Will the UK turn to the IMF for a bailout?

[shortbread]

I know it sounds ridiculous now but hear me out.

As we all know the country is currently facing a severe economic crisis marked by spiraling debt and rising interest costs, which threaten financial stability and starved public services. With such limited options, Rachel Reeves is increasingly cornered, as backseat Labour MPs oppose any cost-cutting measures, and the country cannot endure additional tax hikes without risking economic contraction. As these constraints tighten, the likelihood of turning to the International Monetary Fund for financial assistance grows in my opinion. I don't think the British public realise the depth of the crisis and the diminishing domestic policy options available to stabilize this economy.

Rising UK gilt yields have heightened borrowing costs, signaling investor concerns about the UK's fiscal stability and making it more challenging for the Chancellor to raise funds through traditional bond markets. As her borrowing options become constrained, she may need to consider alternative measures, including seeking financial assistance from institutions like the IMF, to stabilize the economy and reassure markets of the UK's fiscal discipline. Perhaps it's the shock the country's public and backseat MPs need to wake up and smell the coffee!

 

[JaDed]

Economy is a measure of overall goods and services produced, for an Union as small Britain how are they bringing those changes?

 

[oatmeal]

No chance, eventually something will have to give and the government will take unpopular measures or collapse and the next PM has to resolve the same issue. Or before that the macro economic conditions improve so the BoE can bring interest rates down and spur growth

 

[shortbread]

Rachel Reeves 'pushing Britain towards 1976-style IMF bailout and economic collapse'

Rachel Reeves is pushing Britain towards a 1976-style bailout by the International Monetary Fund, top economists have warned.

The Chancellor's handling of the economy could set the UK back nearly 50 years - when soaring borrowing and inflation forced the country to take a $3.9billion loan to secure the value of sterling.

Professor Jagjit Chadha, the former head of the influential National Institute for Economic and Social Research (NIESR) has said that the economy has reached the brink of "collapse".

He told Liam Halligan's "When the Facts Change" blog: "I'm in a world in which I could imagine it [an IMF bailout] happening, and we'll be bereft in that case.

"We will not be able to roll over debt, we will not be able to meet pensions payments... benefits will be hard to pay out."

Mr Halligan himself delivered a sobering assessment of Britain's financial health to GB News on Friday.

"I'm generally an optimistic person and I generally believe in the entrepreneurial vigour of the British people, but the economy is in a bad way," he said.

Recent NIESR forecasts have shown that skyrocketing borrowing has left Ms Reeves facing a new £50billion "black hole" - more than double the size of the deficit Labour says it inherited from the Tory Government.

As a result, the Chancellor is poised to hike taxes in a bid to cover the shortfall.

"We need to talk about the fiscal dangers the UK faces," Mr Halligan added.

"If you try and meet a hole in the Budget by just raising tax rates, as Labour like to do, you pull a tax lever and you get no tax revenue, because you kill enterprise."



Andrew Sentance, who once served on the Bank of England's Monetary Policy Committee (MPC), said the situation was "very reminiscent of the 1970s".

"Rachel Reeves is on course to deliver a Healey 1976-style crisis in late 2025 or 26," Mr Sentance said.

"Like Healey, she has massively boosted public spending, borrowing and taxes - fuelling both demand-pull and cost-push inflation. Unless policies are reversed, we are heading for an economic crash."

Britain's borrowing costs are now higher than Greece's, he added - which he dubbed an "indictment of where the UK is".

Fellow ex-MPC member Willem Buiter issued Ms Reeves a dire economic ultimatum.

Unless the Chancellor changes course, Mr Buiter said, she would face a level of market scrutiny which "will be at least as effective as the pressure from the IMF was in the 1970s".

"I think there's no realistic alternative to basically breaking the commitment not to raise key taxes, personal income tax, VAT, during this Government's term in office. So she will be forced to do that," he added.

Reform UK leader Nigel Farage, meanwhile, told The Telegraph: "I have a sense of deja vu. It is the 1970s all over again, it's just that our social position is even worse than it was then.

"We had terrible times in the '70s economically, but at least we were fairly united as a country, as a culture. This time we have bad economic times here, worse coming, in a nation that is bitterly divided, so it's not a happy formula.

"We are in a debt spiral and I expect Rachel Reeves's Budget in the autumn will make it even worse. In fact, we're not very far away from being in an economic doom loop."

"This Government is taking the necessary decisions to stabilise Britain’s finances and kick-start economic growth, backed by a fiscal strategy that has been endorsed by the IMF," No11 said.

