EVERYTHING in the UK economy is going wrong at the same time | Economics | New Statesman
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- Опубліковано 9 лис 2022
- Low interest rates were the only thing keeping the Conservative coalition together - Duncan Weldon
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Will Dunn interviews economist Duncan Weldon on his recent New Statesman cover piece, Britain’s big squeeze, A new era of higher interest rates and lower wages threatens another lost decade for living standards.
Read Duncan's article, "Britain's big squeeze" here: www.newstatesman.com/economy/...
Together they discuss why “everything in the UK economy is going wrong at the same time,” including issues such as rising inflation, increased interest rates and lower wages combining to create a cost of living crisis and a UK economy where its hard to see who the “winners are.”
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I'm not an economist, but I wanted Duncan Weldon to talk about the obvious need to tax those who had increased their wealth hugely since the Covid crisis (both the super rich and the corporations) and used that wealth to purchase more assets, thereby BY DEFAULT making everyone else poorer.. Is this a taboo subject or do economists fear for their jobs if they give obvious answers? Something has gone badly wrong with realism but this time the suffering is going to be so immense that the people will surely take to the streets. It's time for honest, clear conversations with discussion about the causes. The people have suffered too much. Many of those assets are in this country, we need to tax them.
But that would be communism!
@@detritiv0re144 That's toddler talk.
Yep agreed...the only people who would disagree are the 1%.
@@hilaryporter7841 Todlers are not going to be doing too well 20 years from now. Grown ups are the problem.
The IMF put out a paper on wealth tax last September, the media is mostly right wing owned and we don't tend to get an full and Frank discussion on economics
Golly, when we find out who has been running the country since 2010 we’re going to be hopping mad.
We’ll threaten not to vote for them again, and tell them they’ve been a very naughty boy, not the messiah.
Thats what gets me every time i hear a Tory talk. Everytime they talk as if another party ruiled the country into the ground but if you give them your vote they can finally start fixing things. They act as if they are revolutionaries. Meanwhile they are the establishment. They live in an alternative reality...
It's a good job we have a new government to sort everything out who are definitely in no way whatsoever linked to that previous bunch of chancers.
Once you do, they'll tell you that it's the government before them that is to blame. Or, the government coming after them.
@@ianfraser6161 When you do that, they'll promise you a lot, will do the least they can so they can get your vote and once they retained power, they'll renege on their big promises
The UK is basically experiencing stagflation. Brexit pushed up the cost of imports too. I think the answer is making taxation more progressive - tax the richest more and give tax relief to the poorest including removing VAT on basics. That's how you generate economic stimulus at the bottom, without increasing inflation or increasing the deficit. But taxing the rich is never considered an option is it? That's the real problem.
What do you mean by "the richest" though? The truth is to increase overall tax take significantly you'd need to define this as about the top 50% of earners, and the vast majority of those people do not consider themselves "rich" and would vote out whoever put such a policy in place. Every government since 1979 has understood this. The elephant in the room is unearned wealth. Everyone feels poor compared to the real rich in this country, and all their wealth is inherited or from unearned asset appreciation and is therefore basically untouchable.
@@TheSpoovy Wealth tax on people with a liquid net worth above 10 million sterling and windfall tax on companies with over 10 million in profit. Progressive taxation.
@@amorosogombe9650 Virtually nobody has 10m cash, which is presumably what you mean by liquid. That would raise virtually nothing. Otherwise you're talking forced sale of assets, which takes us down an unbelievably difficult and morally dubious path.
We could tax large companies more, but it's easy for many to relocate which happens all the time, look at Ireland for an example. Even if you can balance it so you take more corp tax with minimal job losses it would still be small beer in terms of overall tax take. Plus all taxes are borne by people ultimately anyway so the corporation tax argument is just obfuscation really.
The only solution is to raise the basic rate significantly, for almost everyone. This requires winning hearts and minds, and the simplistic "just tax the rich" argument does not help the progressive cause at all because it suggests there is an alternative where non actually exists.
@@amorosogombe9650 What you propose would be totally ineffective. There is certainly an overwhelming argument in favour of various forms of wealth tax, but the simplistic approach you state simply would have no effect. The fundamental idea of effective taxation is "a thousand cuts": many mechanisms, all of them small, so that dodging any one of them is hardly worthwhile. A shining example of a fair way - arguably by far the best way - to tax wealth would be a Land Value Tax, which has been widely studied and documented (search it). Voters don't love the idea. Old geriatric Surrey folks with huge houses rightly fear it as it would take more money from them and less from young employees starting their families.
You can’t tax the rich. Are you dumb. The rich are experts in accounting, offshore, tax evasion etc. It has been tried and all taxtherich policies do is hurt the middle class the most as well as the poor. These people are all mumbling resultless talk after deed - it is like getting wet in the rain and then putting up an umbrella when the rain has stopped. People are brainwashed and brainwashed slave talk just confuses the masses and leads them to the ditch of their hopeless lives on the rat wheel or in the gutter. The people in power don’t have the best intentions for the masses. True knowledge is hidden and lies and helplessness is indoctrinated into the school system, media and educational literature. It’s all a big trap which only to quickest to realise have the chance to opt out of. Taxes go to wars to kill people and put more fuel in the fire and feeding the lazy. Hard work doesn’t pay off, smart work does. Most people are slaves who believe lies.
All this misery is part of the great reset. It is all planned.
this video is exactly what journalism needs to look like. TV journalism is guilty of confusing the masses by failingly trying to condense complex information into a so-called "digestible" format for viewers but in fact what they actually do is confuse, conceal and contradict themselves which then leads viewers to have either a simplistic understanding of how economic events happen or a completely wrong one. And this is prevalent on the left just as much as it is on the right. More videos with Duncan pls
One of the biggest fallacy’s was presuming Britain would stand taller as a single country rather then being one of the leading powers within a united europe.
