market won't crash. Just not a very useful data point imho.
@@muratdagdelen8163 6000 new homes req'd a week due to legal net migration at 685k last year. No wonder house prices are at the highest multiple of the average wage ever. Stop concreting over England with housing. Other than for a handful of rich people, low wage employers, developers etc, there's no benefit in ever denser living. When the bucket's full, stop running around looking for more buckets to catch the water. Turn off the tap instead. Stop overburdening our roads, hospitals, schools etc and infrastructure. Start controlling immigration instead. One in one out. We're full
Its not exactly reassuring that most peoples work place pensions/private pensions are split 60/40 stocks to bonds which means 40% of their pensions value is getting decimated due to uk gilts selling off.
I sold all UK bonds and stocks in my ISA/SIPP and went all in on S&P tracker. “For 240 years it's been a terrible mistake to bet against America,” - Buffett.
The market truly dictates rates not the central bank. They're just the ones you think set the rates but it's the pension funds. the buyers includeing international buyers
What Sasha didn't mention is that the Bank Of England began Quantitative Tightening in Nov 2022. This accounts for most of the rise in the 30 year yield. The market reacted some months before it was anticipated.
Exactly. The BOE is sets the rate as the monopoly issuer of sterling, and intervenes with easing or tightening plus the overnight rate to fix the interest rate. The idea that there's a market setting rates is nonsense, except to the extent that the BOE doesn't do it's job and declines to intervene, letting the market rise or fall, but even then, it's the decision of the monopolist to let the rate move. If the Bank set the overnight rate at 0.25 tomorrow, and bought bonds to support that rate, then rates would fall towaras 0.25. There is no market.
Long gone are the days when the Chancellor would put a penny on beer and 10p on tobacco. These days they have to figure out how to extract tax from multinationals like Amazon who make their money in the U.K. but declare the profits in some low tax place like Luxembourg or Ireland. Meanwhile being a regular employee or employee has become a mugs game with tax rates on modest incomes sky high and all sorts of burdensome regulation. Hence the very active black economy of a Turkish barbers, nail bars, fast food joints and phone repair shops whose primary purpose is laundering cash. On the spending side we have an out of control benefits system, an NHS that could swallow the entire GDP if you let it, an aging unproductive population with old age care needs that we can’t pay for… I wouldn’t fancy being the PM!
Give me guys one reason why England should be a prosperous county? Maybe some natural resources? Or technologies? Or enormous men's power? Or geostrategic location?
Reason: British held financial claims upon overseas wealth. There's a lot of people and companies in Britain who own (sometimes indirectly through pensions or other funds) their share of control in companies that own African resources, Bank Loans, Silicon Valley Shares, Japanese car makers etc. Those foreign economies ultimately send their earnings to British companies and people. We gave up the empire, but the empire left behind companies that still own the wealth overseas.
@BenAllen-m2k the ownership of foreign resources and businesses could not benefit the whole country. There are some very few people who profit from that, and they can easily move out from England (and they did already, I'm sure)
I really want to get out, I see the writing on the wall. They’ll have to increase taxes to pay off their debt and it’ll lead to a death spiral. House prices are high here and the older generation who benefited from asset appreciation will be long dead before they have to suffer the consequences of their actions. Whilst having the triple lock and having the non working population continue to get subsidized by those who are working. + age demographics with less workers per retiry
You're exactly correct. Demographics is destiny. The last year the UK had an actual baby boom was 1962. As in 63 years ago! I need options and I need to leave as soon as possible. Every year gets worse, and I'm on a decent salary!
@@jazzsingh9738 It already is. The UK (and much of Europe) is very much "old money". I've seen the alternative reality: the shiny fast new train network in China, the shining lights of Singapore, the heavy tech investment going into Indonesia. It's out there for the taking, this country is literally dying.
Don't forget Gordon Brown 2008 decision to bail out the UK banks. That wholly unnecessary cost is a massive part of the UK's accumulated debt burden, that also needs to be rolled over and serviced.
It wasn’t wholly unnecessary, there was a necessity to bail out banks but it wasn’t the only option. We could’ve let them fail but we would’ve had a much worse recession but maybe better off long term.
Excelent video Sasha. Thanks. How much responsibility has the Bank of England’s current Quantitative Tightening regime (Started before Labour came to power) had on the rise in long dated treasury yields? Your graph shows rising rates from 2022, and since Truss’ time. How much is incompetence by BoE, and how much is intentional? Intentional for what reasons?? How much responsibility does the current Chancellor of the Exchequer really have in this? It all looks like a complete shitshow tbh. Would like to hear your opinion…Thanks.
would it be fair to say that if people paid their fair share of tax borrowing would come down? Do you think closing tax loopholes, such as pensions being used as saving plans for kids and buying agricultural land to avoid inheritance tax would bring borrowing down?
