Hey guys, it's Sasha. If you haven't yet heard, the UK economy is completely and perhaps the most spectacular thing about how badly screwed the UK economy is is that the entire collapse was entirely self-inflicted The UK government is committing Financial suicide and it is getting really bad really quickly. and I am here to tell you exactly how bad it is. And in case you're wondering, it is really bad. The whole problem really started two years ago, because back then the UK went absolutely bananas when Covert turned up. Now nobody really knew what to do about Covet at the time, But the UK panicked way harder than pretty much any other country and the UK government decided to spend as much money as possible while imposing some of the most Draconian restrictions. And to fund this spending, the UK printed money. They printed a ton of money before the pandemic started. The UK M1 money supply sat at 1.8 trillion, and in the two and a bit years since Covert arrived, that number has increased by 50 percent. 50 percent is now a 2.6 trillion pounds. Just the official estimates alone put the UK government spending on Covert at around 400 billion pounds. Although if you look at the money supply chart, it kind of looks like the real cost was more like double. And of course, at the time, if you dared criticize the approach of lockdowns and the self-destruction of the economy, the destruction of small businesses, then you were immediately branded a covidiot. If you dared question whether the UK government should be spending ungodly amounts Of money with zero accountability on whatever the it is that they wanted without the need to go through any proper due diligence or processes. You were a conspiracy theorist. And so we had the mate of the health Secretary who ran a local pub when a 40 million pound PPE contract. This is the sort of corruption that we point at happening in other countries like Russia or in Africa. But this happened right here in the UK. This level of corruption and vile abuse in the UK government during Covid is insane and now now we are having to pay for it and it's going to be very expensive. Yesterday the UK announced a new budget and in the UK a new budget is something that's meant to be announced once a year, but at the moment, the deranged children that former government tend to do these roughly every four weeks. And along with this budget, we get a set of forecasts by this thing called the Office of Budget Responsibility. The funniest thing is that the Office of Budget Responsibility has absolutely no responsibility for the budget. They just get to tell you how bad things are going together as a result of it. The guy who does have responsibility for the budget is this latest Chancellor. We do get a new one every season, and this latest guy quite appropriately has exactly zero Financial background whatsoever before becoming an MP Jeremy, Hunter called English and Japan then came back to the UK and tried to sell marmalade to Japan. That startup apparently failed for some really weird reason and then he created a company called Hot Courses that sells educational courses. but fear not, not having any experience was so ever in finance or anything related to finance is of course no reason for someone to not go and manage the finances of an entire country. So the Office of Budget Responsibility yesterday announced that their forecast is that the UK is going to get completely next year with the economy diving 1.4 percent. and in case you might incorrectly think that the Obr is completely incompetent and have absolutely no idea what they are doing, they publish this nice chart here that shows you the most recent forecast compared to March 2022 and you can see that this latest forecast in November 2022, other than saying that it's going to get way worse. Also, expect the UK economy in the middle of 2020 to do much worse than the last forecast in March 2022. So from March 2022 to November 2022, they have adjusted their forecast for early to mid 2020 and the latest take is that the UK economy is going to get absolutely smashed next year as well and we will maybe get back to the level where the economy was back in 2019 in 2024. If we're lucky, and in case you're wondering, this makes the UK by far the worst financially performing country in Europe and worse than pretty much every other single country in the world. The UK is the only G7 economy that hasn't recovered to pre-pandemic levels, and others like the United States have gone a lot higher than that level in the same time period. Talking of the United States in the budget announced yesterday, the Chancellor said that the UK will become the world's next Silicon Valley I you not? He literally said that while the US is doing pretty well well and the UK economy is getting trashed, and you know how he plans to attract new startups and new businesses to come to the UK well, you won't believe it. He is increasing taxes. First, the UK is increasing corporation tax from 19 that it is right now to 25. This change comes in April in about five months time and there is nothing that businesses love more than a giant off increase in tax that is definitely going to drive businesses to quit California Hop on and explain to stoke on Trent and set up there. no doubts about it whatsoever. Then, the UK dividend allowance