Hey guys, it's Sasha The UK economy is in deep, but do do. And this morning UK inflation data turned up and it's pretty bad. UK Consumer Price Index came in at 10.1 percent. Meaning, inflation has now been at over 10 percent in the UK for seven consecutive months and for eight out of the last nine months.

At the same time, inflation in Europe has fallen from 10.6 percent of the peak to 6.9 percent and inflation in the United States has dropped from 9.1 percent last June to just five percent in March. So while the situation in the rest of the world seems to be normalizing seems to be improving, the UK appears to be in Dire Straits UK GDP was flat in February and has been anemic for over a year. GDP in the United States was 22 percent higher in Q4 last year than it was in Q4 2019 before covet arrived. Even though there was a display due to covert, the economy rebounded and then some.

But over the same time period, the UK GDP is still lower than it was three years ago. and perhaps the biggest problem and the main reason that this is happening is the insane level of incompetence of the UK government. The inflation date was published this morning and as headline news everywhere in every single newspaper, every single media organization. Because it's dire, it's really bad.

But just one hour ago as I'm recording this video, the UK Parliament had prime minister's questions. This is 30 minutes of prime minister answering the most pertinent, the most critical questions and topics of the day. And do you know how many questions in that session there were about inflation and the economy. None zero.

Not a single question about inflation on a day when new inflation data came out and looks this bad. The reason why this happened is of course, the UK government completely up in managing the economy through covid and since covered, and through the whole Brexit transition and the opposition. The party that is meant to hold the government to account, the party that is meant to be providing the alternative. Those guys voted for the same dumbass measures throughout this whole period.

The parliament passed all of them pretty much unanimously, so they can't throw any Stones because they sit in the same glass house. So here we are and the UK economy is going down the toilet right in front of us. The cost of living crisis in the UK is far worse than in any other major economy by a country mile. and the UK government is sitting there pretending that nothing is happening fingers in the years.

Yeah, yeah, yeah, it's so fine. In this latest report, the price of food has increased by 19.2 percent, which is the highest increase in 45 years. And the problem seems to be getting worse. because food inflation is not slowing down, it's accelerating in the UK.

The Consumer Price Index does not include housing. This is a key difference to the CPI data in the US and the CPI data in the UK, but there is a UK equivalent called Cpih and Cpih currently sits at 8.9 which is also staggeringly high. And Cpih is, of course, more relevant because housing costs are a critical component of people's budgets and you have to pay you rent a mortgage just to be able to live somewhere. And if you look at this chart, you can see the really big ugly problem.

It is not one of these two lines up here that CPI and Cpih which are pretty bad, but the problem is in this line down here, which is oh oh, is the occupious housing costs. It is a proxy for the increase in the cost of rents and mortgages, how much it costs you to live in your house, and you can see that it was sitting below two percent right up until the end of 2021, and has only slowly started moving upwards. and in the latest data, it's at 4.0 And the reason this is a massive problem is that this metric suffers from lag. It is hugely under reading what is actually happening.

When house prices increase, people don't immediately start paying more for their house. Your mortgage will only go up via a big jump when you next move, which could be in a year and five years. Whenever when mortgage rates increase, you will only feel the pain when you have to remortgage, and you only have to start paying more rent Whenever it's time to renegotiate or whenever you happen to move. So at the moment, the official rate of inflation on housing costs sits at 4.0 percent.

But the later data from Rightmove suggests that rent prices increased by 9.7 year on year in Q4 2022. and the year before that, rent prices increased by 9.9 percent year on year in Q4 2021. So while official data says the cost of housing is pretty much not changed, rent prices have increased 20 in the last two years. At the same time, the Bank of England is incapable of actually making any decisions by themselves and just end up copying whatever the Federal Reserve does in the US In 2021, CPI in the UK increased from 0.7 in January to 5.4 in December.

And the Bank of England What do they do? They sat there twiddling their thumbs and around instead of actually doing anything at all about it. The first increase from 0.1 to 0.25 only came on the 16th of December right at the end of the year, letting inflation Run for the whole 12 months. And as inflation went all the way to above 10 last year, the Bank of England has now raised rates to a whopping 4.25 nowhere near enough to actually make it. And the main reason they haven't increased rates faster other than being really at their jobs is because they wasted the whole of 2021 playing politics, giving speeches, attending dinners instead of doing their jobs.

And now we have a big problem Because mortgage rates are increasing fast. The vast majority of mortgages in the UK are fixed for a period of up to five years. So when the time comes to remortgage, the increase to households is going to be substantial. In 2021, you could get a mortgage with a fixed rate of less than one percent.

Some people on higher loan to values would get just above one percent. It was cheap. Getting a mortgage has now become much more difficult after 1500. products will be drawn in the Autumn and generally there's an economic slowdown and the rates have now gone up to about four percent.