I think sensible people respected there was no magic pill the Labour government could apply to bring a quick change in the economy but the tell was always going to be whether it got slowly better or simply slowed the pain. It seems they are doing the latter !!
@@ericwalmsley6836 I have to be honest and I say that I wasn't expecting them to be as suicidal in their early policy choices despite the first six months being the best time for it. Perfect example being the winter fuel payment, it could have been more targeted for sure but what they could have done was used the saving to end the child benefit cap because added to the increase in minimum bus fares that would pretty much cover the cost. I didn't have a lot of faith to start but it is being stripped away quickly !!
The debt situation in the US is much worse than the UK because they can "afford it" due to having the world's reserve currency. US economy looks better on paper because their government spending deficit is massive compared to the UK's. Additionally, their debt is much more short term so its rolling over at higher rates faster than UK debt. To be sure, both countries are screwed but saying the UK debt situation is worse is false IMO.
13:28 is this realistic? Majority of debt is on way lower interest rates. Only most recent tranches are on higher rates. I agree with wider point but, saying all debt on higher rates is unrealistic. Latest sale was only 4B
I wouldn't buy 30 year UK debt with my enemies money. You are 100% getting paid back in confetti in 30 freaking years. These longer dated bonds have massive duration risk regarding future inflation. The short-term debt markets these central bank control are an entirely different debt market with zero duration risk. The Bank of England and the FED are losing control.
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“Hey guys, Sasha here, the UK is fucked, see you next week”
pretty much
the slow descent into catastrophe, not like he's wrong
Rinse and repeat
@zenastronomy I agree
“Join me next week to see how much worse it can get”
At this point, the UK is going to default. It’s got a huge spending problem. Decades of rot is about to collapse the building
BOE is 1 the main guilt buyers so hard to defsult, But gbp devaluation is for sure!
The official figures don't even show the true situation because they don't show the enormous public sector pension liability as part of the debt. When looking at that the UK is effectively in debt to the tune of almost £3 trillion.
@@allykhan8594 BOE buying debt is essentially printing money (QE) which is the main reason we have such high inflation.
@@schrodingerscat1863 i agree. Increasing money supply for Gov expenditure to maintain life style is terrible idea and doom to failure. But gov will find it hard to default as long as boe creates new money for them.
@@allykhan8594 Indeed, money printing is essentially stealing money from everyone that holds the currency as its value falls. But this is not a sustainable model as ultimately those that can move their money away from GBP harming the currencies value further increasing inflation and again a downward spiral occurs.
24 hours after this video and this is all over MSM. Well done for calling it early.
What's all over? Let me know as I'm watching this now
@@bangdobrichIt means shortly after this video went up, the mainstream media (MSM) is covering the same news.
If you look at some UK infrastructure projects you start to realise the magnitude of the disaster. The failed railway projects alone are just adding mind-boggling debt.
Yes the whole of HS2 must be cancelled. Even if it were completed it would have to be subsidised all it's working life! It is a dead loss generating more losses as long as it exists.
All of those government departments should be shut down, total waste of money
But how will we survive without the Institute for Studies?
You can't shut something down overnight.
That would jar right into depression
Imagine millions of public sector workers no longer spending into the private sector
‘Won’t someone think of the bureaucrats!’
1 civil servant per 131 people in UK. That does not include the NHS, teachers, local Government.
Working ppl pay around a billion pound every working day in tax last year how they can’t run a country with that is kinda mad
This is madness. Around 1 Trillion of the debt is Government pension where the employees get 26% contribution.....it's unsustainable. I work in the private sector and get the minimum contributions from my employer! We are benefits Britain where hard work is penalised. You are better of pumping out kids and living in a council house
Shows how much you know about how poor people live. The 2-child limit on benefits applies to poor people as well, that's why children poverty is increasing. You've just fallen for Divide and Rule, right? Scapegoat the poor, right? Doesn't matter child poverty is increasing, and kids are going to school hungry, and sometime dirty, because they can't afford the electric to hear water or run the washing machine. Stereotype people who live in council houses, right? The Divide and Rule brainwashing is working. Go to Gary's Economics and look his latest short. Then you'll get the message. If it was so much fun being poor, you wouldn't have working families on minimum wage having to use Food Banks, never mind those on benefits. Just to repeat: nobody gets paid if you have more than 2 kids, even on benefits. Not even child benefit. That's why the Birth rate in this country is below the Replacement Rate. And child poverty is still climbing.
Exactly, they never take account of public sector pension liability but it is still a debt and as these pensions are index linked has interest.
We need to leave!
Except the council housing stock is much smaller now compared to need.
Do treat yourself up about it. Go with the flow, leave the private sector and join the public sector, that's what I did and I never looked back
I was under the impression that Ponzi schemes were illegal but obviously not at government level.
The UK economy is effectively one giant mass migration fuelled population Ponzi scheme.
