The Economy of the UK Is in Serious Trouble

Disclosure: This is not financial advice. When investing, your capital is at risk. Investments can rise and fall and you may get back less than you invested. Past performance is no guarantee of future results. 0.15% FX fee applies on some trades.

There's a reason we include confidence and stability on our National Leaderboard. It might not be an easily measurable economic metric, but it can have a massive effect on a national economy. If people don't have confidence that a country is in good hands and will be managed well into the future, then they will stop investing there. So why is the UK having a crisis of confidence, and to what extent is London to blame for the two-tier society that the UK is becoming?

This video was made possible by our Patreon community! ❤️
See new videos early, participate in exclusive Q&As, and more!

▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀
Check out our other channels ▶️
Epic Economics @EconomicsIsEpic
Context Matters @Context.Matters

And our Language Channels →

Also on Apple Podcasts or anywhere else you listen!

#EconomicsExplained #EconomyoftheUK #UnitedKingdom

▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀

ECONOMICS EXPLAINED IS MADE POSSIBLE BY OUR PATREON COMMUNITY 👊🙏

👑 ROYALTY CLASS 👑
Juan Benet

UPPER CLASS
Valkmit, Randall, Jeromy Johnson.

ELITE CLASS
Charles Youngs.

UPPER MIDDLE CLASS
Michael Wakim, Pineapples&bricks, Adrian Bellomo, Peter Wesselius, Michael Ling, Stephanie Roth, Frank Soltero, David Poliakoff, Jay Eno, Grégoire Duchêne, Sophie G, Brett Jubinville, Anthony Roberts, jill hoffman, Nathan Ngumi, JKH, Post Apocalyptic In Missouri, Laor Glukhovsky, Kib Bibens-LeFebvre, Forodon, Paul Ashworth, Wendover Productions, Andrew Harrison, Igor Bazarny.

MIDDLE CLASS
Justin Thiele, William Sherlock, Gerhardus, Derrick Yowell, DionysusLin, BUBBA CONWAY, Chris, Brian, Vladimir Zotov, Seth, Dragan Alexandru, Tenebrion, Jason, Alex Wong, Robert Abraham, Jamie Costello, Rick Van Velden, Leah Klearman, Bacongravy, Klaus Clemens, Ps0Fa, Abel, Eric Slimko, Empyre18, Brian Jackson, Istvan P, Leonid Sorokoumov, Thomas Davenport, Nicholas Luchetta, Kim Brand, Ted Marcy, Joshua White, John Issitt, Joe Ryan, Patrick Staight, Wees Kendall, Shane Guthrie, Andrew Baartz, Jim Kirker, Karan Mehta, roGER, Marton Csikos, Randy Cleary, Arjan, Liubov Zvereva, Michael D. Hall, Long Phan, Craig Mews, Kent Klatchuk, Zac Woodrell, Roman~1, Chris Hawkins, Wesley Fite, Robert Nyborg, David McIlveen, Anthony, Arend Peter Castelein, Daniel Alberto Vázquez Rodríguez, Kamil Sicinski, Dodd Willingham, Leo Vassershteyn, "How long can a profile name be... this long... Wow, this is longer than I would have expected. Good lord, the letters! Secunda!", Michael Kürbis, Hugh Harris, David W., Dar H, Will, Kheng Lai Tan, David Taylor, Scott Greenwood, Jane Walerud, Zachary Demko, Michael Wolff, Siegfried Eggl, PM, Jack Annear, michael, Franklin, Trevor, Marcel Roquette, Daniel Hall, Connor Costello, John D Tyler, Petronio Coelho, Kevin MacIntyre, Travis Thompson, Matthew Eggleston, Kenneth Lum, Andrew Vinnichenko, Zachary Kasow, Johannes, Reuben Field, Nigel Pauli, Jacob, AB3, Sridev, Matt McKee, Victor T., John C, Rimvydas, John Downie, Donald Wedington, Demo sthenes, Ed, Hayden van Reyswoud.

[snm]

The problem with the UK is that it is run by billionaires for billionaires, most of them are not even British.

[PLuMUK]

London cannot ruin Britain. It achieved that decades, if not centuries ago. London has always behaved as if it is a separate state rather than the capital city, and the North-South divide has been an issue from before the Industrial Revolution. The government is full of platitudes about levelling up, but achieves little. Politicians generally see little benefit from levelling up. They may be, supposedly, the representatives of the whole country, but their every thought is influenced by the Londoncentric way that the country is run.

