Britain’s in a Doom Loop, and Somebody Had Better Do Something…or Else

We’re Watching a Modern Society Become a Car Crash, and Its Leaders Are Asleep at the Wheel

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They’re astonishing, jaw-dropping, breathtaking. The headlines of British collapse. Here, try today’s: 

British children who grew up during the years of austerity are shorter than their peers in Bulgaria, Montenegro and Lithuania, a study has found…experts have said a poor national diet and cuts to the NHS are to blame. But they have also pointed out that height is a strong indicator of general living conditions, including illness and infection, stress, poverty and sleep quality.

“They have fallen by 30 places, which is pretty startling,” said Prof Tim Cole, an expert in child growth rates at the Great Ormond Street Institute of Child Health.

Whew. You know things are bad in a country when you can literally see the collapse etched into kids’ bones.

So how much worse are things going to get for beleaguered Britain? You see, when I look at headlines like the ones above, I’m…disturbed. But when the economist in me looks at the even bigger picture? I’m horrified. That’s not a word I use that often. And…I really mean it. When I peer into Britain’s future, I shudder. I gnash my teeth. I know what’s going to happen, just like I predicted all this — no, that doesn’t make me Nostradamus, just a…pretty good economist. You’re good at your job, I’m good at mine. So what happens to Britain next?

Let’s start with what happened today. They’re calling it an “inflation shock.” As in, everyone’s shocked that inflation didn’t fall…but kept on rising. Merrily soaring away, without a care in the world. That shouldn’t have come as a shock to anyone — and yet it did, to politicians, media, intellectuals, pundits. Why? This is exactly what every single good economist has warned was going to happen, from me to Danny Blanchflower to, LOL, the entire IMF, and so on.

Britain is now in a doom loop, and somebody had better do something.

I don’t say that lightly. I have to warn now in the most severe terms. Sometimes, I couch my warnings in black humour — let’s call those level I. Sometimes, I get philosophical — let’s call those level II. But level III? When I don’t mince words, and I just have to tell you exactly what’s happening, and will? Rare. And you should take it seriously. Like I said, I — we, economists, thinkers of the intelligent sort, not Brexit fanatics, Big Liars, fools — haven’t just “been right.” We’ve been proven to be dead on. So let me say it again, for emphasis, because I cannot warn more strongly than this, and what’s at stake now is serious socioeconomic ruin, of which now is just a small taste.

Britain’s in a doom loop, and somebody had better do something to stop it, or else. Or else what? Let me begin with the doom loop, and then you’ll understand naturally “what.”

Prices and interest rates are now rising in tandem. It’s true that inflation’s global, sure. But Britain’s case is obviously special — inflation’s higher, and it’s still soaring. Despite savage, brutal interest rate rises. What does this tell us? Inflation’s highest in precisely those categories which were…LOL…affected most by Brexit, like food and energy and the price of money itself, aka interest rates. In other words, the basics.

Why? Why is this happening? Well, by now, every single person in Britain should know. After all, we economists have been trying to explain for years. The better part of a decade. The time to plead ignorance and play dumb is over. The explanation is so simple that even a child can grasp it.

Britain is an island nation. It is a net importer of…everything, really, that’s basic. Food, energy, clothes, the chemicals used to treat water, the carbon dioxide that goes into pints of beer.

It used to happily import all that from Europe. But now it doesn’t. Trade has seen a shock of breathtaking magnitudes. “Between 1999 and 2007, the EU accounted for 50–55% of UK exports. By 2022, this figure had fallen to 42%.” Meanwhile, “in the fourth quarter of 2021, goods imports from the EU were down 18 per cent on 2019 levels.” That’s already calamitous, but the problem is that it’s just the beginning.