Bernie Madoff said he got the idea for his Ponzi by watching the US government.
You’re learning son, fiat is the biggest ponzi there is. Buy Bitcoin.
😂
Ahh yes. The UK economic situation is a total disaster. Can’t think why! High taxes, tax and more tax. Massive deficit. Poor relationship with closest trading block destroying business. Productivity per capita not good. Crap infrastructure. High cost of housing. Hardly has success written all over it. It’s only going to get worse. I’d considered setting up a business but it’s just not worth it here.
Relative to the 60s... The obvious taxation is rather low.... The Stealth taxation and inflation not talked about is what is problematic
Similar problems across many Western countries Eg Australia, Canada & Germany.
@@andrewbrazier9664 Don't tell him that, let him believe being in the EU solves everything.
It's any country that has adopted Net Zero, or the EU's bureaucracy red tape (Big government) mindset. Places like Poland are growing rapidly and america has been fine all this time (they have different problems).
Israel and Singapore doing well as well. Its more about idelogy.
@@dtex_zero sorry that’s a different problem. The UK benefited hugely from being part of the EU. We received large subsidies as well as enjoyed freedom of movement. Ironically the immigration issue has worsened since Brexit since we Brits cannot move and work in other EU countries as easily. Please as said state the benefits as the ones listed on the side of a bus were all hogwash. UK leaving the EU will have negatively impacted member counties too it was a lose lose. The EU countries suffering like America is for a different reason. The west is becoming less of a power in the world and China / Russia / India etc are taking more of a leading position. So by pompously isolating ourselves makes absolutely zero sense. The media in the UK have a lot to answer for.
You forgot to add: unlimited liabilities in the form of barely literate people from all over the world arriving on our shores and having their food, accommodation and living expenses covered by taxpayers.
U.K. has a particular set of problems but bonds are blowing out everywhere, about 6 weeks ago worldwide interest rates hit an inflection point and started to rise everywhere, the end of cheap money, debt now matters. Stagflation for many years ahead.
The older i get, the more i dislike liberal governments.
Since 1990s it's got worse and worse, i hate how normal people debate "tories or labour" when they exist in the exact same blairite paradigm that started the decay...
and when you criticize one camp, they automatically assume that you are siding for the other side of the coin
Sorry, but the decay started long before Tony Blair. Go back to Thatcher and her policies. Why do you think she got dumped? It wasn't only the poll tax. She wasted the gains from North Sea Oil, by deindustrialising and Doing bugger all to regenerate the areas affected. They literally only got EU Social Fund Grants. Then when her policies were failing she took payment holidays from the National Insurance Investment Fund, which when the economy started to fail, she and every prime minister until Teresa May, couldn't make up the shortfall. In others words, she created the Waspi Women. She created asset bubbles in housing, by selling off social housing and doing nothing to replace it. She and her successors cut the Welfare Safety link with prices, making pensions and benefits worth less. And as for Blair, he did what Starmer is doing, which is taking advice from the people who broke the economy in 2008, who incidentally were the Tories' biggest donors - bankers. The problem is neoliberal not socialist, and Tony Blair loved being rich. And he just jumped on the bandwagon that was already running. I suggest you subscribe to Economic Help UK RUclips channel, and read the blog, because it might teach you about UK economic History. You obviously are not as knowledgeable as you think by your comment. So, you need to know UK Economic History, and you won't get that from the media or Twitter.
They are d@#£ heads.
How was the saying... If one is young and not liberal, they have no heart. If you gets older and remains liberal, one is and idiot.
The decay started with Thatcher, when she squandered North Sea oil shut down the mines while putting miners on long term sickness benefits, Her biggest blunder was getting rid of social housing which made sure houses would become to expensive for the young.
Bu Bu Bu But we have 3 million new immigrants who are supposed to grow the economy…I'm sure that’s what we were told.
Most in my town are lovely law abiding middle aged Africans...but their skills are poor...good at caring etc
This won't help productivity...but only ease the deaths of our eldest
Behold the army of Deliveroo drivers!
@DWbo-r7vI've noticed most are Africans in my town also. Really friendly people. Never had an issue with any migrant workers in my town. I'd trust a polish immigrant over a local any day of the week 😂.
Two things on my mind. Supermarkets are pulling record profits during a cost of living crisis with food costs being the highest contributor. Second point - tax is linear with growth i.e. it is a % and not a flat amount.. we've paid more tax than ever before meaning the government has more money than ever before and yet we are poorer than ever before.. where the hell is the money going and who can we throw in prison for mismanaging it?
And the costs to the government for increasing services is going up faster. The private sector can increase productivity, but most government services cannot. Example- a teacher is needed per class. No productivity increase possible. Actually worse- class sizes have been reduced, auxiliary staff increased, and years in school increased. So, taking a larger share of GDP.
