Bank of England Holds Interest Rate at 4.75% but Warns of UK Stagnation Risk

THE GUARDIAN: Central bank downgrades growth forecast amid threat from budget fallout, rising inflation and Trump trade tariffs

The Bank of England has kept UK interest rates unchanged but warned Britain’s economy is on the brink of stagnation after Rachel Reeves’s budget as the world faces stubbornly high inflation and the risk of Donald Trump reigniting trade wars.

Holding interest rates at 4.75% in a widely expected decision, the central bank’s monetary policy committee (MPC) said on Thursday it had slashed its UK forecasts for the final three months of the year with a prediction of zero economic growth. The Bank had predicted growth of 0.3% as recently as November.

Highlighting the chancellor’s £40bn tax-raising budget, alongside rising geopolitical tensions and trade policy uncertainty after Trump’s November election victory, the MPC said growth was faltering while inflation risks remained. » | Richard Partington, Economics correspondent | Thursday, December 19, 2024

UK’s Economy Shrinks Unexpectedly by 0.1% in October

THE GUARDIAN: GDP figures underline scale of challenge for Labour to get the economy growing

Britain’s economy shrank by 0.1% in October, underlining the scale of Labour’s challenge to get the economy growing.

Figures from the Office for National Statistics showed the unexpected fall in GDP was driven by declines in construction and production, while the dominant services sector stagnated. » | Guardian staff and agencies | Friday, December 13, 2024

THE TELEGRAPH:

Britain ‘on recession watch’ as economy shrinks: Britain has been placed “on recession watch” after official figures showed the economy shrank for the second month in a row in October. »

Michael Lambert: Making Brexit Work with Mission Led Milestones and Other Nonsense

Dec 7, 2024 | Keir Starmer this week announced six new milestones to go with his 'Mission led' government. He made no mention of the economy or how he expects to pay for the missions.

Also discussed in a tongue-in-cheek manner pointing out how businesses are suffering and how the UK economy is suffering from new post Brexit regulations.

UK immigration has reached over 800,000 partly because of the shortage of workers following Brexit.

The UK government continues to blame Covid, the Ukraine, and the EU for their own failings.

Michael Lambert: So Many Problems with the UK Economy

Nov 23, 2024 | The UK economy is in a bad way and it is difficult to see how it can improve. Government borrowing in October was £17.4 billion, much more than expected and a record amount for any October since records began. Interest on the national debt is currently £102 billion per year, equal to twice the defence budget.

Retails sales in October were down and energy prices are set to rise further. The government's plan is to go for growth whilst businesses are closing, and many are struggling.

Electricity prices are 78% higher than the average in the EU and four times the rate in the USA. Foreign investors own much of our infrastructure and major businesses, and a Japanese consortium has just been contracted to operate the new Elizabeth Line (Crossrail), taking over from the Hong Kong Metro.

Government waste seems out of control. Under the Public Order Act, police are able to detain and punish anyone who expresses opinions which they disapprove of.

In another apparent waste of public money 470 delegates from the UK attended Cop29 in Baku in Azerbaijan, and the owner of Clearsprings Ready Homes Ltd which provides accommodation for asylum seekers made a profit of £62.5 million in the year ending (y/e) January 2023 and £91 million in y/e January 2024. It is difficult to see any positive outcome for the British economy.


Michael, I wholeheartedly agree with your take on the state of the UK. I hate to sound negative, but I have lived long enough to see how the UK operates. I am sorry to say that I see no future whatsoever for this country. The country will just go on bungling along. First, we lost the Empire. Then, our economy went down and down until we became the “Sick Man of Europe”. Then, along came Lady Luck who shined upon us, blessing the nation with great good fortune — a fortunate stroke of serendipidy. We were given the chance to enter the then Common Market. The UK economy started to bloom again. That was until economically illiterate, backward-thinking people insisted that the British electorate be given that stupid Brexit referendum. The result is well-known, and its effects on the UK economy, too. So, we are now on a downward slide into poverty and insignificance.

Current British attitudes amongst the far right show no signs of contrition. On the contrary, they are doubling down, and they are pinning their hopes on the recently elected felon in the USA to reverse their fortunes. I fear that they are “whistling Dixie”. – © Mark Alexander

UK Inflation Rises to 2.3%, Increasing Pressure to Delay Interest Rate Cut

THE GUARDIAN: Figure is above Bank of England target after energy bills push up prices

Inflation increased to 2.3% in October, heaping pressure on the Bank of England to delay further interest rate cuts until next year.

Figures released by the Office for National Statistics (ONS) on Wednesday showed that a rise in energy bills pushed up the consumer prices index (CPI), reversing a downward trend this year in inflation, which was 1.7% in September.

