The UK economy has been underperforming in recent months, leading many experts to worry about the future of the island nation. The information in this article will take a look at some of the reasons behind the situation, and it will make some predictions for the future. There is no getting away from the fact that recent issues with the EU are playing a significant role in the decline. However, there is more to the underperformance than meets the eye according to some pundits. The pound has dropped in value below the Euro for the first time, and that doesn’t look good for UK politicians.
The stresses of Brexit
Brexit is one of the leading causes of instability in the whole of Europe at the current time. UK citizens votes to leave the EU in a referendum a few months ago. The political elite is still trying to work out how to navigate the minefield in front of them, and that’s resulting in decreased market confidence. According to specialists like Antonio Osorio from Lloyd’s Bank, the European Union will survive the situation. However, the UK might well come out of the negotiations with a raw deal. Once Theresa May makes some headway, there is a decent chance that the UK economy will begin to recover.
The cost of foreign wars
The UK government is currently involved in a LOT of expensive military activities overseas with the US. Indeed, the country spent no less than £41 billion on defense last year alone. At the moment, British troops are stationed in:
- Saudi Arabia
- South Korea
- And many African countries
If the government decides to reduce their armed presence around the world, the UK economy will recover much faster than it will at the moment.
The UK benefits system
Many Conservative politicians in the UK like Jeremy Hunt blame the benefits system for the state of the economy today. Those professionals claim that supporting out of work individuals costs the UK taxpayer hundreds of millions of pounds every year. On the flipside of that coin, some politicians believe the government spends too much cash trying to withdraw benefits from those in need. Regardless of which side of the fence people might sit, one thing is for certain; the benefits system in Britain required a complete overhaul. The groups that cost the government more than any other are:
- Large unemployed families
Each of the issues mentioned on this page has a role to play in the decline of the UK economy. Will politicians manage to come up with a solution in time for the system to recover? That’s almost guaranteed. The only confusion surrounds how long it’s going to take, and who will come up with the winning strategy. Prime Minister Theresa May looks set to step down during the current parliamentary term. That could mean future leaders like Jeremy Corbyn will have to deal with the matter. Let’s just hope anyone who finds themselves in the driving seat is already working hard to create a plan.