The world is interconnected and there’s no such thing as true independence as we all work within given rules.
A large proportion of the EU laws were actually devised by the UK; the Irish issue was “resolved” by the concept of an EU and the open border making it a separation acceptable to the powers that be; a united EU, with the UK at the helm with former foes France and Germany, is a great counterpoint to the Other large powers: USA, China and a blossoming India… let’s not even begin to talk about the economic strength a united EU brings.
I’m a dual national English/German and love both countries and as a financial futures broker, who was involved in the markets since the early 90’s, have seen how the closer economic and social connection benefitted all and sundry. Such a tragedy that brexit occurred which harmed the UK and the peoples all over Europe.
Ignorance pays a hefty price.
That would certainly work if the EU was simply an economic organization with intention of trade and market partnerships, but they have ballooned into a bureaucratic and frankly tyrannical nightmare.
There's no shortage of instances where the EU meddles in the affairs of its members and non members due to political reasons.
@@KrolKaz I understand ur opinion. However that is the case in any union. Accepting the pros and the cons. End of the day the UK was one of the strong elements to help guide this grouping. We all have to compromise one way or the other no matter what.
There were many reasons why people voted for brexit. Older people remember the 1975 referendum vote to remain in the then common market and voted yes. Then we learned that the prime minister had lied what it about exactly what it would morph into. He lied because he realised there much scepticism and therefore he might not get the answer he wanted. Treaties were made without consultation with the people , eg nobody wanted open borders-it is irresponsible not to vet everyone coming to live in your country.
People found themselves being left behind and the infrastructure could and still can’t support the level of immigration that has occurred . However , all that being said, the government, in their arrogance in believing that remain would win did not plan for leave and we’re shell shocked at the decision. The civil service have been used to Brussels making all the decisions and blaming them when things go wrong.
Finally what do unelected bureaucrats with outrageous salaries sitting in Brussels know about the lives and struggles of ordinary people who have their own cultures and identities etc? The eu politicians are not listened to . There is much scepticism and unrest in Europe and the UK won’t be the only country to leave.
@@KrolKaz you’re MAD
You’re as obsessed and blinkered as that twat Farage.
Neither of you have ANY CLUE HOW THE WORLD WORKS.
Aye
Ah, but those blue passports. Priceless ...
And little golden crowns on beer glasses. For those who will find a pub and can afford one.
Lol 🤣😆😆🤣
the irony being we chose to move to burgundy, the EU didnt force us. we could have changed back any time we wanted to.
Young people need to be part of the conversation on this channel. Yes the coming recession will be hard for everyone, but under 30s have only ever experienced an economy which saddled them with debt, took away their housing options (unless they got their head down from age 16 and saved religiously/had parents who could support a house or flat purchase), and which advertised high wages correlated with an education, only to pull the rug out from underneath them. Not to mention that we are the generation who will pay for covid and climate change. Oh and final nail, having a child with an upbringing comparable to your own seems completely unrealistic no matter your background. This asks the question, what will motivate young workers over the next four years except the fear of more debt?
Not only all that but even covid was harder on the under 30s they had the same restrictions as everybody else and were in virtually no danger. Could you imagine the selfish (Brexit) pensioners being confined to lockdown if covid only killed the under 30s?
What will motivate young workers?
Emigration?
Some of them should ask why their parents are voting in the Tories when the next generation is worse off but their parents preserve their wealth.
@@david-pb4bi Stupid comment. My elderly relatives were against all lockdown, but then they are intelligent, so knew the destruction to lives and businesses, and the effect on people's mental health.
As for young people's future, it is down to parents to teach them financial responsibility. Too easy a cop out to behave like a victim!
We all pay for our choices sugarplum. You would do better choosing not to play the victim. No one forces you into debt, lol. You are welcome
I clicked this from my homepage thinking it was a new video. Didn't see it was a year old. Looking at this in hindsight, hasn't this guy been proved utterly wrong?
Haven't even talked about the brexit effect lol... Which actually is making things far far far worse for Great Britain
The Root cause of our current inflation is connected to energy policy
Brexit is just the shtshw that pours petrol on any economic problems we have and makes them way worse
Here's a fun fact historically coming out of recession is driven 60% by SME'S and exports small businesses trade locally its known as trade gravity and weve erected trade barriers with a 400 million person market 20 miles away.
Corporate investment has dropped right off since 2016 basically this isn't a 5 quarter recession its going to be permanent as we spiral into a doom loop
Did not vote for Brexit, but you are wrong, lol. Are you asleep to what has taken place throughout the globe, over the last three years 🙄
@@annapachaclarke2392 So what your saying is removing 1 million workers from the economy erecting trade barriers with our closest trading partners cutting off export expansion for hundreds of thousands of SME's and cratering investment since 2016 has no economic effect?
Anyway whatever
Watch this from the Financial Times why do you think the Markets went Ape when Truss's budget landed?
"The Brexit effect: how leaving the EU hit the UK | FT Film"
We ve never exported much since Tories sold all industry away
Think at this stage we can just call it Britain
Brexit is a tragic mistake. And yes, raise taxes on capital gains and higher incomes.
"Higher incomes" is where things go wrong. Those who genuinely have all the money (like 100M+) don't have traditional incomes. Agree with your cap gains point, but would add inheritance tax, wealth taxes and more to balance out our inequality problems.