The figure for the year to October was slightly above the 2.2% City economists had expected. » | Phillip Inman | Wednesday, November 20, 2024

THE TELEGRAPH: Interest rates to ‘stay higher for longer’ after inflation blow: Interest rates risk staying “elevated for longer”, economists have warned, after inflation rose at a faster pace than expected last month. / Policymakers are “unlikely” to cut borrowing costs at its meeting in December, analysts said, after the pace of price rises surged back above the Bank of England’s 2pc target in October. »

The Observer View on Trade Relations: Closer Ties with EU Is the Lever for Economic Growth

THE OBSERVER: Amid sluggish UK productivity and global insecurity, pulling closer to Europe is diplomatically and economically vital

Achieving the fastest sustainable growth in the G7 was the Labour party’s highest-profile pledge going into the general election last July. Chancellor Rachel Reeves has said that boosting growth is “at the heart of everything she does”. But there was concerning news last week with new figures showing the economy grew by just 0.1% in the three months to the end of September, falling significantly short of expectations.

Some business leaders have linked this anaemic growth to uncertainty in the run-up to last month’s budget. But it will largely still be a product of factors outside the new chancellor’s control, including the decisions of the last Conservative government.

It is nevertheless disturbing news for Labour as well as for the country. The Resolution Foundation forecasts disposable household income per person is forecast to rise by just 0.5% a year on average over the course of this parliament. The results of the US election sound an important alarm bell about the extent to which voters are willing to punish incumbent centre-left governments for failing to deliver noticeable increases in living standards. » | Observer editorial | Saturday, November 16, 2024

Michael Lambert: How Brexit Is Destroying the UK Economy

Oct 26, 2024 | Brexit has been a catastrophic disaster for the UK economy. Every day we see stories in the media about the many problems that Brexit is causing.

The government recently invited the CEOs of various multi-national companies to London to discuss possible investment in the UK. With so much of our infrastructure and so many of our businesses already foreign owned, the benefit for more multi-nationals controlling more of our economy is questionable.

Barriers to trade since the UK left the EU are causing serious and long-lasting damage to our economy and yet the Labour government under Kier Starmer insists that they will be not ever return to the EU and that instead they intend to "tear down barriers to trade", barriers which they have no authority over and cannot tear down.

Keir Starmer continues to refuse to consider agreeing to the EU's offer to allow UK students to take part in limited one- or two-year exchanges with EU students, thereby denying our youth an outstanding opportunity.

If we are ever to return to the EU, it will require a substantial majority of the country to be in favour. Sadly, there are still many people who are stupid enough to argue that Brexit was a good idea and that we are better off out of the EU.

Two commenters to my last video are examples of the extreme stupidity of such people.

Michael Lambert: The British Economy Is Damaged beyond Repair for These Three Reasons

Oct 12, 2024 | This week I visited Gothenburg in Sweden and was shocked by how much better the quality of life is there.

It reminded me again of just how bad the economic situation in the UK has become since Brexit and for three different reasons. The UK economy has passed the point of no return.

We are now destined to decline indefinitely thanks to three reasons. First Brexit has severely damaged the UK economy whereby it is now almost impossible for small- and medium-sized business to trade with the EU because of post Brexit restrictions. This has cost the UK economy £40 billion in lost taxes annually.

The new Labour government under Keir Starmer has made it clear that, whilst they would like to improve relations (reset) with the EU, there will be no return to the Single Market, Customs Union or Freedom of Movement.

The UK property market where houses have become unaffordable for most people has resulted in so much money being sucked out of the economy that people have much less disposable income and that the economy has suffered accordingly, with many pubs, restaurants and shops being forced to close.

Finally the sale to foreigners of many of our major companies and vital utilities and infrastructure has weakened our economy since profits from these enterprises are being sent to foreign shareholders who have very little interest in anything other than a return on their investments.


Politicians today are clueless! They can’t run and manage the country anymore: they make a dog’s dinner of it. Yet politicians of old ran and managed a huge empire! Politicians of yore must have been a hell of a lot smarter than those who are in control today. Politicians today can’t run this small country let alone empire. – © Mark Alexander

P&O Ferries Owner Pulls £1bn UK Investment after Rayner Attack

THE TELEGRAPH: Dubai company chief withdraws from investment summit after Deputy PM’s criticism of employment practices

P&O owner DP World has put a £1bn expansion of one of Britain’s biggest container hubs on hold after ministers attacked the ferry company’s employment practices.

The Dubai-based business had planned to announce the investment in London Gateway port at a summit convened by Sir Keir Starmer, the Prime Minister, next week.