that was already slashed recently has now been reduced from two thousand to one thousand pounds next year and then down to 500 pounds in 2024. So basically going pretty much to zero and this means that if you go and leave your job and go and take a massive off risk, starting a new business with an overwhelming likelihood of failing and losing all of your money if you go through years of building their business, not earning any money in in the process. If if your business then succeeds, then under this new tax regime, it will cost you more in tax to pay dividends from that business than if you never bothered and just took a salary. This budget quite literally disentivizes anyone from starting a new business in the UK or from moving their business to the UK. It is the exact opposite of attracting new Talent. Exactly, nobody is going to go and set up new startups in the UK because the UK government is going to tax you Trina knows if you try income tax brackets are frozen. The 45 tax bracket has moved down from 150 000 pounds to 125 000 pounds. The tax-free amount is also Frozen until 2028. That's in six years time and at the moment, inflation in the UK is at 11.1 percent. It went up one percent from September and the latest data shows that the UK wages are only growing at about six percent a year. So together with the freeze and income tax rate days, we're actually getting something more like a 10 tax increase. But at the same time, there is absolutely no real attempt to reign in the spending. Benefits and pensions are increasing by 10.1 percent because inflation is high and I do get it. People on benefits and pensioners are struggling. Energy bills are going up by 10 quadrillion percent to three thousand pounds a year for the average household. But it does seem somewhat peculiar to be increasing taxes dramatically in real terms of anyone who actually goes to work so that anyone earning money for a living will get screwed as a result. But at the same time, welfare spending is increasing by the rate of inflation. The problem with this approach is that it creates a spiral. UK Government borrowing is already out of control. UK Inflation is out of control. Food is going up at an average rate of 16.4 percent year on year. This is complete capitulation. The UK economy is now in a recession that will last at least through the next year. According to the Gov government, the real disposable income in the UK has fallen at the fastest rate since records began and next year will fall by the second highest rate since records began. Second to this year, the value of the pound has collapsed because confidence in the UK economy and the ability of the UK government to actually do anything is gone. If you are planning to start up a new business, you are definitely not going to do it in the UK because the UK's new tax regime penalizes anyone who takes the risk of starting a new business and any existing businesses operating within the UK are going to have a look at their operations and decide if they want to pay 30 percent more tax. or maybe if they could prefer to go and move somewhere else. And now that the UK is not part of Europe because of Brexit, one or two of these businesses might just go and have a think and decide that maybe enough is enough is going to happen. The tax burden in the UK has now increased to 37.1 percent of GDP, which is the highest level since World War II This is a disaster and you know what you can't do about it because the current government that literally nobody elected can stay in power until January 2025. The current prime minister happens to be the same dweeb who destroyed the UK economy in the first place during covert while he was Chancellor and now because of the magic of how UK Politics Works After completely screwing up the UK finances through creating hysteria and panic two years ago, this guy gets promoted to be prime minister. You know, after telling everyone to follow the science and stay at home, ruining people's lives, people's livelihoods, collapsing small business owners while attending Garden wine parties next door. Now, apparently we all have to tighten our belts to pay the highest taxes in the last 80 years to pay for the gross mismanagement of the economy by these same exact people. Two years ago, Kovid didn't cause the UK economy to collapse any more than did the economies of every other country in Europe Putin did not cause the UK financial crisis. No, the reason we're in this is because of gross incompetence and shambolic policy making. But for whatever reason, nobody seems to want to hold these people to account. and the result is the complete destruction of the UK economy that we are witnessing, A destruction that is only likely to get worse. It doesn't matter whether you prefer conservatives or labor, it doesn't matter what your political preferences are. This is not about Party politics or about taking sides. It's not a game we are watching on as the UK government has become a laughing stock on the world's political Arena. We have a broken political system that provides no accountability where people who have no relevant qualifications whatsoever are appointed to extremely critical government roles in the middle of the worst financial crisis we have ever seen. and apparently all we can do is watch this show play out.