Hi guys, it's Sasha And as per usual, I'm really angry. For some reason the UK economy is in big trouble and I want to show you exactly how bad that is I have Team double Damien to break down what happened with the UK economy and more importantly, why it happened. We're going to take no prisoners and telling you exactly how bad things are because you need to know. Inflation in the UK is through the roof.

People's mortgage payments are doubling, energy companies are profiteering, Brexit is destroying entire chunks of the economy, and the UK government is showing world-class levels of incompetence and pretending that nothing is happening. I Was actually just at the the beer Festival yesterday talking to lots of landlords breweries. Many of them were telling me that actually business is good. we're going to explain exactly where the UK went wrong and if your name is Jeremy Hunt or Rishi Sunak I suggest you get out of pen and paper so that you can take notes because we understand how hard it must be to be an incompetent minister in the UK government having absolutely no idea what it is that you're doing.

so we made a video full of solutions over on Damien's Channel Damien talks money. So after watching this Jeremy and Rishi make sure you head on over and watch that other video so that maybe you can actually start doing your actual job and fixing the economy that you broke in the first place. The biggest problem with the economy is that families in the UK can't afford to pay for food, energy, or even a roof over their heads. Food inflation is at 17.3 percent in June's data and 12 months ago in June 2022, food inflation was already at 9.8 percent.

That means that over the last two years, food on average has increased by 29, but 29 is just an average. The Staples have absolutely exploded in price. Flour is up 40, eggs 43, milk 54, and sugar is up 61. So unfortunately, making a cake requires you to take out two loans and remortgage your house at the same time.

Energy Prices have exploded the biggest ever price Rises to household energy bills started in April last year just one month after Russia Invaded Ukraine Because you see commodity prices went up right, gas prices showed up, oil prices went berserk, and the entire energy sector thought, why don't we profit here and Jack the prices up because why let a good crisis go to waste So the UK government obliged The Regulators increased the caps and the prices went up immediately. and now every Energy company is posting record-breaking profits just after the prices went up. I Know I know who could possibly have seen this one coming. But then eight months ago, commodity prices collapsed.

Gas prices are back in the normal range that they have been in before last year. and remember, the prices jumped up immediately after gas price went up. Well, eight months after the gas price came back down. Did the price for retail customers go back down.

Did it? A big part of the problem with the UK economy is that the UK government gives approximately 0 point all about the people. The people in our government are not there for the people. Parliament is filled with people who have no clue how normal people actually live. They got second jobs, third jobs, investments in companies that they regulate through laws that they make up.

They have friends who just happen to hold senior positions in the city. And we saw during the pandemic how the UK government dished out tens of millions of pounds to their Pub landlords and themselves basically stealing public money during a crisis. And did we see lynchings? Did we see public hangings in the street for people in power literally stealing public money? No, we did not. We saw a little bit of outrage on Twitter and in the Daily Mail comments.

but all the same people are still in power and absolutely nothing has changed. UK mortgages are blowing up Because the Bank of England and the UK government completely missed inflation in 2021. They were way too late to act. and when they finally did act, the initial rate increases were painfully slow.

So now we're in this situation which was all too easy to predict. Really where rates are going up way higher than they should have done and people's monthly payments on their mortgage is a Dublin when the fixed rate runs out last month, house prices dropped at the fastest rates, the financial crash in 2009 and at the same time mortgage approvals went up. The two things happening at the same time suggests there's been a mad rush of people signing up to fix rate deals before mortgage rates go even higher. The data is showing you that people are panicking and locking in mortgage payments double the previous size before it becomes triple.

And the government's solution let people pay interest only for six months. Remember, if you want to see actual Solutions check out the second video that we made that's on my channel. We'll give some very handy examples. The Bank of England has recently said that the reason inflation turned up in the first place is because people are too greedy and ask for big pay Rises And the thing is, now that inflation is here, the inflation wage spiral is an actual thing and in the UK it is becoming a problem.

