Is Rachel the worst Chancellor in history?

 As we approach the end of of 2024 it seems Rachel has trashed the economy.

She inherited a rather pathetic economic growth of 0.4% from the conservatives and inflation was 1.7% so in real terms we were getting poorer by 1.3% per year under the conservatives.  

Well Rachel has managed to wipe out the 0.4% growth (it's now 0% for the last quarter) and managed to raise inflation from 1.7% to 2.6% so we are now getting poorer 2.6% per year.

So in real terms she has wiped out £62.4 Billion. 

She has literally made every single person in the UK £918 worse off - and that's before the real pain and suffering comes into effect in April.

In cockney slang a Monkey is £500 and a Rachel is £20Billion.  She has wiped out  3x Rachels !!

So much for the mythical £20 Billion blackhole - she's not just imagined the Tory's blackhole but created 3x more....

The Resolution foundation calculated that the Liz Truss mini budget cost the economy £30 Bn whereas Rachel has cost us £62Bn.  Surely Rachel now deserves the title of the worst Chancellor in history.

How has she managed to achieve this feat?  Well she didn't do it alone - Starmer was there to help.

Between them they talked down the economy - "things are going to get worse before they get better" - (although there was no obvious reason why things would get worse - they weren't doing "austerity" - rather the opposite and splashing the cash).

Rachel was sitting there in Number 11 manifesting a trashed economy.  She took every opportunity to say how bad the economy was and unfortunately the population believed her.

Personally I don't think she will survive beyond April 2025 .  The question is what negative moron will replace her?

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Post article note since 23rd Dec 2024

Well things have clearly got worse in a relatively short period of time.

The bond markets have been in turmoil this week. Concerns over persistent (and rising) inflation and zero growth have caused the Government's cost of borrowing to spiral to the highest level since 1998.  Let's just stop for a second.  1998!!  That means it's worse than the financial crisis of 2008, worse than the dot.com crash of 2000, worse than Liz Truss's budget....

Rachel has clearly crashed the economy. 

Despite this financial chaos the government is still throwing money around.  The latest is the Chagos Island which Britain owns.  The Government are going to give Mauritius £9Bn to take them off us?  What?  Mauritius has never owned the Chagos Island and £9Bn is roughly half of the mythical Black Hole of £20Bn - so half a Rachel (a Rachel being £20Bn in Cockney slang). Well it seems part of the reason for this is that Mauritius is on the brink of bankruptcy - in which case be clear why we are giving them money and don't treat us as Stupid.

So back to the bond crisis.  Why does it matter?  Well we pay taxes. The Government Credit Card bill has got out of control by spending too much and the lender has decided to increase the interest rate because the UK is now a higher risk borrower. This means more cash flowing from the UK taxes to elsewhere - probably China. 

Rachel is now in China supposedly to encourage trade - I suspect she may be there discussing debt forgiveness in which case what bad deal is she signing us up to?  Will the UK now become another canton of China rather than the 51st state of the USA ?

UK government debt is now nearly £2.8 Trillion (bigger than the annual GDP). The interest rate has risen to 5.25% on 30 year gilts. The Debt Management Office report for today shows  there are £2,704Bn worth of debt and £1,400 Bn of 30 year gilts & 10 year gilts in isue. Borrowing costs have increased by 1% for both 10 year and 30 year gilts.

So the Government is now paying £14 Bn more in interest payments than when they took office.  The National Insurance tax raid on employers was supposed to raise £25Bn in taxes so the interest payments on this borrowing is eating into this supposed tax gain.

It is likely that a large chunk of this money is going to China.  China holds foreign debt in order of size: Japan, USA and UK.  The Chinese have been selling US debt (why hold US debt when the US view them as the enemy). 

The bond markets are betting against Labour in a big way and it looks likely to get worse.

I can't see a way out of this. Labour are too arrogant (or proud) to back track on their plans. They seem incapable of "reading the room".

I don't see strong leadership within Labour so they are likely to ignore this until it blows up into a full blown financial crisis.  While this is happening the pound will weaken against the dollar - making imports (we dont make anything or grow anything) more expensive so inflation will rise.  The Bank of England will be forced to raise interest rates to "control inflation".  The higher interest rates will cripple business so GDP and economic output will fall.  It will soon spiral out of control.

If Labour go to the IMF for a rescue loan then expect gilt interest rates  to explode as they will look incompetent ie it will get a lot worse before it gets better.

What really needs to happen is to sack a few million government employees (no-one will notice the difference in service or productivity), massively slash government spending eg Chagos Islands (or sell the Chagos Islands to the USA), and to back track on tax increases. 

The only glimmer of hope I can see is the Civil Service are going on strike as they are being asked to go into the office (or is that actually work).  The Government won't need to pay them when they are on strike  - hopefully they will be on a long strike and everyone will realise that they don't do anything and we can do without them.....