UK Economy Is Flatlining
Like a patient on the operating table with no pulse, the
UK economy is barely growing. Prime Minister, Keir Starmer and Rachel Reeves
are desperately banging on the chest of the patient trying to revive it, but
they don’t know how to bring it back to life.
December figures show that the economy barely grew by
just 0.1%.
They talk of growth, but where is it going to come from?
China’s economy grew by 5% last year.
Retail sales were down in December! I’ve never heard of
retail sales falling over Christmas.
More inflation is expected as UK borrowing costs and bond
yields have risen sharply.
The country’s additional borrowing costs will run to £12
billion per annum. Paid by us, taxpayers
of course. Governments screw up, we foot
the bill.
This could mean higher interest rates and higher mortgage
costs for all of us at a time, and the Bank of England should be cutting rates.
The market has lost confidence in the UK chancellor
Rachel Reeves. She is out of her depth and reminds me the person that talks a
good game and job interview but in reality hasn’t got a clue when they’ve got
the job.
Labour have got off to the worst start and any government
I’ve never known.
They want to give away the Chagos islands to Mauritius,
and then lease it back at a cost of £9 billion!
I’ve heard of sale and leaseback, but not “give” and
leaseback.
This will surely be remembered as the Prime Minister’s
“Gordon Brown” moment. Gordon Brown was the Labour chancellor who sold off the
U.K.’s gold reserves to China at rock bottom prices. Gold has risen by at least
10 times since the ill-fated sell-off.
They inexplicably cut the small winter fuel allowance for
millions of pensioners, taxed private school fees, and raised national
insurance costs for employers, taxed our farmers and borrowed an additional
£145 billion, all of which have made them hugely unpopular.
And yet, the FT 100 index, reached a record level today!
Apparently they expect interest rates to be cut by 0.25% when the Bank of
England meet next month
Will the Bank of England hold or cut rates next month?
The implications are huge for the country and for the
700,000 borrowers who will come off fixed interest rates this year, as well as
the first-time buyers who want to go on the property ladder.
Buy to let property investment has become almost unviable,
unless you have a large deposit or buying cheap properties up in the
north-east.
Some good news could be on the horizon for first time
buyers as regulators are expected to relax lending rules. However, could this
lead to another boom and bust?
The massive building firm Taylor Wimpey has reported good
profits of over £400 million last year and they built almost 10,000 new homes.
Perhaps labours plan to relax planning rules will bring more homes onto the
housing market.
China
What is going on between Labour and China?
Why did Rachel Reeves desert her post at the time of the
bond crisis last week?
What are they given away for China to buy UK bonds? The
Chinese government does not give anything without expecting something in
return, and they normally bargain very hard.
Foreign Secretary, David Lammy is expected to approve a
new super embassy for China on the site of the old Royal Mint.
Why does any country need a super embassy with hundreds
of “diplomats”?
Donald Trump could turn the US economy around, but will
we get a decent trade deal after labour have alienating themselves from the new
president elect?
David Lammy, with his personal attacks, labour sending
100 people to America to canvas for Joe Biden during the US elections and now
rushing to sign a deal with Mauritius before the presidential inauguration on
January 20.
Now it appears Labour are getting closer to China.
The previous government cooled relations with China over
Chinese technology, tensions over Hong Kong and Taiwan, the South China Sea, cyber
security and allegations of spying.
In summary, the lunatics have taken over the asylum!
What does this mean for you?
What can we do to cope on a personal level?
If you believe we are entering choppy waters and stormy
weather, now is the time to batten down the hatches and tighten your
belts.
This is not the time to purchase an £80,000 car on a
lease or buy a fast-food franchise and open up yet another burger bar on the
High Street.
I’ve seen at least two or three new fast-food outlets or
restaurants popping up on the High Street in the last couple of months. They
are occupying premises that previous owners of similar businesses who went
bust.
I’ve talked to some of the business owners, and they are
struggling. I walk past their restaurants and see the empty tables.
I talk to a lady who opened up to bubble tea outlets and
lost all her savings within six months.
Her sign is still above the empty shop, which means the
landlord has not been able to let the property again.
·
Manage your money and control your spending.
·
Invest wisely.
·
If you’re nearing retirement, I would check with
your financial advisor as to where your pension funds are invested.
·
If you are young, I would learn more about
AI.
AI will kill 300 million jobs worldwide according to a
recent report.
People already been laid off in the City of London and
Wall Street due to the impact of AI.
A massive rise in employer national insurance
contributions will hardly encourage employers to take on more staff. Worse
still, it could lead to redundancies.
Could be an easier time for homebuyers, if interest rates
fall and the regulators ease the stringent restrictions on mortgage lending.
Expect the best but prepare for the worst.
Join me for my free webinar, Three. Steps to money,
management and financial freedom, Wednesday 7 pm.
Places are limited, so register
now below to avoid disappointment.
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See also:
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