My whole salary LITERALLY - after tax - went on my mortgage for some time after an interest rate hike in the late eighties or early nineties. £1400 in and £1400 out on a mortgage of £70k or so. We lived off £200 a month, with four kids, after paying all bills and huge child-care costs. But pay rises were also enormous, so it didn't take long to escape the trap.
I was a passenger over 40 years ago (12 years old at the time) but we knew my parents were cutting back, mum went back to work, visits to the building society to get a payment plan together etc) as you report..... Remember though then interest rates went upto 15%.......the majority either defaulted or renegotiated, most plunged in negative equity, as house prices crashed >33%. Good. I genuinely hope that do house prices do fall (it's this bubble underpinning further unsustainable consumer debt, we can't afford new cars, what do we do, sign upto pcps invented by the putrid wholesale financial service sector, on and and on, unchecked) ...... the upcoming busting of the property bubble is long over due imo, possibly with a few wholesale banks popping along the way would be net-good for everyone else, thankfully now carved out and can now fully fail after that coke induced banker greed upto the credit crunch. Hopefully this deep UK recession will replace failed mechanisms and stop this futile hope of hanging to overextending unsustainable debt based growth economics that so many large institutions are deeply invested in and willfully protected via successful govt lobbying. I hope that a great reset allows many of these institutions to disappear and new ones to emerge.
I do believe we are able to reinvent ourselves.
This video promotes neo-liberal economics.
Pay-rises create inflation but NOT when the taxes on the wealthy also increase and the revenue is spend on the employees. Some businesses would suffer but new businesses will emerge. Save the citizens , not the Businesses.
Is there a politician who would be re-distributing some Wealth by taking from the Wealthy and giving evenly to every citizen, again and again, in perpetuity? When would the politicians understand that only citizens with disposable Income (Wealth) can be customers on the market thus creating jobs and Profit for the businesses to harvest.
buying a house is a choice tbh as is having 4 kids
@@1man1bike1road without those 4 kids your not going to have a pension or public services when your old
That's wht we just import immigrants instead of having kids.
The big problem has to be the Tory Government. It always fails to help investment anywhere north of Birmingham. It hates to spend any money where Labour voters lives. Tories say they invest. Yet time after time investment is promised. Yet delivery fails every time. In private they think the North is a money pit. But people make ideas work. Yet if transport is difficult, it slows or stops ideas happening. Bad schools. No money to pay for care. No housing. Rents high.
If Gordon Brown hadn’t take the UK off the gold standard, this madness of QR wouldn’t have driven the UK into the poverty that’s now knocking at out door.
@Libertariun well that's both wrong (as in incorrect) and wrong (as in misguided).
Edit: if you need help... the gold standard was abolished 20 years or so before Brown was born.
All I can say to Will Dunn, and Duncan Weldon .. is .. well done :-)
Raising interest rates might help curb inflation if the inflation was being caused by people taking loans for discretionary purchases - but that's not what's happening. The vast majority of people are just keeping up with the bare essentials.
Interest rates have been too low for too long - essentially "free money" which has inflated asset prices (like housing) for the last 10-15 years. It was always unsustainable.
Always good to hear from Duncan , very intelligent fella.
Unfortunately, many people are only beginning to realize what the conservatives wanting 'different economies for different people' actually means.
The 'pain' of increasing interest rates is NOT painful for the wealthy. Higher mortgage rates are not painful for the wealthy. INFLATED housing prices are NOT painful for the wealthy; 'houses' are merely affordable 'assets' preserved for the wealthy (they are no longer called 'houses' that ordinary working people NEED). Therefore, there isn't a problem for the wealthy.
'Unretirement' isn't an issue for the wealthy.
Ordinary working people are being impoverished by the Government who act instrumentally.
Rishi Sunak understands economics ... sure. But Rishi Sunak and Jeremy Hunt are also greedy globalists who believe that the Super-rich and ultra-wealthy should be entitled to move wealth around the world - i.e., to literally avoid or minimize paying fairly towards society. Sorry, but Richard Branson and Cliff Richard don't NEED the state pension; why don't we means test the wealthy? The globalists will simply blame global events for economic downturn, but 'inflation' isn't anything new (can you buy a house? Can your children buy a house? Can they even afford to rent a house?); inflation is caused additionally by the inequality gap that has been grown on steroids!!!!!!!
Therefore, Hunt and Sunak's economics are MAD, progressively dangerous, and obviously unsustainable ('Populism' could easily emerge as fascism if these people continue being instrumental in growing inequality and manufacturing poverty for some, rather than their 'mates').
They will talk about "levelling up" - they have to!!!!! Because they know what they are instrumental doing. "Levelling up" is more 'future faking' nonsense; in reality, endless austerity and massive taxation is what you will be subjected to.
Where is our energy security? Why haven't we got greater food security? Why can't we access housing? Who is 'We', and who are 'They'?
Here's the deal: there isn't a problem. The wealthy can afford a different economy to ordinary working people.
Is there anymore 'fat' to trim? According to the globalists, there is always more 'fat' to trim whenever ordinary working people have anything.
They are coming for you! But the wealthy have nothing to fear on this front.
Discuss
Don't mention brexit.
Well done!
So on the one hand he is accurately identifying that British people are experiencing a horrendous squeeze which obviously means most do not have spare money to throw around in the economy yet he has also identified that domestic spending is going up so spending is coming from somewhere which he attributes to a tight job market presumably meaning that employment is high therefore everyone is spending happily but if that were the case his first point is null and void! Surely the more obvious answer is that the huge spending within the economy is coming from the tiny percent who have snaffled it all over the past 40 years of neoliberalism in which case the answer to bringing down domestically driven inflation is wealth tax, corporation tax and progressive tax rates. I've only watched the first 4 minutes I don't think I can put myself through anymore
Well done to both Welldone and well done!