[relentlessaddictjm]

The UK didn't really learn from the financial crisis. They thought it was a temporary blip on the never ending gravy train of banking and financial services. Austerity destroyed any chance it had of reshaping the economy to be more diversified and solid. When it was apparent the world had moved on from deregulated banking as a bedrock of the economy it was left behind. Couple this with being a huge import economy with a weakening currency and actively voting to make importing more difficult and a government who still blindly believes everything is going fine and we are where we are.

[austinbar]

Sadly with each passing day we can see the impact this awful policy has had on the UK. Tied up in red tape and tariffs with lower GDP than before the pandemic whilst the others in the G7, including Italy, are above. The lower GDP means we do not have the headroom to pay our way in the world and must resort to borrowing.Whilst there are rich people in the UK; a great many of us are poor and now we are poorer still. What steps can we take to generate more income during quantitative adjustment?

[aytraf]

Unfortunately, the video doesn't comment much on regional inequality at all, which I was expecting from the thumbnail, premise or introduction. Otherwise, it's a nice case study.

[fairybuddy-angel]

France and Spain have both managed to create regional centres. Places you visit that feel significant and of importance; Toulouse, Bordeaux, Lyon or Bilbao, Santander, Seville. Good infrastructure investment and good regional politics with local decision making seems key.

[nickbarber]

For as long as I can remember the UK economy has been in serious trouble (I'm 59)
I asked my 94-year-old dad if he remembered a time when the UK was not in crisis...he couldn't....

[MrShahin]

Much of the wealth in UK, especially London, lies in property. At some point, the penny will drop and people will realise that London is overvalued as a place to work and live and when that happens and property prices plummet, there will be a huge drop in national wealth across the board

[JasRoss]

As an American who moved here for his British wife, here's my perspective: As an IT professional with >20 years experience, the wages for those jobs are abysmal in the UK as compared to the US. Friends I have spoken to across the entire professional spectrum all say the same. The salaries offered elsewhere are more appealing for the same work. It is brain drain, pure and simple. Then you compound the decades of under-building and the housing shortage and you're just constantly fighting this unnecessary uphill battle. We're moving out of country in 2024.

[Justin-jhym]

Osaka use to be called the Manchester of the east, it has since overtaken - Osaka's current GDP per capita is around $59k vs Manchester $37k.

[burntheladder]

The thing is, London is so absurdly expensive that few Londoners even get to enjoy the extra money.

[Bozebo]

Trying to get investment for a technology company in Scotland (or anywhere not London) goes like: "why not in London?", "Because the company is in Scotland and most of the demand and opportunity for wealth growth via the investment is in Scotland", "oh" (and in one particular case this was an Aussie investor too)

And foreign investment in London typically means the assets and revenue will in the future not be via the UK (usually moves to the US), so it literally extracts wealth from the whole UK on average.

[moledaddy]

Governments need to realize focusing so much on financial services in pursuit of immediate gdp growth is short sighted. The British government should exist to serve the British people, not to serve gdp growth

[alexanderflorence]

We should point out that our current PM was one of the investment bankers directly responsible for kicking off the 08 crash

[BreakingUFC]

London has been toxic to the average Brit for centuries. We're seeing more devolution now but it's almost too little too late. I'm from Birmingham, what was once an international city. A little known fact was that the UK Government, concerned about the size and success of Birmingham, introduced the Distribution of Industry Act and something called the ‘Brown Ban, ’ attempted to shift industrial and office activity away from the city to other parts of the country. My city suffered. Business relocated and London swallowed everything. It's a real shame.

[dbsk]

This was not really as insightful as I expected as someone who actually works in financial services in London. Agree with the comments that say this should talk more about the other regions in the UK

[brownycow]

Britain is governed by and for London, the rest of the UK exists to provide London with workers, water and food.

[jamie]

Productivity has been in decline in the UK since the mid-nineties. Its been overdependent on financial services for decades, whilst the rest of Europe had grown a deep culture of mid-sized businesses, manufacturing, managment and business process expertise. Faced with the question about productivity, outside of finance, no one in the UK really knows how to go about this and what it would take. It will be a long road to get there...

[omardub]

Economies heavily reliant on a single industry, such as finance in the UK, oil in Venezuela, and tourism in Spain, will always be prone to instability and vulnerability to global market changes.

In the UK, post-Brexit, this problem of over-reliance is often overshadowed in media discourse by a focus on low-skilled migrants, ignoring the critical need for economic diversification and the reluctance of high-skilled migrants to relocate there.

Neither the Conservative nor Labour parties have adequately addressed this diversification issue. The UK government’s move from an Industrial Strategy to a new Plan for Growth post-Brexit raises further doubts about their commitment to a diversified economic future.

[marianhunt]

It's a crisis of poverty for working people, not a crisis of confidence.