If you look at the blue lines on this chart, you can see the wages are now increasing at the fastest rate in decades and the rate of the increases is itself increasing. This is a really big problem because this effect will make stopping inflation significant canly more difficult. The United States managed to miss this effect and inflation collapsed down before wages started accelerating. But Rising Wages in the UK are not the cause of inflation.

they are a symptom a patient doesn't get lung cancer from coughing up blood. It was a smoking and the pollution that caused the cancer that caused the blood. And in the case of the UK, we've had the Infinite Money printer Go Bird during Covid. We've had seven years of trying and then miserably failing to implement brexit instead of doing a deal that actually benefits both sides and the people that live in both countries you know, trying to figure out a Switzerland style or a Norway style or whatever style of a mutually beneficial way of trading with the EU, The UK politicians decided to do a dick measuring contest and play tough which now means trade with the U.S Cumbersome.

We are outside the vat Zone and that means 20 extra cost and 200 extra paperwork. and instead of trading with France 20 21 miles away across the channel, we are busy signing trade treaties with Australia on the other side of the planet. Whether you were for Brexit or against Brexit, there is no denying that the government's incompetence has completely the whole thing up and we're now quite literally paying the price. The problem for the UK economy, though started long before Brexit back in the 70s, 80s, and the 90s.

The biggest companies in the world were all oil and energy companies, tobacco companies, utility companies, and banks. In the US, there was Exxon Mobil in the UK, we had BP The US had JPMorgan Chase in the UK we had HSBC the US General Electric in the UK we have BT Fast forward 30 or 40 years. the US economy has flourished. The US government has actively encouraged businesses to come and set up in their country.

Tax breaks were given to venture capital special Visa categories were introduced for high-skilled immigrants to move permanently to. the US companies were actively encouraged to set up in Silicon Valley The biggest company he's in the US today are Google Facebook, Microsoft, Apple, and Amazon and the biggest companies in the UK Well, it's still oil, energy companies, tobacco companies and Banks Seven of the 10 biggest companies in the USA are internet tech companies growing and collecting revenues from all over the world. and the number in the UK is zero. In fact, zero out of the top 100 biggest companies in the UK are internet Tech Giants The closest thing we've got is Ocado where you can order your food online and Rightmove the house buying website.

but this is Tech from 20 years ago and that's it. This is the sum total of the UK's high-tech industry. I Mean there's armed the chip company that's likely going public soon? Maybe. but that's about it.

So what does the UK government doing about it? Well, we've just made it a lot harder for any European talent to come and settle in the UK. So tech companies are setting up an Estonian a Czech Republic instead of the UK. Because those places are in the EU and have pro-business laws, the UK government tax rate has just increased from 19 to 25 if you want to invest in a small business, If you want to go and start up your own thing, the capital gains allowance that used to be 12 300 pounds is now six thousand pounds and next year it's going down to three thousand pounds. Big business get an exemption on the annual investment allowance, which means that they can expense a hundred percent of the capital investment in the year when the money is spent.

But small businesses like me see their business rates go through the roof mine for example, for this particular Studio where we're filming in the middle of nowhere, the business rates went up 21 from last year. If you set up a startup in the UK, all of your costs from Europe now have 20 vat that you cannot deduct because we're not in the EU anymore. Your customers in Europe also have to pay 20 more V80 and they can't deduct it either. In the US states compete with each other to attract new businesses with tax breaks.

in the UK new companies are beaten on the head and gets tax increases is instead. So who exactly is going to pull the UK economy out the toilet and push it forward for the next 20 years? Maybe it's British American Tobacco the company of the future. You know, the guys who sell cigarettes that are dying industry? Is it BP or Shell? You know, the guys who sell oil. Yeah, another diet in industry.

Or maybe it's Centrica. and the National Grid Those guys profit here enough high gas prices. There are many different reasons why the UK economy is: the UK spent the last 20 years debating Hs2 a new high-speed Railway between London Manchester and Leeds that will cost somewhere around 100 billion or whatever it will be after inflation, and the UK GDP is down 0.4 percent in the last year. At the same time, the US economy grew about 1.6 trillion in the last 12 months, up over six percent in the same time period.

We have a real problem here and it's not getting any better.