"Our plan for change will put more money in the pockets of working people and our ironclad commitment to our robust fiscal rules has helped cut interest rates five times since the election.

"We're also driving down Government borrowing so that we can invest in better schools, hospitals and services for working families."

Rachel Reeves 'pushing Britain towards 1976-style IMF bailout and economic collapse'

The UK could be left unable to pay out its own pensions if the economy remains on its current course, one leading economist said

www.gbnews.com

 

[DeadlyVenom]

"unless the chancellor changes course"

I've heard this a lot, but what other course is there? We have been stagnating year after year, any attempts to make the state burden smaller result in uproar, any attempts to raise taxes result in uproar.

 

[Technics 1210]

"unless the chancellor changes course"

I've heard this a lot, but what other course is there? We have been stagnating year after year, any attempts to make the state burden smaller result in uproar, any attempts to raise taxes result in uproar.

I would like the people who believe taxing the poor to give us other ideas.

The obvious one being lowering taxes to stimulate the economy, but can't do that cos UK mustn't show up the wretched and failed EU state.

UK is doomed. Rich leaving the UK, middle class UK about to be ripped apart, and the poor, well they got nothing.

 

[ElRaja]

the UK public finances are cooked, the tax burden is getting to the point where the only answer is a parallel economy, civic buy in is at an all time low as gov services are creaking at the seams.

the public sector is dominated by operational expenditure whilst we have virtually zero capex in infrastructure, both physical and digital, and housing. uk unis are world leaders but we have zero productivity growth for nearly 20 years now. the social safety net is too broad, itll reach a point where its not viable for 30 million workers with virtually zero income growth over a decade to support nearly 2 million long term sick who have inflationary care needs.

the tax base is totally focussed on rinsing workers, whereas wealth taxes can be a touchy subject in a country where land and home ownership is such a core part of identity, but this is eventually where you need to go to drive wealth into productive uses, however for that you need a system which is pro entrepreneurialism, and pro growth. you also need to simplify the tax system so that people believe in its efficacy, rather than assume everyone is doing what they can to dodge taxes.

the UK has pushed itself into a corner a fiscal social consciousness it cannot afford anymore.

 

[rpant_gabba]

I would like the people who believe taxing the poor to give us other ideas.

The obvious one being lowering taxes to stimulate the economy, but can't do that cos UK mustn't show up the wretched and failed EU state.

UK is doomed. Rich leaving the UK, middle class UK about to be ripped apart, and the poor, well they got nothing.

Wasn'r Brexit was supposed to be the panacea? you know make your own laws? what has EU got to do with UK tax rates?

 

[JaDed]

What UK and Norway did with their North Sea oil reserves will be a study featured in history books.
This will show that not all state owned enterprise is bad esp if social benefits are part of the deal.

 

[JaDed]

the UK public finances are cooked, the tax burden is getting to the point where the only answer is a parallel economy, civic buy in is at an all time low as gov services are creaking at the seams.

the public sector is dominated by operational expenditure whilst we have virtually zero capex in infrastructure, both physical and digital, and housing. uk unis are world leaders but we have zero productivity growth for nearly 20 years now. the social safety net is too broad, itll reach a point where its not viable for 30 million workers with virtually zero income growth over a decade to support nearly 2 million long term sick who have inflationary care needs.

the tax base is totally focussed on rinsing workers, whereas wealth taxes can be a touchy subject in a country where land and home ownership is such a core part of identity, but this is eventually where you need to go to drive wealth into productive uses, however for that you need a system which is pro entrepreneurialism, and pro growth. you also need to simplify the tax system so that people believe in its efficacy, rather than assume everyone is doing what they can to dodge taxes.

the UK has pushed itself into a corner a fiscal social consciousness it cannot afford anymore.

UK can try to do what US is doing lol, make the country buy less and tax everything coming in.

Pro entrepreneurship/growth system also can make the country reach similar situation..hence the whacko economics of US right now to pay the debt.

Europe overall has issues with entrepreneurship notable exception being Estonia.

 

[shortbread]

 

[Varun]

the UK public finances are cooked, the tax burden is getting to the point where the only answer is a parallel economy, civic buy in is at an all time low as gov services are creaking at the seams.

the public sector is dominated by operational expenditure whilst we have virtually zero capex in infrastructure, both physical and digital, and housing. uk unis are world leaders but we have zero productivity growth for nearly 20 years now. the social safety net is too broad, itll reach a point where its not viable for 30 million workers with virtually zero income growth over a decade to support nearly 2 million long term sick who have inflationary care needs.

the tax base is totally focussed on rinsing workers, whereas wealth taxes can be a touchy subject in a country where land and home ownership is such a core part of identity, but this is eventually where you need to go to drive wealth into productive uses, however for that you need a system which is pro entrepreneurialism, and pro growth. you also need to simplify the tax system so that people believe in its efficacy, rather than assume everyone is doing what they can to dodge taxes.

the UK has pushed itself into a corner a fiscal social consciousness it cannot afford anymore.

