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What's wrong with the UK?

 In short nothing!

The United Kingdom is suffering from the first real impact of Brexit.    As they say, the chickens are coming home to roost, and there's nothing to be done.   Europe had surplus production in almost everything, so they are looking at imposing trade barriers against the UK similar to what they impose on other countries, they are saving jobs at home, and the cost of these jobs is a slowing British economy, with fewer revenues and a bigger deficit. 

In addition, most of the financial benefits of Europe (e.g., to farmers) were not replaced.  That's something I observed firsthand, we would get offers of European money, which in most cases were rejected, (one big exception was a grant for nearly 20% of the cost of our biodigesters).  

The country will be poorer and will be poorer for several years, unfortunately, Europe will soon join us in this poverty, the impact of demographic decline.   Italy and Germany are the problem children right now, but Greece, Portugal and Spain are right around the corner.  

The country is lucky for one reason, the Bank of England and the Treasury for nearly 40 years were excessively cautious in their large borrowing, and using long-dated instruments with the vast majority priced in sterling.

The truth is that for the first time in a very long time the economic system is facing the negative impact of an aging population, less demand higher interest rates, all driven by the same cause.   The average population is older, and the post-WWII generation is now entirely retired, and therefore consuming its savings.

There is no economic theory that deals with the current economic condition.   The United Kingdom is isolated from Europe, out of the game in America and short of friends.  Granted with the current US administration's actions it's hard to see how anyone could be friends with them...


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