The UK's Economic Nightmares Explained

the United Kingdom is currently the world's sixth richest country but they're headed for what could be a very serious recession food and energy prices are rising quickly and inflation is up 19 what could be contributing to Britain's having less buying power today than they did 15 years ago the UK finds itself in an interesting series of events that have led to their current crisis food prices

have inflated 19 percent with certain products like olive oil sugar and eggs rising over 40 percent the price of bread has risen 18.9 percent and butter has risen 22.7 percent this is the highest rise in prices in Great Britain in 45 years and its cause has a myriad of factors the value of the food hasn't risen but the cost of production has in 2021 after a

period of record low gas prices in Europe prices began to rise as a rapid rebound took place due to Industries like travel and Hospitality requiring more energy coveted lockdown restrictions by December of 2021 gas prices had risen over 180 percent and 28 energy companies shut down operations in the UK affecting more than 2 million citizens the war in the Ukraine didn't make energy matters for Britain

any better conflict between Russia and Ukraine indirectly affected the UK's gas pipeline although the UK did not directly receive gas imports from Russia the fact that Russia was reducing their exports to other countries to support the war efforts cause scarcity and increased gas prices prior to the war with the Ukraine the UK got its gas from Norway the U.S and Russia however as a result they

had to depend more heavily on the latter Partners the DraStic rise in fuel prices increased the price of farming tilling planting watering harvesting all processes of produce farming rely on gas equipment Farmers aren't really making much of a profit either as as the cost to grow is almost as much as what they're paid for produce Dairy and meat the price of fuel also increases the price

of transportation and Logistics of food not to mention freezing and Refrigeration the entire supply chain of food production is greatly affected by Rising fuel costs supermarkets aren't paying enough to the farmers to make it worth their while to produce and a lot of them simply have stopped producing labor shortages increased costs and diminished returns all factor into many farmers deciding to stop farming altogether Rising costs

of fuel have led to Rising costs of food Rising costs of food have led to Consumers feeling the pinch at the cash register not to mention these consumers feel the pain of increasing energy bills themselves as the UK Parliament has had to step in and issue temporary annual price limits on energy utilities so that consumers have some form of relief the UK government set an annual

cap of 2500 pounds or three thousand twenty seven dollars to ease some of the strain britons are feeling in their utility bills and this relief has become exceedingly necessary it is reported that 25 percent of britons can't afford their monthly bills disposable income has dropped approximately 13 percent on average and for perspective consumer Prices rose by 11 in October of 2022 in the UK compared to

6.5 percent in the U.S Shoppers in the UK are also faced with shortages tomatoes cucumbers and peppers were in short supply as of the end of March 2023 due to disrupted harvests in Northern Africa requiring industry buyers to spend more on less from places such as Spain Great Britain narrowly avoided a second consecutive quarter of declining economic growth and what would be the definition of a

recession but that fact is of little relief to businesses and families in the UK rises in the cost of living has seen work stoppages and Strikes from the medical industry train conductors teachers and various other public sector employees seeking raises disposable income dropped by approximately four thousand pounds or four thousand eight hundred forty dollars per year per household on average in the UK and it's expected

of 2021 to ease inflation making personal and business loans more expensive and less accessible to borrowers the UK really is in a perfect storm of hurdles to economic Prosperity the past few years have been tumultuous for leadership in Great Britain to say the least it seems as though the UK has had a series of bad luck and bad decisions from the top that have had serious

consequences all the way down their longest standing Monarch has recently passed away and the UK has been busy coordinating their new king the coronation of King Charles although a bit of a boom to the UK's tourism sector cost over 125 million in ceremonies and over 1.36 billion in Lost productivity as businesses shut down and people were given time off for the occasion Great Britain is also

still recovering from the events that led to former British prime minister Liz trust to resign making her the shortest termed prime minister in British history trust made campaign promises to cut taxes and increase government spending to keep the British economy growing once in office she aggressively cut taxes at the top income levels and promised further Cuts in the future the problem was that she didn't announce