However, Sultan Ahmed bin Sulayem, the DP World boss, will no longer attend the event after Louise Haigh, the Transport Secretary, and Angela Rayner, the Deputy Prime Minister, described P&O as “unscrupulous” and “exploitative” this week. » | Christopher Jasper, Transport industry editor | Friday, October 11, 2024

American Corporations Are Buying Up Britain–It's Very Bad for Ordinary British People: Angus Hanton

Premiered Sep 19, 2024 | NTD’s Lee Hall sits down with economist and entrepreneur Angus Hanton to discuss how Britain’s businesses are being taken over by U.S. interests, the scale of the takeover, what’s behind it, and why no one is talking about it.

Michael Lambert: Brexit Has Weakened the UK Economy and Made Growth Almost Impossible

Jul 27, 2024 | The new Labour government under Sir Keir Starmer has started well with many excellent new measures which include 40,000 more NHS appointments every week and 700,000 urgent dental appointments per year. All of these new measures are fully funded. However, any further extra spending which is urgently needed will have to come from economic growth.

The UK economy is not doing well with a recent survey showing that almost 540,000 businesses are in significant financial distress and 47,000 are on the verge of collapse.

The previous Conservative government squandered £100 billion which contributed to the current dire economic situation. However, it is Brexit that has caused so much economic damage and made it so much more difficult, if not impossible, for the UK economy to recover. Growth seems impossible.


We all know whom we can thank for that ridiculous Brexit. All the clowns! The first three clowns that come to mind are Cameron for calling the Brexit referendum, Farage for instigating the trouble in the first place, and BoJo for lying to the electorate and making a dog’s dinner of the whole thing. – © Mark Alexander

Did Thatcher Ruin or Save the UK Economy?

Jan 29, 2024 | The economic impact of Margaret Thatcher's economic policies was immense. This is a look at the impact on inflation, unemployment, growth, inequality and the long-term structure of the economy.

Skint: The Truth About Britain's Broken Economy | Channel 4 Documentaries

Jul 2, 2024 | Britain feels under-funded and falling apart. On the eve of the election, as politicians argue about the causes, economist Tim Harford looks at what the numbers reveal about the broken state we're in.

Michael Lambert: The Tories Have Wrecked the UK in Pursuit of Brexit

Jun 29, 2024 | The past eight years of Conservative government have been disastrous for the UK. Since 2016 and the #referendum vote to leave the EU, five prime ministers have struggled to run the country, wasting billions through incompetence and dishonesty often blaming failure on Covid19 and Vladimir Putin.

Nigel Farage as an MEP spent years arguing for Britain's withdrawal from the EU and Boris Johnson as prime minister agreed to a very hard Brexit.

Eight years after the referendum, the UK economy is in a very bad state and is rapidly deteriorating. Nurses, doctors, teachers, police officers, and others, are leaving their jobs and many are emigrating. Nothing seems to work, and Brexit has cost the UK more than £100 billion in lost trade and £40 billion in lost taxes.

Gone from being a well-respected medium-sized nation with a reasonable and stable economy, the UK is now an economic disaster and a worldwide laughing stock.

Next week Keir Starmer and the Labour party are widely expected to be elected with a large majority.

Bloomberg Originals: Why the UK's Economy Stopped Working

Jun 21, 2024 | The UK’s new government will inherit an historic economic challenge as a result of Brexit, the pandemic, Russia’s war on Ukraine and the debt burden exacerbated by all three. Inflation is just one obstacle facing the Labour Party under Leader Keir Starmer, the Conservatives under Prime Minister Rishi Sunak or whomever the country chooses. While raising taxes or increasing debt are unlikely options, there is a potential solution to Britain's economic crisis: increasing productivity and efficiency.

Why the UK Will Lose the 2030s

May 21, 2024 | The United Kingdom is a nation once known as the empire on which the sun never sets. The 19th century saw the UK as the world's wealthiest and most powerful nation, victorious through two world wars. However, ominous clouds now loom over this historical powerhouse.

In this video, we explore the multifaceted crises threatening the UK's future. From housing shortages and Brexit mismanage-ment to a looming demographic disaster, the fabric of British society is fraying. The decade ahead could see the UK losing its permanent seat on the UN Security Council and struggling to meet its massive public service obligations.

From the heights of British naval dominance and the Industrial Revolution to the post-war economic shifts catalyzed by the Bretton Woods system, we'll examine the demographic time bomb of an aging population and the strain on public services like the NHS. With high tax rates driving brain drain and protests simmering across the nation, can the UK pull through these formidable challenges? Stay tuned as we unravel the complexities and imperatives of this critical moment in British history.

