All Aboard Britain's Uncertainty Express

All Aboard Britain's Uncertainty Express

about 1 year ago2 mins

The UK government unveiled some much-trumpeted plans on Wednesday, designed to get the country’s economy back on track.

What does this mean?

It's been a rough ride for the UK government lately: after botching its budget back in fall, it lost the trust of everyone from investors to citizens – and since then, it’s watched helplessly as the economy slipped into what’s probably a recession. Plus, folks across the country are being squeezed by record-high living costs, prompting nation-shaking strikes in crucial industries like rail and healthcare. Little wonder the opposition party is leading in the polls.

Cost of living crisis
Source: Bloomberg

Now, the government has set out a list of top priorities in an attempt to get things chugging along again: it’s aiming to halve inflation this year, boost the economy, and reduce public debt by the end of this parliament’s term – 2025, at the latest.

Why should I care?

Zooming in: This could be a nothingburger.

The government's plan might sound decent, but when you actually peek under the lid, things aren’t quite so peachy. First off, these goals aren't exactly ambitious: economists are already predicting that inflation will halve this year, and the Bank of England’s expecting the economy to grow by 2024 anyway – even under its worst case scenario. And as for that public debt pledge – to make it happen, the government is either going to have to bring in more revenue (aka raise taxes) or cut spending. Try selling that to hard-up Brits.

The worst could be over

The bigger picture: Misery loves company.

2023's not looking too good for the UK economy, with economists predicting it'll be hit with one of the worst recessions in the whole G7. But hey, at least Britain won't be alone in that boat: the IMF’s warned that a third of the globe’s economies and half of the EU will be dealing with a recession this year. So, you know, at least there's that.

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