Ever heard of word corruption
The Tories spaffed £850 billion up the wall from 2020, and increased our debt burden to record levels. Tax covers money that the government has already spent, not what it is about to spend, so blame Sunak, Truss and Kwarteng. Wait a year then add Reeves to the list.
I work in Deloitte. The partners took home £1m each in record profit for 2024 yet they claimed because revenue growth is not as much as expected, there now needs to be cost-cutting measures by freezing staff promotion and ban on non-essential travel and expenses. It's also no coincidence the top CEOs are earning 8-9 digit salaries.
the private sectors producitvity is even lower than before after covid, they have simply choose to milk the cow until its dry and take the piss out of the uks weak goverment stance on businesses shafting consumers on price gorging instead of reinvesting because it looks better for growth stats. shareholder value will be chosen over humanity and we are seeing the results of it real time. but they will switch on the printers everytime so better have some kind of stock to get whatever coins you can before the shows over.
well looks like my 10 year 3.05 percent mortgage was a good decision.
the screw up started in 2008 when they decided to bail out the banks.
Jealous. I'm on 1.54% currently and I renew in January 2026 😢
@@scottmyers9850 lol well I could have paid off my mortgage, but decided to take the 10 year as I earn more in interest. With gold going up also it isnt bad for all of us.
Living standards are about to take yet another hit in the UK.
Extreme Political turmoil to folloiw
Brilliantly explained! Need you in the curriculum!
What a disaster.
Raising Employer's Nics, Business Rates and Stamp Duty was very foolish.
Not just foolish it is suicidal.
How else can they line their own pockets
Kind of ironic isn’t it, they ‘needed’ the raises to fund public infrastructure, in the end the actions ended up forcing the pound down enough to where the increased revenues are basically redundant because of how many new pounds are needed to buy imports
@schrodingerscat1863 Yes. I considered using suicidal. Or catastrophic.
Latest uk bond sale was 3 X oversubscribed at 4.49%.
Expensive for western governments to borrow now.
However overall as a country (like most others) we are unable to reduce the overall capital.
The last time we were reducing our debt was circa 25 years ago.
I'd be up for protesting about this but it means risking 4 years in jail for having the wrong sign or for saying hello to the police etc.
Incompetence is baked in. Thank you for your video.
I’m so glad austerity sorted out all our debts, it was totally worth it.
Well, just as the left governments dropped billions during the 'vid of the 2020's and then the other lefty government lead by the little hat communist is spending even more
Austerity usually ends up 'backfiring' (in quotes because it;s kind of intended) in that it's like digging up the foundation to build another floor with the materials.
Am I correct in thinking that the bank of england only nominally sets interest rates? That is, if the market takes fright and sells off government bonds that pushes the existing bond yield up. At this point the government could only issue new bonds at that higher rate. Even small movements of interest rates will mean massive increases of debt repayments. To think in the early nineties debt to GDP was only 20%. How far we have fallen.
They set a lending rate to the banks and the free market sets longer term rates, but the central bank can adjust the interest rate on longer term bonds by doing quantitative easing and buying long duration bonds. Typically they will buy the longer term debt to try to force more money to be spent in the stock market or on other assets instead of holding government debt. At least that is approximately how it works.
you said one lie:
"we are a serious modern country"
my bad 😭🙀
Yet more great content. Thanks Sacha
And they're still giving away £billions to other countries 🤔
The death knell of the UK was rung not in 2022 when Liz Truss's budget made the markets have a hissy fit but when the Government locked down the country for the second time. The UK will never recover from the poor decisions made during covid, the ridiculously low Interest rates since 2008 which baled out the indebted whilst shafting the savers. You reap what you sow and the UK electorate voting in weak Tory and Labour governments means we will (within the next 5yrs) require a bale out by the IMF. Then everyone who has savings in the bank will see their savings reduced by 50% or more.
Add to that the fact that since 2004 we have imported low grade,low skilled immigrants from the EU Eastern Europe along with illegal migrants which has resulted in minor growth in GDP but a massive ,massive drain on the UK taxpayer which will continue for decades. Add to this that the UK economy will shrink even more than it already has people need to prepare for what is coming. Food,invest your money in anything that will protect it's value (not fiat currencies) defensive measures to protect your family and if at all possible emigrate. The UK is totally and utterly fcuked. All due to low grade managers in charge and mass immigration of low skilled migrants who take far more than they contribute.
What the UK really needs is less public sector. We seem to be the only place that government tech upgrades end up needing MORE civil servants!
" The problem with socialism is that you eventually run out of other people's money "
- Margaret Thatcher -
Yeah, let's quote Thatcher, the women who utterly destroyed this country... meanwhile, Socialism in China...
Isn't that the same for capitalism as well. If other people run out of money, you're screwed.
well thatcher sold everything off to bail her out, there's has been nothing left since
@@Andygb78 in capitalism computers and robots will eventually create the products, in socialism you'll just end up looking in trash bins.
capitalists love to project their sins onto socialists
0:42 STOP this ivy league propogated obsession with debt : GDP. Let's start talking about debt : wealth ratio. UK has around $30-40T wealth. So the debt : wealth ratio is negligible.