We need to have a general election. In all honesty we should have had one when Truss resigned.
It's too late to have one before Christmas, but we must have one next Spring. The UK literally cannot afford to have the Tories in power for another 18 months. The damage they've done already is incalculable.
Sometimes I think they (the Tories) are trying to grind the economy into the ground on purpose, so as to force the break up of the Union. Because as far as I see it, they only seem interested in their own party. Nothing else matters to them.
The UK is clearly not a priority for them, and their policies seem to be made with the objective of keeping the Tory party together. That these policies may be detrimental to the UK is considered by them to be something of an afterthought.
A party that thinks along these lines is one that should not be in power. There's a 'reckless abandon' nature with the Tories, and real inability to think with clarity and make the right choices and decisions.
The current government have no mandate at all. And they are as unstable and callous as the last three governments have been. This is why a general election next spring is essential.
if i was labor i would refuse to take over and take on the mess the tories have created. uk is screwed and fixing the mess is going to be painful. personally when i look at brexit the only one that i can see that benefited is putin. destabilizing europe is main goal and for one reason or another the uk gave him something he wanted. same thing as trump in the states.
Honestly you should just return to the fold and scrap this insane Brexit project. Speaking as a swede, we're more than happy to embrace you back into the union and I think we can already point to clear empirical evidence that the only one who stands to benefit from a divided Europe are the countries outside our continent hungry to take advantage of individual nationstates.
Sadly the labor opposition is currently fake and just as corrupt. We need a new party to vote for as well as an election!
@@ArchibaldOctaviusButler .....but NOT a new party headed up by Nigel Farage. He's more corrupt than many Tories. And he's definitely not the answer to our problems. It would be like us jumping out of the frying pan and into the fire.
@@robtyman4281 I am left, can't stand Farage.
I love TNS and Times Radio. Both offer fantastic analysis on serious issues.
It is a long time since i heard such a balanced and informed question and answer session, and it makes absolute sense.
The BOE have been asleep on duty with regard to interest rates and should have had them higher since 2009 , this would have deterred the cheap money economy from creating personal and corporative debt and it would also have rewarded the prudent for living within their real world means by making saving money attractive
having lived through the late 70s and 80s as a young person trying to get started in life under a Thatcher government with unemployment at 3M and interest rates at 15% i think this coming economic storm may well be worse if the government by tax rises and spending cuts oversteer the economy and crash it
Absolutely, interest rates were crazy low for years after the 2008 crisis and should have started to go back up at least by 2014. Savers have been hammered at the expense of property speculation.
Nice to be able to understand about the economy, or rather, when we had an economy. This guy explains things really explicitly, even İ can understand it!!
Try GarysEconomics channel
@Ruben Daniel Not so bad thanks, and yourself?
@@SlowhandGreg İ certainly will thank you Greg
What are you talking about?@Ruben Daniel
check out a YT channel 'garys economics' well worth it. explains it vert well
This is sobering stuff from those who work with in it. In the end it makes us look like hamsters in a wheel. Chasing the rest of the crumbles in a cycle that doesn't add up. They didn't mention where the serious money is religiously protected. Tax to wealth could rebalance the economy. There's plenty enough, those who own it finance expensive economic and shooting wars. The ongoing crises have overfilled their pockets. Economists can only throw up their arms.We face a bad dream worse than the one they've given us so far.
If u start going after the mega rich hard then whatever taxes you where receiving will disappear as thet will all find another tax haven to shelter thier money in.
You're just cutting your nose off to spite your face.
Either way Britain is trapped bc it cannot survive the sanction war against Russia.
How odd that the BoE "must inflict pain", did we forget about price controls? Or is that too horrific for the capitalists? We already have price controls on prescriptions, water bills, electricity price caps, in all sorts of areas, in New York they have rent controls. If we repeat the same bad, flawed thinking each time we have this problem we going to keep having serious recessions with all the personal, business and economic consequences I have seen time and again. It's time for a new approach and a new way of restricting and limiting the impact of capitalism on our lives, to move to a constant steady economic state without these self-inflicted wild swings. It's obvious there has to be joined up thinking with the BoE and government - one economic direction.
Too horrific for the capitalists.
They only want wage controls.
The 2008 GFC was similar to what happened before the Depression of the 1930’s. In 1933 Franklin D Roosevelt set up the Pecorra Commission, and hundreds of Bankers were jailed. Legislation was introduced in an effort to prevent a recurrence. This Legislation was taken away by the Clinton Administration. After the 2008 GFC, no Banker was jailed, but they were rewarded by the Obama Administration.
I appreciate the thoughtful analysis and attempt to remain unbiased, keep up the good work
5% just landed as of March 1st..........your crystal ball is knackered. 15:21 on your report.
It's fine if you're part of the 1 percent. Like our Prime Minister, for example.
hey! he could tax the rich more so that... oh.
@@betabenja 😂👍
and his chancellor. and most of his cabinet.
"Hello, I'm well done....." so glad.🤣🤣🤣🤣
Why is it that the UK economy has been so badly mismanaged since WW2 ?
Post WW2 MP's don't understand international business and how to run an economy.
Our decline in 80's years from a super power to a basket case is staggering.
Lost of Empire was a shock to the system. UK set economic policies that was advantageous to the UK over 1/4 of the globe.
Because the UK economy was dependent on empire and that empire got severely weakened during World War 2.
it was badly managed before WW2, pretty sure the title "sick man of europe" had been given before it started. The americans gave a big boost after but its since been squandered filling the pockets of elites
UK's economy depended heavily on colonized countries. UK is actually situated in a corner of the world. It will lose its relevance in coming decades
Thanks for this discussion it really deserves a wider audience, especially those who wield power in this country.