Wow, the UK and India are poles apart (first and third world respectively) but a lot of that rings true in India as well.

 

[ElRaja]

Wow, the UK and India are poles apart (first and third world respectively) but a lot of that rings true in India as well.

its not too surprising, the civic foundations of subcontinental administration and beaureacracy was laid by brits, who were all too keen to preserve the wealth and influence of the landed classes.

 

[sweep_shot]

Canada may face similar fate as UK very soon.

These countries are declining due to bad policies. They should learn from Japan, China etc. how to govern.

 

[Technics 1210]

Here's a verifiable fact - no currency without the backing of Gold/Silver has survived for over 100 years.

UK dropped the gold standard in the 30s.

USA dropped the gold standard in the 70s.

You all can do the maths.

So, if anyone believes, any present or future government/policies can fix the economy, improve our living standards, preserve our wealth - dream on.

And this for those who understands :

The cost of 30-year government gilts reached 5.58 per cent on Friday, surpassing the levels seen during the chaotic fallout from Liz Truss’s mini-budget.

Remember one thing - the powers to be and the respective systems want every human, institution, and government to be in debt, to beat the system, say no to debt!

We are in a dawn of a new fiscal era in the UK, one however seen before. When interest rates are forced low, in the back drop of high inflation, it means hyperinflation is around the corner.

Gold heading to the heavens.

 

[sweep_shot]

Here's a verifiable fact - no currency without the backing of Gold/Silver has survived for over 100 years.

UK dropped the gold standard in the 30s.

USA dropped the gold standard in the 70s.

You all can do the maths.

So, if anyone believes, any present or future government/policies can fix the economy, improve our living standards, preserve our wealth - dream on.

And this for those who understands :

The cost of 30-year government gilts reached 5.58 per cent on Friday, surpassing the levels seen during the chaotic fallout from Liz Truss’s mini-budget.

Remember one thing - the powers to be and the respective systems want every human, institution, and government to be in debt, to beat the system, say no to debt!

We are in a dawn of a new fiscal era in the UK, one however seen before. When interest rates are forced low, in the back drop of high inflation, it means hyperinflation is around the corner.

Gold heading to the heavens.

Interest-based system is always likely to collapse.

It is like a ponzi scheme.

 

[JaDed]

Canada may face similar fate as UK very soon.

These countries are declining due to bad policies. They should learn from Japan, China etc. how to govern.

Japan is one ethnicity and China is majority Han, not a comparison.

Canada should be miles ahead of UK considering the amount of natural resources it has, yes it’s facing a setback

Canada will make a comeback, I already see AI picking up , extremely good product companies are picking pace Kinaxis, Shopify .. only if nowgovernment allows Alberta to export oil gas now.. everything will be better for Canada.

 

[sweep_shot]

Japan is one ethnicity and China is majority Han, not a comparison.

Canada should be miles ahead of UK considering the amount of natural resources it has, yes it’s facing a setback

Canada will make a comeback, I already see AI picking up , extremely good product companies are picking pace Kinaxis, Shopify .. only if nowgovernment allows Alberta to export oil gas now.. everything will be better for Canada.

Yes. Canada has underachieved because it has such a huge landmass (2nd largest in the world; only behind Russia). Lots of resources.

Last 5-6 years, Canada did poorly in different metrics (just like UK).

Both UK and Canada are missing competent leaderships.

 

[JaDed]

Yes. Canada has underachieved because it has such a huge landmass (2nd largest in the world; only behind Russia). Lots of resources.

Last 5-6 years, Canada did poorly in different metrics (just like UK).

Both UK and Canada are missing competent leaderships.

UK doesn’t have much resources.. and double the population of Canada.

 

[Varun]

its not too surprising, the civic foundations of subcontinental administration and beaureacracy was laid by brits, who were all too keen to preserve the wealth and influence of the landed classes.

Good for them they moved on from the IAS class in their own country, while it hangs around our (India/Pakistan)'s necks like an albatross.

 

[aboveandbeyond]

Interest-based system is always likely to collapse.

It is like a ponzi scheme.

Correct. Goes in Circles. There's never ever going to be any benefit from it.