The govt doesn't really borrow money. It creates it. Money is a note of govt debt that is cancelled by taxation.
According to MMT ideology
Serious buyers of UK Bonds demanding higher rates against a backdrop of 2 BoE rate cuts and supposedly more coming forward. Does not make sense - clearly there is a loss of confidence in UK plc
My contempt for the state is infinite.
Nevertheless you need to live in a country with law, order and infrastructure. Just look at countries like Somalia.
@ thats exactly where we are headed👍🏻
@ There’s actually a lot of money and wealth in this country. It’s just very unevenly distributed and the government finds it very hard to extract tax without scaring it abroad. My daughter’s boss just moved to Dubai. Same job, same law company, next to no tax. He is on a seven figure salary.
@@Tailspin80 I have closed my UK Ltd last year and left the UK to SE Asia. UK getting no more tax from me. Much safer and better infrastructure. I got a same day GP appointment last week and it cost me the equivalent of £5.
@@Tailspin80redistribution of wealth is nothing more than communism. If you want that, go to north Korea. The actual issue is the size of the state.
As the state grows, inefficiency drops, costs go up.
The idea is the you either work for the state or you are dependant on it. Then as a slave you keep voting the socialists in.
Welcome to Valenzuela👍🏻
Not much point getting 4.5% interest on your 10 year treasuries if the average annual devaluation of the £ is 5%
HEY I KNOW!! let’s give the rich even more freebies, unfunded tax cuts and dodgy under-the-table deals!
The government are going into debt by "helping families".
The reality is when couples separate, it's in the best interest for the female parent to become homeless and self declare abuse - they are rewarded with a lifetime tenancy for 50% of childcare.
I realised this in 2019 and went to my MP (Rees Mogg) and queried how that was different from employment...
The mother can take the children off the father and earn an income via child maintenance (or paternity tax as it should be called).
Mother's are never ACTUALLY homeless - it's merely an application process. The children and their father are then brutalised.
What did Rees Mogg say?
Wow you must have had a bitter breakup...
What a bitter man, she is better off without you
@@lubumbashi6666 nah, it's pretty standard for the majority of men.
The government is wasting money on initiatives that may not address the country's actual needs, and it's seriously impacting the economy. A prime example is the push for net zero.
Minimal Carbon Output: The UK is not a major carbon producer on a global scale, yet the policies suggest otherwise.
Insufficient Infrastructure: We lack the necessary infrastructure for widespread EV adoption, including sufficient charging stations, robust power grids, and additional power stations. Shockingly, the UK spends £250 million per month importing electricity from Europe.
Road Damage and Costs: Heavier electric vehicles accelerate road wear, necessitating frequent repairs. Moreover, car insurance and road tax have significantly increased due to EVs.
The solution? Installing Clean Air Zone (CAZ) cameras at a cost of £60 million to taxpayers. This is baffling, especially given the government's plan to phase out petrol and diesel cars by 2030. Modern combustion cars already produce minimal emissions, so what's the point of them?
These poorly thought-out policies reflect the incompetence of those in power. They are driving the country into the ground, seemingly more focused on appeasing their paymasters than serving the public interest.
💯
Don't worry, those cameras will still be working when everyone has to drive an EV. They'll dream up another excuse to impose tax on that.
I like the way the ‘Liz Truss’ crisis (which was engineered by certain parties btw) is now coming back to bite them as it showed that it would not take much to oust an incumbent government if it steps out of line
How do you engineer a bunch of traders to do politics, it makes no sense.
@ the BoE admitted it triggered the crisis with decisions they made (and were well aware of the LDI issue in pension funds being warned by the CEO of Next in 2019 that it was a crisis awaiting a trigger)
@@edc1569depends who those 'traders' are
yes borrowing higher now than when truss was pm
Yup engineered by BoE, the media etc to get Rishi in office.
The Japan bond market also took a hit because its an international issue (go look up sept 2022-dec 2022 japan bond markets)
However they spun it as Lizz Truss fault. Now heres the kicker its happening again to Reeves but this time there is no spin they are saying
'This is a global problem, look at germany'
Patterns all over the history of technological advancement. Though the middle class want to be more productive for less effort, who is the true executive power inventing something to make the job easier, Britain has a great track record of such laziness/innovation (successive Industrial Revolutions) All we have seen for the last 30 years is a decline in quality, a loss of market share... now China covid and inflation.
Many UK companies do only report to the markets twice a year. Just like these companies, government is of course doing stuff behind the scenes, it's just not making the work public.
Country has gone! Absolute dump
Misruled over in perpetuity by an endless procession of incompetent criminals who always manage to fall upwards.