The only reason for my 2 pence worth is your description of the Bank of England and the recession we are in.
Some recessions occur to cure excesses built up in boom times. This could be argued of the 1990s recession. The boom in house prices of the past decade occurred in a period of artificially low interest rates and it could be argued the winners won artificially too.
I would put it to you one of the UKs biggest bubbles is the housing market which is akin to runaway freight train going downhill.
We have long accepted people priced out of home ownerships now the same is occurring in the rental market.
There appears little appetite to correct the housing problem despite the lack of (social) mobility it creates. When the government feels it needs to stoke growth a further push to housing it used.
The BoE presided over this period of artificially low interest rates. Perversely with QE, it could be said the BoE was financing government expenditure directly.
In November 2021 the Governor talked up raising interest rates then decided not to and was labelled an unreliable girlfriend.
He appeared to believe the BoE/Pound had gained the same status as the Federal Reserve/Dollar.
For most of my life, in am 57, I recall Chancellors and BoE governors having to set higher interest rates than US to protect the pound and the UK endured higher inflation than the US.
This notion appears to have been lost on the BoE lately. Given most commodities are priced in dollars, significant depreciation against the US currency adds to inflation.
Andrew Bailey should be grateful to Kwasi Kwateng / Liz Truss for the mess they made as it deflected attention from himself and the BoE. His role as head of FCA at the time of mini-bonds scandal shows how he can be too prescriptive when applying rules.
From what I have read inflation has never been tamed with interest rates below the inflation rate.
Also because the US Dollar is so strong the US is exporting it's inflation around the world, so if the Fed is raising rates the Bank of England has no choice but to follow, or the pound will weaken further and inflation higher as we have a very large trade deficit.
Nobody understands this. Or few do. They think the govt is the problem but they forget we're dependant on USA and world economy. A single PM or party can't do much except if they don't go tank the economy further like the beloved Truss.
Spot on nick. The USA has printed so much money and devalued the $ so much the oil producing states have pulled supply to push the per barrel price up. This was filtering in before the Ukraine war but it’s gone up substantially since.
Since oil is priced in $ everyone is affected by the surge in $ when the fed puts up rates.
Watch Sunak and Hunt put taxes up on the middle class.
Shame this economist just talked about since the 2010s and not back to when the foundation for this chaos was put in place under Tony Blair’s new Labour.
57% of US inflation is Corporate as in price gauging
We have Supply Side Corporate Inflation on inelastic commodities such as energy and food
You can lower inflation simply by addressing these 2 areas for energy try reduce demand by better insulation and modernising heating plus the quickest and cheapest way would also be build more wind Turbines
Have an agricultural deal with the eu to reduce delays remove vet and other paperwork costs from the spiralling food costs. Plus reform uk farming away from its reliance on fertilizers
@@SlowhandGreg I think energy costs are going to remain elevated for years to come in Europe because there seems to be no easy alternative to Russian Gas.
So anything with a energy input, which is everything pretty much is going to be more expensive.
Just depends if we are looking at a one off price increase that will level off or a constant increase.
I guess that's were your points about insulating homes, energy efficiency and renewables come in, and how much in the round they can offset
@@nickbuckle646 back in 2019 onshore wind generation reached parity with gas generation at 38p per gigawatt hour since then generation from gas has gone literally through the roof, currently you can crack hydrogen from water at 1/3 efficiency using spare electricity and there are huge advancements in the pipeline.
There are also multiple ways of storing spare energy as heat Finland for example are developing a sand battery which is basically a thermos flask the size of a large grain silo.
Scotland is already 93% renewable but tied to grid prices in the UK based on gas this is why labour are proposing GBEnergy the UK is unique in its topography for wind and tidal generation the cost of Cameron getting rid of the so called green crap runs into well over 100 billion
Funny how UK was not concerned when Banks and investors were doing this to Asia, Africa, Latin American, and the Carribbean...lol
as an empire crumbles, the pain it once inflicted on the periphery will be directed inward
And wait, the IMF hasn't actually gone after them the way it usually predates on emerging economies.
The le el of debt is high because the housing market has been encouraged to boli over - by design.
fascinating discussion - as well incredible hair on one side verses heroic eyebrows on the other.
It’s all got a bit fawlty towers,.,,.,,......I mentioned brexit but I think I got away with it 🙄
Don't mention the war!
Thanks guys, wonderfully sober analysis. Seems a perfect storm to me.
Just like it except the situation has been made by the choices of the government not some irresistible natural force.
@@dinnerwithfranklin2451 Oh for sure this is all by design and has been decades in the making to bring in enslavement via digital currency. When the central banks can't make the current system work a new one will be forced upon us.
Anyone remember 'Big Society' or even 'levelling up'?
Lol 😆😆🤣
But don't worry by the time The Tories have finished there ll be nothing left
yup, next gov coming in will basically inherit a burned down house, then the press will blame the gov for 4 years and tories will get back in again and we collectively bang our heads on the desk
If only the govt had access to economists....
you mean experts? pah. we have michael gove dude :P
Tax the wasteful. Almost everybody goes shopping. Look who brings their shopping bags and those who take new bags that will usually only be used once. Those that look after the planet also look after their money.
good interview. good interviewer
A person who went to Private School, so his parents wasn’t poor. He didn’t grow up in a POVERTY STRICKEN HOUSEHOLD.
His Parents didn’t have to choose between EATING AND HEATING.
The has more than 700 Million fortune.
The shoes he has on probably costs more than the rent most peoples house/flat.