Michael Lambert: Starmer Stubbornly Sticks to Disastrous Brexit

Jun 15, 2024 | The Labour Party manifesto was launched this week. Much of it concerned economic growth which will be essential if damaged and neglected public services are to be fixed.

Keir Starmer claims that growth can be achieved whilst ignoring the major reason for our economic troubles which is Brexit He claims he will be able to improve our deal with the EU despite having been told repeatedly that this will not be possible.

Starmer has made it clear that beyond certain funded changes other reforms will only be possible if funded by growth. Outside the EU, the UK will find it almost impossible to grow.


This is an excellent synopsis of the parlous state of the UK economy and its outlook for economic growth under Keir Starmer's leadership. I agree with Mr Lambert's viewpoints TOTALLY. The Conservative Party in recent years has been a disaster for this country; now, the Labour Party is promising to be equally disastrous in so many ways. How can our economy hope to grow after locking ourselves out of the BIGGEST single market in the world, which is right on our doorstep?

When we were in the EU, this country was doing rather well. Have these politicians never heard of the old saying — 'If it ain't broke, don't fix it!? Whilst in the European Union, there was truly nothing to fix!

Nigel Farage really has been the architect of this country's downfall. The man is a bigoted, loudmouthed, troublemaker. History is not going to be kind to that man. Unfortunately we have to live through the nightmare the clown has created. One can but despair. This country's future is bleak indeed.

At no other time in my life have I ever felt DISENFRANCHISED. Now, I do. TOTALLY. There is no decent political party to vote for. I had pinned my hopes on the Liberal Democrats, but Ed Davey hasn't had the courage to promise the country that he would try and take us back into the EU. That is a great disappointment to me, and probably to many other Remainers as well. In fact, in my opinion, he has lost his best chance of elevating his party ahead of the Tories, because I believe that such a move might well have catapulted the LibDems to a powerful position. He would have had nothing to lose by such a commitment, and everything to gain. Again, one can but despair.

I cannot vote for any party that is not committed to our return to the EU. So that leaves me without a say in the future of this country. I find it difficult to vote for a party whose policies I disagree with. The whole thing saddens me. – © Mark Alexander

14 Years of Tory Cockups

Jun 3, 2024 | “The Government time after time has taken the wrong decision”

“The 7 million-plus NHS waiting list, the 2 million-plus fall in the labour force, the world-beating rate of inflation and spiralling mortgage rates are all the result of a succession of bad policy choices made by Conservative ministers at crucial times in the past 13 years.”

Words of truth and wisdom spoken by a Labour member of the House of Lords this time last year that you won’t see mentioned in the mainstream media. But the words need to be heard and heeded, which is why you can hear them here.

Professor Lord John Eatwell is an economist with a PhD from Harvard. He was, until recently, president of Queens’ College Cambridge and Professor Emeritus of Financial Policy in the Judge Business School. He entered the House of Lords in 1992 where he was Labour’s frontbench spokesperson for Treasury and Economic Affairs.

So, Professor Eatwell knows his stuff on economics. And this is his conclusion of what’s happened during the years of Tory rule since 2010: “In the face of every major shock suffered by the economy over the past 13 years, the government have time after time taken the wrong decision. In every case, misguided government policies damaged investment, growth and productivity.”

The government is continuing to make policy mistakes, said Lord Eatwell. “This string of bad decisions, from austerity to EU trade, to fiscal incontinence, to squeezing the economy, has undermined investment and growth for the past 13 years” Now it’s one year later, so we have 14 years of Tory mistakes. …

Jonathan Pie: Recession Hits

Feb 17, 2024 | 14 years of fiscal responsibility and suddenly we're in a recession! What the hell happened?

This country is f****d. And it was the Tories “what done it”! Kick the ruthless, incompetent, greedy “basterds” out! – © Mark Alexander

Michael Lambert: Rishi's Recession and Chaos - All Part of the Plan?

Feb 17, 2024 | Last week Rishi Sunak repeatedly claimed that the UK had turned the corner and that his unspecified plan was working. It was also announced that the UK had been in recession during the last two quarters of 2023.

Sunak's previous employer, Goldman Sachs, published a damning report blaming Brexit for much of the UK's current economic problems.

Social services, the NHS, schools, the Courts, prisons and the military are all desperately in need of further funding and better management. At the same time businesses continue to suffer.

In two by elections at Wellingborough and at Kingsword, the Tories were trounced whilst Reform UK gained 11% in one and 13% of the votes in the other, showing themselves to be a serious threat to the Conservatives at the general election especially if Nigel Farage returns as leader.