Welcome to these Wretched Isles.
A very sick joke indeed 🤢
I think if anything you are being optimisic. That debt pile was mostly issued on very low coupons, as it's replaced so the delta increases. At least if owner bought it directly and holds it to maturity they won't take a capital loss. Who owns the debt and did they buy it at issue? Well Bank of England owns a huge chunk and they bought above par we the tax payer have to make good their capital loss as it happens, scary. Perhaps even worse, people who don't pay attention let their providers move them into bonds as they get closer to retirement pension, can you imagine just how catastropic that investment call is going to be for those poor people.....
This is the part people aren't talking about. I've been paying more attention to it in the US where back in 2023 exactly this issue contributed heavily to the SVB collapse. There are banks in the UK feeling the pain from this though, STB is an example of a bank that turned to high yield consumer auto financing to make a positive carry against it's underwater bond holdings and ended up getting really badly burned when auto loans were more tightly regulated. It'll be the smaller banks first, there was the buyout of Tesco bank too. Lots of signs of stress. The chickens are coming home to roost.
Well put and explained, the criminal government supporting the criminals in the markets, all fleecing the peasants
I’d love Sasha to do an analysis comparing the total public sector workforce costs including pensions, social security, benefit payments etc.. v the private sector tax receipts. I read somewhere that over 50% of the UK adult population are either unemployed, economically inactive, working in the public sector, in education, long term sick etc.. so essentially 1 in 2 people aren’t net contributors to UK plc. Not sure if there is any truth in that, but would be good if anyone can shed any light.
Well 20% of the population is of pensionable age so 50% for all those categories sounds about right
@ that doesn’t really seem sustainable to me, if true, but not sure how that compares to other advanced economies. Is it the norm or an outlier?
Congrats on the new channel!
I retired to Portugal. 🇵🇹 Highly recommended
It’s funny how companies are required to do quarterly reports but the government just does biannually
The UK government does not NEED to cover a deficit by issuing bonds, it is a political CHOICE; a bung to the wealthy in the form of a risk free income. If you think back to the pandemic when the media were talking about the government using their overdraft facility at the BoE, that was the government not immediately issuing bonds to cover the whole deficit.
This doesn’t make any sense.
The BoE can buy UK govt bonds yes, this is known as QE. But QE is inflationary, they can’t keep doing this forever with no consequences, the £ will end up being worthless.
Also bonds aren’t risk free… there’s no 100% guarantee that a govt will be able to pay investors back. That’s why gilt yields are increasing now, investor confidence in UK govt is decreasing and a higher rate is required to attract investors to take on the risk.
@@joshhill971well it’s not really default risk it’s relative to US treasury and EGB including ccy expectations. I.e expectation of inflation devaluing the bonds.
@@joshhill971 The UK government cannot be forced into default in pound sterling denominated debt; it could choose to default but there would be little reason to do so. Bond yields have to compete with the stockmarkets and other investments. If confidence is low people retreat into bonds and yields drop, as confidence increases the bond yields have to increase to compete.
@@danielharman7357 take your point, but if the £ keeps falling while gilt yields are rising then it would suggest people are also losing confidence in the UK’s ability to pay back its debt.
@@edbop The UK govt could choose to borrow endlessly (if the BoE were willing to play ball) but capital flight, hyperinflation and a weakening £ would be the outcome which is a de facto default.
Well explained. Important stuff to understand, not always the easiest to understand (for me). Thanks and all the best with you channel. Subbed
Thank you!
GOLD... I love your perspective on reporting.
11.04 just hit the nail on the head. We are not at alone, political lag has always been there. Hence why bonds are flying, they are ahead of the curve
Just on the forecasting front, my guess is the OBR publishes forecast twice a year but monitor it monthly/weekly/daily. Just like a listed company publishes financials twice a year, but internally monitor it daily/weekly/yearly
Huge Recession around the corner, 2008 financial crisis will be a walk in the part compared to what will come
They dont want to speak about it, but the conflict in Ukraine has been devastating for the UK. The government foolishly guaranteed IMF and World Bank loans to Ukraine, and the BoE is bailing out commercial lenders to Ukraine (now in default). Moreover, they have put a major hole in tax receipts, due both to higher energy costs and UK insurers being told not to provide cover for tankers carrying Russian oil. Investors see this 'black hole' in the UK accounts, which is why they are driving GILT's lower (and therefore borrowing costs higher).
I wish you are the success you clearly deserve. Good Luck
Public sector spending chart: it triggers me on this or any chart when "other" is this biggest proportion. You have all this detail and then there is a big chunk of a graph that says "stuff".
Oh yeah. The classic "Other" that somehow doesn't fall under ANY of the major spend categories is always a winner with the bureaucrats!
@@SashaTakesOnUK I would love a sitcom called the Ministry of Other.
