The Duran Podcast - UK economy on brink of collapse

Episode Date: August 26, 2025

UK economy on brink of collapse

All right, Alexander, we have to talk about the UK economy because the telegraph they put out an article a couple of days ago where they are saying that economists are sounding the warning alarms. They're ringing the warning bells and they are saying that the UK economy is a need of an IMF bailout. this is this is bad news for the UK economy this is this is huge i remember the iMF bailouts with greece this is this is catastrophic and it actually some of the economists are saying that that the UK economy is is in an even worse position than then where greece was in 2008 2009 when the troubles really started to hit greece so anyway your thoughts on on this explosive news about the UK economy Seems like it just came out of the blue, but it really didn't.

I mean, you've been warning about this for, I think, the better part of a year now, maybe even longer than that. But it just seems like it just kind of hit right away. And they're blaming Rachel Reeves on for all of this. Absolutely. Now, the fascinating thing about this story is that after it, that article appeared in the Daily Telegraph, which, to be clear, is a newspaper hostile to the current British Labor government. And the economists that you mentioned, as I said, most of them I would describe them as right of centre. So they are people who are also hostile to the British Labour government.

I was expecting that the government itself would come out and say loudly and clearly that this story is nonsense. there is no possibility of Britain needing an IMF bailout, that there would be statements from the Prime Minister, statements about this from the Chancellor, statements from the Governor of the Bank of England, that there would be an enormous criticism of the economists, and there would be an enormous criticism of the Daily Telegraph for publishing a story of this kind and arguably undermining Britain's credit reputation. Nothing like that. Absolutely nothing like that.

There have been a few mumbled denials, but nothing like the extent that you would expect. And in fact, what the government has tried to do instead is to suppress this story. So that makes me think that things are, every bit as bad as those economists were saying, because if it were otherwise, surely we would have a full-throated denial of this. Now, the underlying problems of the British economy are problems that we have discussed in many programmes. Anybody who has been following our

programs about Britain, not just over the last couple of years, but going all the way back to the Brexit war and beyond would know about this. And throughout that time that we have been discussing the problems of the British economy, the situation has got worse. And I feel that over the last year, it has got significantly, even dramatically worse. Britain has stagnant falling productivity. Wages in Britain are still lower overall. than they were in 2007. Debt levels have been growing. Debt to GDP ratio is now over 100%,

and there is no sign that it can be brought down. And private debt levels are also very, very high. Young people cannot afford to buy homes and they're giving up trying to do so and they're becoming increasingly resentful and angry, and they're not setting up families, and they're starting to stop having children. So we have a demographic problem developing as well.

And to add to everything, and I've said this many times, we've discussed this many times in program, after program, three and a half years ago, Britain was at the forefront of launching the economic war against Russia. We talk about it is sanctions, but it was really an economic war against Russia. That particularly badly hit Britain as a financial centre. Before the 2014 crisis, the Russians had made a big presence in London.

They used to float companies, as I well remember, in London. Then 2014 came and that stopped and then 2022 came and that declined even further. So Russian money isn't coming in. More importantly, Britain supported the sanctions against Russian energy. That has left energy costs in London, in Britain, sorry. I believe at the highest, the highest in all the G7 countries. I mean, they're higher than in Germany, just to say. We talk a lot about Germany and the deindustrialization processes in Germany because energy costs are so high there.

They are higher still in Britain. Many people say this is partly because of government policies in trying to promote the green transition. And yes, this has played a role, but to repeat again, it is the sanctions against Russia that have made the biggest contribution to increasing energy costs. The result is that we've talked about deindustrialization in Germany. There's been deindustrialization in Britain too. The steel industry, what's left of it, is closing. we're having more problems in other parts of the British manufacturing economy as well. And then on top of everything, we now have tariffs by the United States, Trump tariffs.

They've affected the car industry to some extent, but they are affecting other sectors of the British economy even more because some sectors like steel, for example, are tariffed at a much higher level than the 10% tariff that Britain has to work with. At the same time, we have a steadily increasing welfare bill because I've discussed the pressures on people. Real wages are stagnant or falling. Young people cannot buy homes. They feel that if they work, it's going to be just, they'll be working just to pay rent. They won't be able to accumulate money or to set up businesses or do all of those sort of things.