He said in a documentary in his school days, he doesn’t have friends or knows anyone from the low income working people.
How can we expect him to understand how miserable, he and his party, politicians in general peoples lives have become, through their so called difficult decisions.
The say it’s a necessity to make our difficult.
But the reality is, it’s not, it’s a CHOICE.
It’s their choice of fiscal policy.
It’s funny how politicians walk around knocking on peoples doors, shaking hands (and than go back home washing it with anti bacterial soap, because they have shaken the hand of someone far beneath them).
They promise with your vote, they will go into office wave their magic wand and you will be able to buy that big house, that new car and go on 2 cruise’s around the world costing £20,000 every year.
Than what happens, they get into office using your vote and stick 2 fingers at you.
Saying thank you for your vote.
Oh no they don’t even thank you for your vote.
Energy is priced in US Dollars. If you don't increase interest rates the value of the Pound will fall and energy prices will increase
One would have a lot more sympathy for central bankers' angst over inflation if that 2% target was ever applied to asset prices, as well as CPI. The history of central bank cuts is one of asset bubbles that are only addressed AFTER they reach unsustainable inflated rates. But if goods prices rise the central banks break out a steamroller to crush it, along with everything else
It is really hard to discern between a bubble and real economic growth at the beginning of the bubble stage. Not even economists agree on whether there is a bubble or not
Probably not worth to risk destroying real economic growth if we are mistaken. That’s my opinion anyhow
Printing billions of pounds increases the money supply and causes inflation
Mentioned right at the end: tax. Taxation on the very wealthiest has to be the most effective lever the government has to pull to save the economy. Unfortunately, not taxing the wealthy is the Tory party's raison d'etre. We will not improve until there is a party in power that will pull that lever!
Economists say the bank won't raise customer and bank interest rates to the levels of inflation or just below it. Then they stop and don't explain why. Can someone tell me why the bank would rather use quantitative easing methods and borrowing at high interest than use the money already in circulation, when both of the former, devalues the value of the pound?
It only devalues the purchasing power of those who did not get the £12000 per person worth of QE that the BOE chucked into the economy. In other words, the wealthy will be fine.
Missed one important point with regard to BofE and interest rates. If the BofE doesn't raise them, whilst the Fed IS raising them, an enormous downward pressure would be exerted on the value of the pound. And inflation would get much worse.
At last someone who understands some basic economics.
Well done, Will Dunn.
It's not going to get better soon - with new technologies coming our way in the next 5 years we need to start Universal Basic Income. I also recommend tax breaks for couples that don't have children but that's another story.
also how do they expect us all to work until our 70s when men still die on average at that age. work til we die? fk that.
@@kanedNunable Learn to grow weed.
An old friend of mine, a project manager in major earthworks grew weed in his loft. £30k a year, no more. This was the contribution to his pension fund.
He used to load up the back of his Land Rover Discovery with cans of red diesel from the plant tank on site, poured them all into a storage tank at home. This provided the heat for the grow room.
He had the electric routed round the meter for the grow lights. Lots of insulation in the roof so the police helicopters couldn't see the heat signature.
He had this process down to Japanese car factory efficiency, it was impressive.
Seriously if you're young and have no responsibilities (no partner/kids/house/car payments etc..) you should consider working abroad.
And what's even worse from what my understanding is talking to people they would vote for these fools again
You see, the thing is ...... Starmer is apparently a bit boring and is 'as bad as the rest' because he once ate a curry. Or, if you are part of the hard left, Starmer is a traitor and just the same as the Tories. If you look at it that way you can see why you would continue to support this shower LOL.
lol we need to Nationalise the privatised essentials
As VAT was a European Union Tax (EEC), in view of Brexit, why not abolish VAT, completely, cut govt spending accordingly, and let people keep more of their own money?
So we have collapsing real wages and discretionary spending but consumers need reining in because we have too much spending pushing up 'core inflation' necessitating steep interest rate increases just as the economy goes into freefall, and spending cuts to fill the 'black hole' in public finances, leading to further cuts in income, increasing the ratio of debt to GDP, setting us up for an era of perma-austerity as predicted by the paradox of thrift?
Then there's Brexit
yeah but as long as the 1% are ok its fine isnt it? we need to suck it up like good little plebs. meanwhile the super rich paying virtually no tax at all.
Correct me if I am wrong here, but Liz Truss' policies were never voted in/enacted as far as I am aware. So we are not overcompensation for rules that were 'too lose' since the rules were never in place for them to be overcompensated. It's kind of like me saying I am going to get a mongoose, not getting one, but still panicking about it and actually buying a snake to deal with it.
Brexit, where has that cheep workforce gone? Supply chain broken. Energy price caps should not have been raised. We need rent caps, and rent reductions, mortgage holiday's. Drastic times need drastic measures.
Do people in Britain not fix their mortgage rates? Here in Netherlands everyone always fixes them 20-30 years. I have only 1.3 % for at least 10 more years.
Not an option in the UK
In France, also, our mortgage rate was fixed for the duration when it was signed. We could change the repayments in line with inflation once a year, if we wanted to. So we did + rounded it up to the nearest multiple of 5 - it added on a few euros and knocked 2.5 years off the mortgage.
@@megannehover4013 France and the Netherlands are the exceptions, not the norm. I'm afraid in most of the world it is variable.
@@pritapp788 Most US mortgages are fixed, up tp 30 years.
you could but was a lot higher to do it. so most went for flexible. mine has gone up a fair bit since covid. its a nightmare.
you have those huge microphones, yet I could barely hear you chaps. the ads are blaring when they come on, that’s how far up I had to crank the volume.
Totally agreed.
