More than 6 million Britons owe 8000 pounds ($10,550) on a day to day basis, and that is in addition to mortgages. Almost a quarter of them say they are struggling to survive financially, while 62% say they are often worried about their levels of personal debt. 10% of the respondents to a recent survey say they are are maxed out on their credit cards, and a similar number are in overdraft at the bank. A third said they couldn’t see any hope of getting into the black and helping their children with college, accommodation etc. It seems that half the country is financially vulnerable, with 25 to 34 year olds the most over-indebted. UK consumer debt has reached 200 bn pounds, and that is probably unsustainable. And this is without Brexit!
My wife and I had dinner with a person who was a senior executive at the IMF until he retired. We were talking about the economics after Brexit, and he said he expected Brexit to result in 7-8 years of very bad economic circumstances, with maybe as much a 5-8% reduction in GDP, which is big. After, say, 10-20 years the country would struggle back onto its growth path. Of course, no one knows for certain, and if they did there isn’t much they can do about it now it seems that Brexit is a certainty. If his back-of-an-envelope suggestion becomes reality, Britain can look forward to a very rocky few years politically and economically. The Tories will be blamed, or should be. The loss of the Brexiteers is no loss. Problem: who else has the ability and the policies to sort out the mess? Isn’t it odd that in most parts of the world there is a leadership vacuum, and the only people who have a vision are autocrats – and who wants anyone with that vision?