any plans to pay for these tax cuts and spending leading to skepticism in the global markets foreign investors panicked and pulled their money from British Banks leading to a sharp decline in the value of the British pound and ultimately leading to Liz trust's resignation after only 45 days in office the bank of England has been Market correcting ever since changing the interest rates and aforementioned 10

times since December of 2021. although Liz trusts his time in office was short and filled with turmoil their previous choice of prime minister and and the voting decisions of older britons have also attributed to the current state of the UK's economy the UK's brexit from the European Union has had various detrimental effects to Great Britain's GDP during the 1980s under prime minister Margaret Thatcher the UK

made economic moves very similar to Ronald Reagan's America the markets were deregulated unions were busted and the financial sector thrived the UK's booming financial sector ultimately led to Great Britain basically becoming the world's Banker by the beginning of the 21st century around 2008 and when the world was hit with a financial crisis Great Britain's Financial machine came to a grinding halt Parliament pursued austerity in response

focusing on debts instead of productivity or demand this resulted in six consecutive years of real wage decline leading Britain's nostalgic of better days pundits sought out someone or something to blame for this economic disaster they put the blame on immigrants Asylum Seekers anyone but the leaders who had actually LED them down this road older British voters demanded to leave the European Union and their wish was

granted leaving the European Union was a bad idea in several ways conservative britons felt that membership in the European Union wasn't providing them with a prosperous economy protection immigration control or effective public services and voted by nearly 52 percent for brexit leaving the European Union severed all agreements between the European Union and the UK regarding security trade governance and Logistics the UK is completely on its

own under the leadership of former prime minister Boris Johnson brexit created a volatile stock market for investors although London was once thought of as the financial capital of the world 10 percent of UK assets have been moved to the European Union and over 440 financial institutions have left the UK entirely UK imports from the European Union declined by 30 percent just prior to the covid global

pandemic in January 2020 and UK exports fell drastically by 45 percent by this time and had fallen an extra 15 percent by August 2020 around 20 000 European Union citizens left the UK resulting in a massive shortage of workers in the retail hospitality and transportation Fields this labor shortage contributed to the energy crisis due to a lack of drivers that could transport fuel into the United

Kingdom brexit has had its own slew of problems but another cause for the UK's current economic turmoil is a decision not to automate compared to the U and other developed Nations the UK has invested very little into Automation and robitization for example there are more hand car washes than automatic car washes which looks like keeping a human working a job instead of a machine on the

surface but in reality this is a low-wage low upward Mobility occupation that is actually taking a job away from a robot failure to change with the times has led to less than desirable production rates in the UK compared to other nations and this glut of non-desirable dead-end jobs combined with skilled worker unions striking has led to a labor shortage throughout the UK the economic future of

Great Britain is uncertain but there are some signs the international monetary fund predicts that British GDP Will Rise by one percent in 2024 and by 2 percent over the next two years there was next to no growth in 2023 but the UK was able to narrowly avoid a recession Great Britain has a lot of work to do to get back to Prosperity current prime minister Rishi

sunak doesn't have a specific strategy for expanding the UK's economy and the costs of brexit three years ago is becoming more and more Stark as time goes on the National Institute of economic and social research contends that Britain should invest heavily into businesses and infrastructure Britain's middle class is being squeezed by higher taxes higher mortgages and lower buying power of the British pound sterling in conclusion

Great Britain is facing an unprecedented economic crisis Rising energy costs have contributed to higher costs of food which contributes to inflation overall bad Investments poor leadership decisions and voting for brexit have come back to bite britons in their pocketbooks although their financial sector is stable the choice to avoid Automation and industrialization have helped lead them to their current state of affairs There's Hope for the future

but they're not out of the woods yet thank you for tuning in make sure to subscribe to stay informed on future the richest content