Brilliant Will
I can't imagine that things would have been worse had Jeremy Corbyn won
At this rate an early election sounds like a best case scenario for the Torys.
But not for Labour.
@@chriselliott726 does it matter
@@davidpearn5925 it does if you want to see Labour in power for two or three consecutive terms.
@@chriselliott726 the Torys don’t have anything to run on now or anytime soon.
PR for the longer term genuine contest.
@@davidpearn5925 I would agree 100%. It's just important that the ensuing s※※※ sticks very firmly to this tragic Tory administration
In the Financial crisis in 1998, Malaysia was the only country that refused the IMF bail out because IMF insists on raising the interest rates.. Malaysia said NO. We manage the crisis in our own way and in the end Malaysia was much quicker to fix the problem than the rest of our neighbours like Thailand, Indonesia, South Korea..
The IMF is basically American owned. They can veto any decisions made because they hold all the power to do so. It's a very anti democratic institution.
where imalaysi?
So, they explain it but does it change anything?
Interest rates are a reflection of demand for currency ( there is no demand per day for money). Therefore low interest rates are merely a reflection of people’s inability or unwillingness ro borrow. If demand for currency in an economy is strong, interest rates will naturally rise to draw in the reserves needed to fund the borrowing. QE or central bank provided reserves serves no purpose because it is merely an expression of the over leverage of the few to fund speculation. Most of this leverage is via derivatives In which ordinary people don’t willingly engage. In 2008 the speculators were bailed out. This won’t be politically acceptable next time. The U.K. government will ensure that inflation remains high because its the only way to writ off their debt. Private sector leveraged speculative debt will implode. If wealth isn’t reasonable distributed no economy can survive
Too, I am not an economist, but what don't understand why, so little is spoken about the (fair/realistic) price of energy ( imho a major driver in an economy), soo much about tax/spending cut. Is this as governments don't have (real) business knowledge, only how to squeeze its citizens. Some BoE measures I get to steer inflation, but before any tax regulation, you first need to have a healthy domestic situation based a fair utility bill (iso now a highly commercially energy lobby stifling all further progress). Or is the UK already sold out?
I predict we will get austerity for 2 years and in the next general election, the general public will vote in the Tories because Labour spends too much.
@@Vroomfondle1066 Who doesnt like christmas?
Nobody considers the plight of savers. It's incredible! No-one ever talks about twelve years of incredibly low interest rates, eating away at people's hard-earned savings. Any conversation about interest rates just concentrating on mortgage costs is totally incomplete. Many elderly people, who don't have big company pensions, have traditionally depended on decent interest rates to eke out their paltry state pensions. Let's talk about that for a change.
True, but it is also worth focusing on 'real', rather than nominal interest rates. We all know how pernicious inflation is to savings. Interest rates can be 5 percentage points higher than last year, but if inflation is 8 percentage points higher, then you are still 'losing' money, in real terms.
@thanos You've done well. Good for you! Nobody talks about getting returns on savings anymore. It's all about mortgages. Cheap mortgages. Savers have had about twelve years of punishment. They have suffered. Now the interest rate is 3%. That is a paltry interest rate when inflation is running so high. Traditionally, interest rates were higher than the rate of inflation. And they should be so as not to erode people's hard-earned savings. These talking heads make me sick!
@thanos but in this economy the savers also tend to be the mortgagers. It's so lopsided towards the well off.
@@RobinoftheHod Yours is quite the most ridiculous comment I have read in a very long time. You are absolutely clueless.
@@nickharvey7233 I am old enough to remember a time in which interest was invaribaly higher than inflation. During the Thatcher years, for example.
Are there any tools left to fix the problems, other than the ones in government?
we need a new system. and UBI.
It is a hard one to face but you can't take the, 'they are doing it deliberately' card off the table - if you are looking at the whole picture responsibly as an economist, that has to be kept in the back of your mind - then next to that is the why. Why would they want to deliberately collapse the system and cause so many problems? It's that boring cliché Hagel thing.
''Not one stone here will remain...' He said to the disciples as they pointed out the Temple buildings. There is no fixing the system - it's already fixed. There is no-one to vote for - you people are smart, you know there is zero gravitas in any of the institutions - political and social. And the worst thing is, the 'people' in general will just go with whatever, as long as they can continue their selfish lives.
Government services spending cannot be reduced ? Is this true ?
So nothing to do with leaving the single market?
Some, but not as much as you might think (look around the world and see how much worse we are than others completely unaffected by Brexit). My best guess is 2 of the current 10% inflation could be attributed to Brexit (Which isn't a good thing, it just isnt as bad as most think)
Enjoy is a strong word
Duncan, what happened to you with BBC Newsnight?
You weren’t there long.
I disagree about inflation. A good chunk is logistics but a majority is monetary policy. When you give people money without an increase in production then it's value will plummet and goods will cost more. The only way to reverse this is to increase interest rates. It's removes the over supply from the system or just decrease the demand for goods.
Feeling relieved I left Babylon BrexitUK Imperialist matrix system forever. Never coming to the hamster wheel economic trap. My empathy only goes to the Brits who voted remain in the EU. UK had become an economic hell hole ever since the global financial crisis in 2008/9
where did you settle dude? can you recommend it? us non-wankers are not happy here.
Sensible man.
@@ruthymccabe They can keep my pension money lol. Just happy to free from Matrix UK 🤩. 27 EU countries to choose from it's a no brainer I simply moved though not perfect but to a decent pleasant society #Eurozone ☘️ 😉☘️
@@kanedNunable 27 Eurozone countries take your pick . Just saying 🤗.
How can you have such low interest rates and both irresponsible fiscal and irresponsible monetary policy for so long (decades) and not expect to find yourself in a doom loop?
