Strip away all the political nonsense, the decaying infrastructure, even Brexit, and the real issue to solve at the core of the UK’s multiple problems is the National Health Service. Solve that, reboot it and relaunch it, and everything else may fit back into place. Its worth a try.
Markets have been far more positive than expected in 2023 – thus far. There is still much uncertainty out there, but what is the market missing? I have two particular under-played threats to watch – corporate debt and social unrest.
The Thames Water debacle is shaping up to be a critical “Judder” moment for the UK. Public utility privatisations decades ago have left a legacy of underinvestment and broken services. The bills will be enormous – and crippling - creating a potential investment crisis.
Phillips Curve economics calls for higher unemployment to calm inflation. Great plan says The Bank and Chancellor while consigning millions of UK citizens to penury. We need something better than wrecking lives and the economy.
As we wait for The Bank of England to address the latest inflation miss – consider Pencil Complexity Theory, Cucumber Inflation Modelling and why Wimbledon will be Hell this year.
The widening gulf in the outlook for the US and UK economies is stark. UK housing and the mortgage markets are a rising threat – but maybe we are looking at the all the wrong things as the Climate Crisis (oh, yes, remember that) comes back into focus.
The City of London’s crown as the centre of global finance sits uneasy. Multiple issues face the City, but perhaps the biggest is mindset and bureaucracy. How can London regain the flair and excitement that once made the City the beating heart of the global economy.
The debt ceiling crisis has lifted a cloud from markets, but we’re still looking for resolution on inflation, geopolitics and a host of other issues. Maybe the real issues are about valuations – which remain over-extraordinary.
The immediate debt ceiling crisis has passed, but it’s not the end of the rolling uncertainty that characterises current markets. The pressures and tensions fuelling political division and driving maket uncertainty are set to increase rather than moderate.
Markets are focused on the immediate debt-ceiling crisis, and the short-term game of guessing rates vs inflation. Down the line are the bigger challenges of the medium and long-term: issues we need to be investing in now to garner long-run returns or just to survive!
