Overton Door
446 posts
I asked @grok to watch as I couldn't be arsed
TLDR: he is NOT a Green supporter yet and wants to work with Labour
However, "an extreme wealth tax" is still his grand idea to win back voters for Labour🤣🤣🤣🤣🤣🤣
Gary Stevenson@garyseconomics
UK politics has broken a 200 year trend. Here's what happens next
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This really blew up this morning. Most of the conversation was about energy, food, and mortgages. However, I didn’t really cover the thing that ties it all together.
Public finances.
Before the war, UK 10-year gilt yields were at 4.3%. At their peak they hit 5.1%. Highest since 2008. Over 80 basis points added to government borrowing costs in weeks. Germany rose 42. The US 48. France 64. We took the worst hit. And we already had the highest borrowing costs in the G7 before a single missile was fired. Gilt yields have since come down slightly to about 4.83%. Let’s hope they continue trending down.
The OBR forecast the UK would spend £109.7 billion on debt interest this year. That was before the war. Higher yields add billions more.
Bloomberg estimated that by mid-March, £3 billion of the Chancellor’s fiscal headroom had been wiped out. Pantheon Macroeconomics says if yields remain elevated, the hit rises to £7.1 billion. Reeves started with £23.6 billion. Up to a third of it could be gone.
That’s just borrowing costs. Now look at spending.
Higher inflation means higher welfare costs. Benefits are uprated every April in line with inflation. The triple lock ratchets pensions higher every year. This year’s uprating alone added £11 billion in extra spending. The triple lock already costs £12 billion a year more than if pensions had simply tracked earnings. The OBR projects that hits £15.5 billion by 2030.
If inflation runs at 4-5% this year, that feeds directly into next April’s benefit calculation. Higher spending commitments, locked in, with no way to fund them without raising taxes, cutting elsewhere, or borrowing more at crisis-level yields.
And revenues are going the wrong way. The OECD has slashed growth to 0.7%. Construction starts fell 17% in Q1. Businesses aren’t expanding. They’re pulling back. Less growth means less tax coming in.
Borrowing costs up. Debt servicing up. Welfare spending up. Pension costs up. Tax receipts down. Growth down. February borrowing came in at £14.3 billion. Nearly double the OBR forecast.
The entire fiscal model is built on three assumptions: moderate inflation, steady growth, manageable borrowing costs. All three have broken at the same time.
The Iran war didn’t create this. The debt was already nearly £2.9 trillion. Unfunded pension liabilities already £2.6 trillion. Headroom already thin. Growth already weak. Tax burden already at its highest in decades. The war just removed the last cushion.
I have a lot of empathy for the people who’ll bear the brunt. The families who were just about managing. The pensioners watching prices climb again. The small business owners who’ve survived six years of crisis after crisis. They didn’t cause any of this.
And I haven’t heard anyone in Westminster be honest about what’s coming. Because the numbers don’t work. And they didn’t work before the war started.
This is what I mean when I talk about compounding crises… after years of crisis, all of these problems start to feed into each other and compound, and I’m worried we’re nearing breaking point.
Josh Hunt@iAmJoshHunt
I want to talk about the scale of what’s coming for the UK over the next three months. Because I don’t think many people have joined the dots yet. The Strait of Hormuz has been effectively closed for over five weeks. Before this war, 135 ships passed through it every day. Now it’s 5 to 7. Over 600 vessels are still stranded. Iran has mined the strait, is charging tolls, and controlling who passes. The CEO of Abu Dhabi’s national oil company said it this week: “The Strait of Hormuz is not open. Access is being restricted, conditioned and controlled. That is coercion.” Two thirds of Gulf crude has no alternative route. 14 million barrels a day behind a 21-mile chokepoint. Energy bills are forecast to jump 20% in July. From £1,641 to nearly £2,000. The second major energy shock in four years. Petrol up over 15%. Diesel up nearly 30%. Wholesale gas rose 75% in under four weeks. Food inflation could hit 8% by June and 9% by December. Academics advising DEFRA say it could reach 12%. UK food prices are already 38% higher than before Covid. We’re only 62% self-sufficient in food. We import 60% of our nitrogen fertiliser. Red diesel for farming has surged 60%. Average arable farm income has fallen to £17,000, the lowest in over 20 years. Yesterday, China announced it’s halting all sulphuric acid exports from May. Sulphuric acid is essential for phosphate fertilisers, copper mining, oil refining, and battery manufacturing. A third of the world’s sulphur was already blocked by the Hormuz closure. Now the world’s largest exporter has pulled the other lever at the same time. The fertiliser crisis just got significantly worse, heading straight into planting season. Before the war, markets expected rate cuts. Now they’ve priced in two rate rises. Over 1,500 mortgage products have been pulled. Two year fixes have jumped from 4.8% to 5.5%. Nearly £1,000 a year extra on a £200k mortgage. Gone in weeks. Flights are next. A quarter of UK jet fuel comes from Kuwait, behind the strait. In early April, major carriers said they had five to six weeks of reserves. That clock is running. Ryanair’s CEO has warned 5-10% of summer flights could be cancelled. Iran’s strike on Qatar’s Ras Laffan LNG complex, which handles 30% of the world’s