Thank you for pointing out that what Liebour calls "investment" isn’t actually investment at all. It’s simply adding to our day to day costs whilst hiding it under the fiscal rule carpet.
They will crank up the printing presses once more.
House Prices are at record high. No need to worry at all.
House prices driven up by mass immigration as the demand is forever out stripping the supply
Legal net migration 685k last year = 6000 new homes req'd a week mostly squashed into England 😧
In real terms they are at 2003 levels. Most things are always nominally at a record high. Mars bars. Potatoes. Does not mean the market will crash. Does not mean the market won't crash. Just not a very useful data point imho.
You are very wrong!
@@muratdagdelen8163 6000 new homes req'd a week due to legal net migration at 685k last year. No wonder house prices are at the highest multiple of the average wage ever.
Stop concreting over England with housing. Other than for a handful of rich people, low wage employers, developers etc, there's no benefit in ever denser living.
When the bucket's full, stop running around looking for more buckets to catch the water. Turn off the tap instead.
Stop overburdening our roads, hospitals, schools etc and infrastructure. Start controlling immigration instead. One in one out. We're full
Great video tells us what is actually going on with the economy.
2010 - UK National Debt was £1 trillion
2014 - UK National Debt £2.9 trillion
Guess who borrowed that
No.
2010: £ 1,6136T
2014: £ 1,9533T
That was Cameron
2024: ~£ 2,583T
That was Cameron, Johnson, etc (Brexit)
@@Michiel_de_JongDon't forget Covid
Please make a video on the UK’s national grid and how UK’s net zero targets are fucking the country up
The main bond holder of the UK is the Bank of England. Forget it!
Ahh that explains the drop in the stock market today.
Well @SashaTakesOnUK you called it, this is tip of the BBC news coverage today.
When you have to pay interests for the past instead of investing in the future...
Its not exactly reassuring that most peoples work place pensions/private pensions are split 60/40 stocks to bonds which means 40% of their pensions value is getting decimated due to uk gilts selling off.
I sold all UK bonds and stocks in my ISA/SIPP and went all in on S&P tracker. “For 240 years it's been a terrible mistake to bet against America,” - Buffett.
The market truly dictates rates not the central bank. They're just the ones you think set the rates but it's the pension funds. the buyers includeing international buyers
So what is it that has changed in the UK so much over the past 20 years or so that has run up all this UK gov debt?
Spot on analysis, cheers 🍻
What Sasha didn't mention is that the Bank Of England began Quantitative Tightening in Nov 2022. This accounts for most of the rise in the 30 year yield. The market reacted some months before it was anticipated.
Exactly. The BOE is sets the rate as the monopoly issuer of sterling, and intervenes with easing or tightening plus the overnight rate to fix the interest rate. The idea that there's a market setting rates is nonsense, except to the extent that the BOE doesn't do it's job and declines to intervene, letting the market rise or fall, but even then, it's the decision of the monopolist to let the rate move.
If the Bank set the overnight rate at 0.25 tomorrow, and bought bonds to support that rate, then rates would fall towaras 0.25. There is no market.
@BenAllen-m2k The BoE have influence but not 100% control of the yield.
the BOE tea girl is on the case. we can all relax.
In my mind Fixing Hospitals/Roads is day to day spending, but building new roads and hospitals is investment.
Roads can reduce congestion but they're not an investment. The most roads you have the more roads you have to maintain.
@@6581punkRoads are relatively cheap to maintain though and they help get employees to work and goods to market (productivity gains).
Of course roads are an investment, it’s infrastructure. Why do you think countries build roads?
Truss was coup'd by the BOE in favour of Sunak and now we have Rachel from complaints. Anyone else think this isn't by accident?
Long gone are the days when the Chancellor would put a penny on beer and 10p on tobacco. These days they have to figure out how to extract tax from multinationals like Amazon who make their money in the U.K. but declare the profits in some low tax place like Luxembourg or Ireland. Meanwhile being a regular employee or employee has become a mugs game with tax rates on modest incomes sky high and all sorts of burdensome regulation. Hence the very active black economy of a Turkish barbers, nail bars, fast food joints and phone repair shops whose primary purpose is laundering cash.
On the spending side we have an out of control benefits system, an NHS that could swallow the entire GDP if you let it, an aging unproductive population with old age care needs that we can’t pay for… I wouldn’t fancy being the PM!
Give me guys one reason why England should be a prosperous county? Maybe some natural resources? Or technologies? Or enormous men's power? Or geostrategic location?
England should be poor, Scotland should be rich. Sadly England drags Scotland down
Reason: British held financial claims upon overseas wealth. There's a lot of people and companies in Britain who own (sometimes indirectly through pensions or other funds) their share of control in companies that own African resources, Bank Loans, Silicon Valley Shares, Japanese car makers etc.
Those foreign economies ultimately send their earnings to British companies and people.
We gave up the empire, but the empire left behind companies that still own the wealth overseas.
