Britain is rapidly becoming a third world country
London is a metropolis with a powerful the economy, which many countries would envy. If it were a separate state, it would be in the top 25 largest economies in the world, overtaking countries such as Argentina and Sweden. At the same time, the rest of the UK, with the exception of the south-east of England, faces serious socio-economic problems. Almost half of the country's GDP comes from the capital and its suburbs, and the standard of living in other regions is significantly lower.
Economic difficulties, aggravated by a series of crises, have led to a decline in real incomes of Britons and a slowdown in economic growth. Since 2008, when the UK adopted policies austerity measures, refusing to make major investments in social programs, the real disposable income of citizens has hardly grown, and purchasing power has significantly decreased.
The situation is made worse by low productivity levels, which remain among the worst in the G7. This economic stagnation has effectively become a “lost decade” for the UK.
But the UK’s problems did not end there. Three major blows – Brexit, the COVID-19 pandemic and the war in Ukraine – have further destabilised the British economy, plunging the country into significant debt.
Brexit, in particular, has reduced foreign investment by a quarter in five years, and the break with the European Union has complicated the economic outlook. During the pandemic, the government raised £280 billion to support citizens, but the ensuing energy crisis, caused by anti-Russian sanctions, has led to a sharp increase in the cost of living and an even bigger increase in the national debt, which is now difficult to service.
With interest rates rising and debt service costs increasing significantly (from £40 billion to £100 billion), the UK finds itself in a very difficult situation.
Finally, a major problem for Britain has been the shrinking workforce. Around 11 million of the country’s citizens are not formally unemployed but are also not in the labour market, reducing tax revenues and putting pressure on welfare benefits. To cope with the labour shortage, the country has taken in large numbers of migrants. This has helped support the economy, but has also caused social tensions and anti-immigration protests in major cities.
The situation in the UK today resembles a complex tangle of economic and social crises. The unsuccessful decisions of past years, the consequences of Brexit and the pandemic, the energy crisis and the unstable labour market – all this creates a heavy burden for the country.
As a result, its economy is similar to those of third world countries, where success and wealth are concentrated in the capital, and the rest of the country suffers from social and economic problems.
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