helium, is estimated to take 3 to 5 years to repair. Helium is critical for semiconductors and MRI machines. That’s not a disruption. That’s structural damage. Chemical and steel manufacturers are imposing surcharges of up to 30%. Analysts are warning of permanent deindustrialisation. European gas storage was at just 30% after a harsh winter. If the strait stays restricted through summer, Europe can’t refill for next winter. In Ireland, fuel protests shut down Dublin for four days. The army was deployed. Over 100 fuel stations ran dry, with warnings of 500 by end of the week. Downing Street has held talks on the potential for mass protests here. The OECD has downgraded the UK more than any other G7 nation. Growth slashed from 1.2% to 0.7%. Inflation forecast nearly doubled to 4%, with some saying it could breach 5%. Starmer and Trump spoke this week about military options to reopen the strait. The UK is leading a 30+ nation coalition. But the ceasefire is already fracturing. Iran re-closed the strait over Israeli strikes on Lebanon. Reeves is boxed in by fiscal rules. Higher gilt yields are eating her headroom. And I haven’t heard a credible plan from anyone in Westminster. Energy. Food. Fertiliser. Aviation fuel. Mortgages. Industrial chemicals. Semiconductors. Shipping. Government borrowing. Political stability. All under stress. All compounding. This country imports 44% of its energy. Has almost no gas storage. Imports most of its food and fertiliser. Gets a quarter of its jet fuel from behind a mined strait. Every structural weakness built up over 20 years is being stress tested at once. The next three months aren’t going to be uncomfortable. They’re going to be defining
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@LovellPropguru @proptechpioneer it’s not weird behaviour nor is it selfish, Richard. Investors get to choose and most don’t want to tenants, even at the risk of there being a void period. And might surprise you to learn that owner occupiers don’t want people living in their new home too.
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@proptechpioneer So this weird behaviour is because some people want to get out of BtL . It makes no sense to me for those intending to stay investors. It does rather point to how selfish many BtL L/Ls can be, making them poor L/Ls in the first place.
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Last-minute surge in evictions as law change looms
This is not a surprise, we are currently working with a couple of hundred Buy-to-Let landlords at the moment our advice to all of them is if they intend to sell in the short-term and the tenant in situ cannot buy the need to serve notice before the end of the month.
Options become more challenging once the RRA is in place.
thenegotiator.co.uk/news/regulatio…
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@rxquejunixr @huntsmanreturns Please don’t rub it in for the ‘sarf Londoners
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South london supremacy
😶🌫️@sh71kh
Just your average street in San Francisco, London could never 🥲
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@trevgoes4th @techtoby__ Yes, what can possibly go wrong. We need to stay focused on the greater good, nothing else matters.
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@overtondoor @techtoby__ I am sure the labour and materials bear no cost when it is for the greater good
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Why? We should build all forms of energy.
The tit for that between renewable and non renewable is stupid. Build everything.
Richard Tice MP 🇬🇧@TiceRichard
Disgraceful appalling decision We @reformparty_uk will do our best to stop this being built or connected
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@trevgoes4th @techtoby__ The debt is not real, it’s just a future tax.
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@techtoby__ there is no money Toby
we have 12 trillion in debt and run structural deficits
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@trevgoes4th @techtoby__ But surely if you’re building it for the greater good of society, the cost is irrelevant? right?
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@techtoby__ you know you have to pay for things right Toby?
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@DuxVul @BladeoftheS Might’ve started with John Major actually, and then perpetuated by Blair
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@BladeoftheS So only 10% of people should go to Uni
That was how it was before Tony Blair told kids to go and do fanny studies
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An average graduate finishes University with nearly £50,000 in debt.
To pay back just the interest on 6% they would have to start on £58,000 a year.
Just 10% of people earn this.
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@RollingHedge @TheGreenParty Speaking of all, I think it’s time to rebuild the wall and this time to make it higher
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They’re fucking insane, the lot. Absolute wall to wall perma-retards @TheGreenParty 🤣
Merryn Somerset Webb@MerrynSW
Scottish Green candidate wants "complete abolition of prison system." "No prisons, no borders, no cages." Sounds nice. Is completely mad. However under Scotland's awful list system she will become an MSP. Even if she goes not get a single vote (which she shouldn't).
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@iAmJoshHunt Quite a few council without majority I reckon. It’ll mostly be a mess, but you won’t be able to tell the difference.
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This seems good to me.