@BenAllen-m2k the ownership of foreign resources and businesses could not benefit the whole country. There are some very few people who profit from that, and they can easily move out from England (and they did already, I'm sure)
I really want to get out, I see the writing on the wall. They’ll have to increase taxes to pay off their debt and it’ll lead to a death spiral. House prices are high here and the older generation who benefited from asset appreciation will be long dead before they have to suffer the consequences of their actions. Whilst having the triple lock and having the non working population continue to get subsidized by those who are working. + age demographics with less workers per retiry
You're exactly correct. Demographics is destiny. The last year the UK had an actual baby boom was 1962. As in 63 years ago! I need options and I need to leave as soon as possible. Every year gets worse, and I'm on a decent salary!
Very fair assessment and exactly how I feel. It literally is a downward spiral. The rest of the world will leave us behind!
@@jazzsingh9738 It already is. The UK (and much of Europe) is very much "old money". I've seen the alternative reality: the shiny fast new train network in China, the shining lights of Singapore, the heavy tech investment going into Indonesia. It's out there for the taking, this country is literally dying.
Don't forget Gordon Brown 2008 decision to bail out the UK banks. That wholly unnecessary cost is a massive part of the UK's accumulated debt burden, that also needs to be rolled over and serviced.
It wasn’t wholly unnecessary, there was a necessity to bail out banks but it wasn’t the only option. We could’ve let them fail but we would’ve had a much worse recession but maybe better off long term.
Very well explained great video
Shows you how inept All these u.k Gov's are!!
Crazy Debt !
Total Madness !
Excelent video Sasha. Thanks. How much responsibility has the Bank of England’s current Quantitative Tightening regime (Started before Labour came to power) had on the rise in long dated treasury yields? Your graph shows rising rates from 2022, and since Truss’ time. How much is incompetence by BoE, and how much is intentional? Intentional for what reasons?? How much responsibility does the current Chancellor of the Exchequer really have in this? It all looks like a complete shitshow tbh. Would like to hear your opinion…Thanks.
75% of the increase was not Liss Truss.
would it be fair to say that if people paid their fair share of tax borrowing would come down? Do you think closing tax loopholes, such as pensions being used as saving plans for kids and buying agricultural land to avoid inheritance tax would bring borrowing down?
The US bonds show the same high interest.
If you just said the UK economy is circling the drain, that’d cover it.
I think sensible people respected there was no magic pill the Labour government could apply to bring a quick change in the economy but the tell was always going to be whether it got slowly better or simply slowed the pain. It seems they are doing the latter !!
I think sensible people knew they’d make it much worse 😂 they always do 😂
If anything, they're accelerating the pain.
@@ericwalmsley6836 I have to be honest and I say that I wasn't expecting them to be as suicidal in their early policy choices despite the first six months being the best time for it.
Perfect example being the winter fuel payment, it could have been more targeted for sure but what they could have done was used the saving to end the child benefit cap because added to the increase in minimum bus fares that would pretty much cover the cost.
I didn't have a lot of faith to start but it is being stripped away quickly !!
If you decide to house the world…what could go wrong.
QT. What do you expect?
the system is dead, they only have infinite money printing left
The debt situation in the US is much worse than the UK because they can "afford it" due to having the world's reserve currency.
US economy looks better on paper because their government spending deficit is massive compared to the UK's. Additionally, their debt is much more short term so its rolling over at higher rates faster than UK debt.
To be sure, both countries are screwed but saying the UK debt situation is worse is false IMO.
Printing currency and spending it is not investment
Another great vid thanks Sasha, however with all that bad news, l'm surprised you only scored 1 on the 'F**k-Ometer'!😜
Gotta keep it contained to let the new channel be shown to some new viewers!!!
@@SashaTakesOnUK must be hard to do that with all the crap this Gov are creating with their financial & economic policies!!
Scary stuff...if it was a business you would just declare bankruptcy.
13:28 is this realistic? Majority of debt is on way lower interest rates. Only most recent tranches are on higher rates. I agree with wider point but, saying all debt on higher rates is unrealistic. Latest sale was only 4B
I wouldn't buy 30 year UK debt with my enemies money. You are 100% getting paid back in confetti in 30 freaking years. These longer dated bonds have massive duration risk regarding future inflation. The short-term debt markets these central bank control are an entirely different debt market with zero duration risk. The Bank of England and the FED are losing control.
I tried to warn them 20 years ago. But they are the experts so they know better.
"I just don’t understand it."
And so say all of us Sasha. These people are monumentally thick. And they’re in charge.
Definitions are always flexible
Yikes we really are not in a good place. Brilliant content as usual Sasha.
Thanks!
It's no £2.8 Trillion it's more as they don't account for pension liabilities and other stuff BTW it's closer to 12..4 Trillion
By by UK what a clown show. Absolutely the best analysis on the clown car economy of the UK