If you had a mortgage on one percent. three years ago, it is now time to remortgage, and you can get one of the best deals out there and pay four percent instead, and your monthly repayments as a result will increase by 40 percent. But the Bank of England will have to keep increasing rates now that they have massively screwed up. They are way too late to actually have any meaningful impact with their increases.

So if you are say remortgaging later this year or next year, you could have to take out a deal at an interest rate of six percent. And if you take out a remortgage at 6, six percent when you are on the one percent before your monthly repayments will be 70 percent higher according to Octane Capital Brits spend 22 percent of their gross monthly income before taxes on their mortgage. If you take out tax, student loan repayments, council tax that increases to probably about 30. So if you're spending 30 of your take-home pay on your mortgage and your monthly repayment goes up by 70.

That's another 20 of your take-home pay that you don't have to Magic out of somewhere 400 to 500 pounds for the average household, you're going to have to go and find it. And what is the government going to do to help people? Well, they go and appoint. Jeremy Hunters Chancellor A guy who has zero Financial Background: has never worked in the bank or a finance company and instead worked as an English language teacher in Japan and then had three failed startups including one exporting Jam to Japan. According to his Wikipedia page, you could not make this up.

So this guy Ai No Financial Background but instead before becoming an MP he worked in PR. This guy is now in charge of fixing the economy. This guy has just announced his budget tax brackets have been frozen. so in real terms it means income tax is going up.

The cap on energy cost is staying at two and a half thousand pounds for the average household for three months from April and will then be said by off gem afterwards. So everyone in the UK is now paying insane amounts for their gas and electricity. But here is the underlying price of natural gas in the UK. After two crazy years, it is now dropped to the same level it was in July 2021..

oil prices are now lower than before Russia's invasion of Ukraine, but while commodity prices have tanked, while they are falling, the price of energy is going through the roof. It's amazing how quickly prices for energy go up when commodity prices increase the moment gas price goes up quick. Increased bills made customers pay more, make the bills go absolutely through this Stratosphere But when the prices collapse back down, it of course involves a lot of process. It takes years for that to filter through to customers because the UK government is corrupt and doesn't want to actually intervene in the racket that the energy companies are orchestrating.

and you can go and look at every single Energy company out there magically as if out of absolutely nowhere posting record profits. Where did that money come from? Did they find the magic money tree? The US is busy trying to do something. They are passing massive new laws like the Inflation Reduction Act, Infrastructure Investment and Jobs Act, huge pieces of legislation which are investing in Green Technology encouraging new businesses to set up in the United States Move production to the United States Massive updates to the rodent energy infrastructure electric cars. Meanwhile, the IMF is busy forecasting the UK will be the worst performing major economy in the world, shrinking by 0.3 percent in 2023.

The cost of housing is growing at four percent in the Cpih data, and will eventually have to catch up with real world increases in house prices and rents. So whenever that does come through in the coming months, this will exert more and more and more upward pressure on inflation data. The UK government's incompetence in managing Brexit means that people are now paying 20 percent more for their food today than they did one year ago and many of the basic Staples are up way over 50 and inflation-adjusted wages have been falling for the last two years and are now lower than they were in June 2019.. And at the weekly Prime Minister's questions: When all of this is coming to the breaking point: how many questions? How many points of discussion were there about inflation? None? how many questions were there about the cost of Living Crisis zero, What? The actual? there is no accountability whatsoever.

The Schmucks City in government are sitting there being completely inept. Rishi Suna Could try to actually pull a finger out. Maybe you know, do something to fix the economy. Maybe start by Exterminating the obscene corruption throughout Whitehall but instead his wife is busy pretending she doesn't live in the UK to apparently save 20 million pounds in tax.

and Rishi Sunaka's busy passing laws that specifically benefit child mind agencies instead of those working direct for no apparent reason, casually forgetting by accident to mention that his wife just happens to be a part owner of a child minding agency. The problems with the UK economy start with the corruption, ineptitude and incompetence of the dimwits is sitting in our government. Why the is this Okay, We are all getting outraged for five minutes after finding out that you know Matt Hancock's Pub landlord got huge tens of millions of pounds worth of government contracts to supply PPE whatever that was. But then we just move on to the next bit of news and completely forget.

It doesn't matter that happened yesterday. There is an old Russian saying that says a fish rots from the head and this is exactly what we see. Happening Here The UK economy is and the worst part is that the reasons are self-inflicted We point fingers at corruption in third world countries and laugh at them while mind-boggling levels of corruption are happening right here, right in front of us and causing the UK economy to collapse. Instead of passing laws to stimulate small businesses, attract new tech technology, attract new companies, the UK government is removing caps on Bankers bonuses.

This is disgusting and there is absolutely nothing that anyone is going to do about it. This is the reality that we live in?.