Nimrod103 wrote:vand wrote:IMO its largely a consequence of our national obsession with houses. When so much money gets poured into housing and everything is geared towards helping the real estate market there is not much left over for businesses.
The UK's housing stock is valued at 3.8 times its GDP, while the value of its public businesses is around 1 times. People would rather own unproductive houses rather than productive businesses in this country.
For the very good reason that housing a) has proven to be an excellent hedge against Govt debasing the Pound, b) in a country getting more crowded by the day,physical space is ever more at a premium & c) gains are arguably taxed at lower rates than income.
If the Govt maintained the value of the Pound, perhaps tieing it to the Swiss Franc or to Gold, people would not be so interested in investing in houses, but would chose suitable housing for their family size, location, convenience and all the other more relevant features.
Why would investors opt for the UK where its repeated governments have striven to boost nominal GDP - that is easily achieved via net immigration, but unlike the US where it doesn't also strive for GDP/capita expansion/improvement. The 'middle-class' wealth is a key driver/factor, and UK policy has been to hurt such, rather than improving standards of living. When potential investors see how the government repeatedly moves goal posts, raids pensions, ...etc. they naturally look elsewhere, such as the US, Singapore ...etc. I suspect that in having near maximised what the government can milk from savings/pensions/investments that its focus will move on to doing similar to housing such that the UK's relative decline will continue on down deeper yet.
Not grabbing some of exceptional gas price based energy firms profits to instead counter those with UK debt expansion is just another example of very poor UK governance. A great opportunity instead turned around to being a cost (lower priced UK gas sourcing UK customers/businesses is a great opportunity for the UK to become more competitive, when instead UK customers/businesses pay the same or more than others then as energy is a base/primary factor in costs so the UK will remain just as competitive if not even less competitive than others who did take some of energy firms excessive profits rather than borrowing to fund them).
China, US, EU ...etc plan for decades ahead, UK governments are only interested in up to 5 years periods, and are easily/often directed by businesses (such as energy firms) rather than the electorate. Nor does the UK learn from history, take the 1918 flu pandemic and 2020 Covid didn't have any plans prepared, just winged it. The next pandemic could be far far more devastating and I suspect the UK's response will again be to just wing it (such as hoping for herd immunity).
The Swiss Franc/Gold were pegged, until the new millennium, a reason why the Swiss Franc remained relatively strong. In effect one-and-same. The UK can't afford to peg the Pound to that without significant change in its present 650 kings/queens MP/Parliamentary system, and in the absence of such change will naturally see continued relative decline of the Pound (net deficit, borrowing to address issues rather than focusing upon core/root factors, servicing business greed over social/business balance).