I wonder when they will turn the money printers back on? I give it til March til we see more QE
Have they ever been turned off??
You need to get Gary Stevenson on?
Also, why not get on someone to discuss the MMT solutions to this crisis?
Because then the whole myth that the government needs to "borrow" or that there can be such a thing as a "black hole" in government finances would be exposed for the nonsense it really is and people would get round to asking awkward questions like why can't we have decent public services and a national job guarentee programme.
Why is the volume so soft?
Finally after 22 mins BREXIT gets a mention. The elephant in the room.
Will Dunn? Should’ve been a steak chef with a name like that! 😂
why won't they do a windfall tax on the energy companies
I am surprised that they do not mention the fact that the UK and the EU in general has been living beyond its means for decades. Essentially bankrupt nations. I think that needs to be addressed. If britain had less debt then the rate increases would not be that much of an issue. The fact that russia had 600 billion euro in reserves and a surplus economy on top of low national debt shows that they have been doing real economics before the war. Britain is a life support known as debt for decades.
Tariffs far to high, need to cap bills
No economy can grow, with 8 , million people with zero disposable income
& Billions Extra in heating bills, for hospitals, schools, care homes Etc
I'm tired of hearing that we need to take pain now for future long term benefit. I've been talking pain for decades now. Where is the future?
You do not manage a business in the same way as a household economy, so why is our government managing the UK economy like a household?
The overarching question you need to answer before you can effect any measures , is who is the economy in service of . Is it the citizens or is it capital ? the past fourty years of service to capital , while buying citizens slumber with debt have been a disaster .
The description was accurate, the prescription was hardly inspiring.
This was obvious from his first budget as chancellor but very few of us spoke up about it. Your instincts are right but you need to get ahead of the game.
Why are you calling them Rishi Sunak’s? He is not the Chancellor of the exchequer. Call them Jeremy Hunt’s!
Sorry but they have seen in their forecasts that inf is coming down and its nowt to do with Int rate hikes - in fact thats inflationary as businesses will pass on those costs as higher prices, plus the int on savings accounts / other financial instruments
i wonder if a planned economy might do better.
A neofeudalist Great Reset Forward?
Okay I'm lost. All these complex international issues are raising prices on things like food and gas. Interest rates are good at curbing people taking out loans, which of course. But the supply chain raising costs of food doesn't seem like something that'll be fixed with higher interests rates. How do more expensive mortgages help supply chain issues?
They need to put up rates to attract buyers for government Gilts we have debts of over 2.7 trillion to service
The Conservatives run a supply side economy and won't address strategic thinking even to something as simple as a gas storage facility in case of hard times or domestic food production to prevent food shock.
We need to
Subsidie farmers away from fertiliser farming
Build more wind Turbines and insulate more homes
The idea is that putting up interest rates will slow down the rate of inflation because it will supposedly make borrowing more expensive, thus decreasing the amount of borrowing in the economy, thus deflating the amount of bank credit (what you would call money) in the economy - therefore there will be less money, increasing it's value relative to the goods. This won't effect the supply shortages but it will mean that the little money people have left to spend will be able to purchase some of the limited quantity of goods available in these constrained markets.
@@SlowhandGreg The existing gilts (excepting index linked gilts) will be serviced at the interest rate they were issued with. New gilts will have to be priced competitively relative to other comparible investments, so by increasing the interest rates, the BoE should be making future government borrowing more expensive in the future, notwithstanding that pension funds and the like are obliged to hold government debt because of regulatary obligations, which should maintain some downward pressure on gilt yields.
@@Vroomfondle1066 Gilts come to term all the time if your debt levels are such that your just replacing them then it's at the new rate so it's not just for new debt
Your comment on money supply would be valid if we had normal inflation but the bulk is Corporate Supply Side on inelastic commodities (essential food and energy) in this case restricting money supply will have little effect we also have a Brexit multiplier as a trading nation everything we import and export to from the EU is more expensive.
We also had over 1 million workers leave the UK over Brexit resulting in acute labour shortages ex- Pork production lack of abattoir workers meant pigs culled and the carcasses burnt lack of vets and additional paperwork and trade barriers has seen a collapse in exports driving up domestic prices
Restricting the money supply isn't going to resolve domestic food production which is going to continue to spiral down requiring further imports to cover the ever increasing shortfall
@@Vroomfondle1066 That's right, because the real problem now is we all have too much money!
You need to get the sound level improved.
Yeah...very quiet right?
Pop shield
keep interest rates low - being someone with money il simply buy more houses then! I did that 8 years ago and sold this year earlier. this causes speculative bubbles thou. higher interest rates are needed big time
but then that stops young people buying and allows the rich to buy them still. not sure what the answer is... also means a lot of us will lose our homes and the rich buy them cheap at auction. lose lose for us. young been screwed for the last 50 years.
The solution is clear and straightforward.
Increase the tax on billionaire and millionaire income, on inheritance and windfall profits adequately.
Channel the money directly to all components of the welfare state - healthcare (NHS), education, energy, housing, policing and food security
Everybody has to be clear that public money collected through taxation should be used only for WELFARE and not for anything else.
And it is important to be clear that Welfare is a fundamental democratic right of people. Nobody should be made to PURCHASE welfare. It should be free.
Crisis support such as the furlough scheme should be understood as being a part of welfare. Welfare measures should not create debt for people. They should never be required to repay debt incurred on money spent on welfare.
While I agree with the initial point, your proposition that taxes should only be used for welfare is completely bonkers.
@@alan_davis Let me correct this. After welfare needs have been fully met, taxes may be used for any other purpose.