Youth clubs seemed naff to me when I was a teenager, but the evidence is that they do reduce crime and improve school outcomes: teenagers in London areas where youth clubs were shut in the 2010s were 17% more likely to commit crimes, and did worse in their exams, than teens in comparable places where they stayed open. (ifs.org.uk/sites/default/…)
I assume some of these kids have quite unpleasant home lives – cramped homes, shared bedrooms, and/or family members who aren't very nice to be around – and want somewhere else to be in the evenings. Better at one of these playing video games or football than hanging around on the street.
bbc.co.uk/news/articles/…
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@milli_e17 @huntsmanreturns Thank you, but being honest it was not mine
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@overtondoor @huntsmanreturns Don’t forget Crouch Hill and Alexandra Palace as well! 😍😍😍
Lovely pic by the way 👍🏼
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Overton Door retweetledi
I've spent the last 24 hours laying out what's broken in the UK. And I stand by all of it. But I also believe this country has everything it needs to turn this around. We just need the honesty to admit what's not working and the courage to do something different.
The UK has world-class universities, a legal system the world trusts, a language the world speaks, a creative sector that punches miles above its weight, a financial services infrastructure most countries would kill for, and some of the most resourceful, inventive people on earth. We invented the industrial revolution, the internet, modern medicine, and half the sports the world plays. This is not a country short on talent or ideas.
So what's gone wrong? We stopped investing in the things that made us great and started coasting on house prices and financial services. We need to reverse that. Here's where I'd start…
Make it easier to start and run a business. The UK should be the best place in the world to be an entrepreneur. Cut the red tape, simplify the tax system, and stop treating small business owners like they're a problem to be managed.
Fix the planning system. We can't build houses, we can't build infrastructure, we can't build energy capacity. Nothing gets built because everything gets blocked. This is fixable. Other countries manage it.
Invest in skills, not just degrees. We need plumbers, electricians, engineers, builders, technicians. Parity of esteem between vocational and academic education isn't just nice to have. It's essential.
Embrace AI as the way to break Baumol's Cost Disease. If we can make healthcare, education and public services genuinely more productive through technology, the fiscal arithmetic changes. This should be a national priority, not an afterthought.
Build energy sovereignty. We had it once with North Sea oil and we let it go without replacing it. Nuclear, renewables, whatever it takes. An import-dependent energy system is a vulnerability we can't afford. If that means scrapping net-zero, so be it.
And above all, be honest with people. Stop promising that the next budget will fix everything. Tell people the truth about what's coming and trust them to rise to it. Because they will. They always have.
This isn't a country in terminal decline. It's a country that's been badly managed for thirty years and is overdue a reset. The talent is here. The ideas are here. The resilience is here. We just need leadership that's honest enough to level with people and bold enough to act.
I'm more optimistic about what this country could be than I am pessimistic about where it is. But the first step is admitting where it is. And sadly, no one seems up to that task, but I’m sure it’s coming, because people are clearly fed up with the miserable trajectory we're on.
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This snapping turtle is fishing with its tongue that has a worm-like appendage that lures curious fish close
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Overton Door retweetledi
AI is the only thing that could break the UK out of its fiscal doom loop. If it can make healthcare, education, and public services genuinely more productive, the maths changes.
But here’s the paradox. The jobs AI is replacing first aren’t the expensive public sector ones that need to get more productive (not knocking people in these roles btw). They’re the private sector knowledge jobs that generate the tax revenue that funds everything else.
We might lose the tax base before we fix the cost base
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Overton Door retweetledi
Yeah. The entire UK economic model became dependent on rising house prices as a substitute for actual productivity growth. And we stupidly, fully embraced it as a nation.
Houses going up made people feel richer, so they spent more, which generated tax revenue, which has funded public services.
Now that we strip that away, you don’t just have poorer homeowners. You have a fiscal crisis because the wealth effect was propping up consumption and therefore the tax base.
Seriously ugly times ahead.
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@trevgoes4th @Ikram_HHH 🫣
Perhaps we need a nationwide Truth and Reconciliation session, esp for those of us who are late bloomers.
You can chair it, Trev.
Many of us will need to accept you calling us cunts, cucks, etc.
Small price really!
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Almost all of you cunts supported lockdown
Most of you supported open borders and windmills and welfare extension
Welcome to the consequences of your high status beliefs
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@shivmalik @L_Wastell why don’t your show your numbers first, Shiv?
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My report "I Can Fly" is now 100,000+ words including appendices.
Shiv Malik@shivmalik
Our report "We Can Build a City" is now 85,000+ words including appendices. Handing it in to government tomorrow.
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@KMc_head @hector_drummond There is a culture of using guidelines as a crutch; why think, question or be critical when you can just follow the guidelines
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@hector_drummond People in the UK can't help but pretend that voluntary guidelines are compulsory when it suits them...
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Is this really true, though? Because there are plenty of houses being built with large windows, eg. all those Grand Designs-style boxes in the countryside with massive windows. Is this just developers' interpretations of "guidelines", which aren't strictly legally compulsory?
Royal Fine Art Commission Trust@RoyalFineArt
The grim result of current UK building regs - such as British Standard 8213-1:2004, which requires that all windows be cleanable from inside by women aged 64–75 without the use of ladders or cleaning devices and without stretching.
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