The result is that more and more people are dropping out of the employment process. They're starting, they're falling into the benefit system. The benefit system is rising. The Labour Party has shown that it is very unwilling. willing to accept any cuts in benefits. So the government now is looking on top of all of the huge increases in debt at the prospect of a significant budget deficit. The whole in the budget is supposed to be around 50 billion pounds, about 70 billion dollars. Where are they going to find that money? They're talking about increasing taxes, the taxes that they're going to start to

front load on wealthier people, which inevitably, despite denials, is going to affect enterprise. It's going to make money leave Britain, because rich people can leave and they will do so. And increasingly, you get the sense that the international financial markets are looking at the situation. They say this country is ungovernable. It cannot raise taxes because taxes can't be raised. beyond the point that they've already reached. Taxes have gone about as high as they can go.

They look at the situation in the underlying economy. It looks increasingly bad. They look at the welfare budgets. They look at the levels of private debt. They look at the level of state debt. They say this is unsustainable. And there is no obvious way out. So it is not impossible.

that we could have a financial crisis, a crisis in the British bond markets. And it is not impossible that this could lead to recourse to the IMF. It is, in fact, something that has happened before. You said that you remembered the IMF bailouts in Cyprus. I remember the IMF bailout in Britain in 1976, which has had a... tremendous effect on the British, you know, institutional memory. I think personally that the situation today in Britain is much worse than it was in 1976.

Inflation was higher then. But on every other metric, debt levels, decline in the industrial base, wage levels, all of that, the situation. in Britain today is much, much worse, far less sustainable than it was in 1976. Yeah. This is why Stammer needs to keep the war going in Ukraine. Blame everything on Russia and keep people distracted on Russia, but it's not working. What happens if the UK does go to the IMF? What does the IMF do to try and bail out and help the UK? I mean, what can they do? And the second, my second question is, will this be used as an excuse to push the UK back into the EU?

Will they say, well, the real reason that we have problems because we had Brexit, so let's just go back into the EU? They'll never admit that the real reason that this is going on is because of their stupid war against Russia. They've lost the economic war. they've lost the military war and then they've lost the economic war. And that it's really hurt the UK in immeasurable ways. Anyway, what are your thoughts there? The narrative that the entire problem is due to Brexit is all over the place. I mean, it has repeated endlessly in what you might call the remainder media and among remainder supporters. And unfortunately, and I say unfortunately, because I believe that this is a complete red herring.

But unfortunately, it is becoming increasingly widely accepted, even amongst people who previously supported Leave, just to say. I mean, it's a myth. I believe it's a myth. But it gets reported continuously. And I absolutely think it is entirely likely that the IMF will say to Britain, look, what you've got to do is rejoin the single market. It was pulling out of the single market that created all your problems.

So you've got to go back into the single market. And that will be a pathway back into full EU membership again. But before then, what the IMF always does is it likes to put countries that it comes to help on the path of what it calls financial sustainability. that means massive, that means budget consolidation, which, you know, you could argue Britain needs. And that means higher taxes, but it means major cuts in public spending. I mean, the welfare bill, the extra funding for the NHS, all of those things. I mean, they would want all of that cut.

Now, I have to say this, if you travel around Britain, and I have been traveling around Britain recently, I was on a holiday. It's a short one, but I went outside London. I mean, the decline in British infrastructure is very, very visible. You can see that local governments no longer have funds to repair bridges, keep roads in good shape, fill in potholes, do those kind of things. Collect rubbish, clean out the graffiti. You can see this, I mean, in London, you can see this very visibly. You can start to see this outside London as well now.

So the kind of cuts that the IMF will demand, I don't know what they're going to do. I mean, it's going to undermine the situation there. If you start cutting infrastructure spending, given that infrastructure is in a poor state already, I shuddered to think what is going to mean. And of course, if they start cutting social spending, which perhaps they'll have to. Well, but I mean, on a scale that those parliamentary rebellions, which we saw a few weeks ago, I mean, they objected to what the government was proposing then. But what the IMF will demand will be much, much worse than that.

Well, much, much deeper than that. Well, I mean, it will destroy the political fabric of Britain because I don't believe that the Labour Party would be able to survive that. Arguably, old Labour, the party of Clement Attlee, never recovered from the IMF bailout of 1976. It was the IMF bailout of 1976 that ended the old Labor, 1945 post-war settlement, Social Democratic Britain. If we have another IMF bailout this time, probably much more draconian than the one we saw in 1976, then I think Labour as a party is gone.

And this at a time when it is already in a very, very bad shape. Latest opinion poll that I saw in Britain put Farage Reform UK on 33%. Labour, the government party, on 18%. Conservatives on 17%. The Conservatives are not recovering. They completely failed to capitalise on Labour's profits. on Labour's problems, on Starmer's unpopularity. All the political energy is draining to Farage. And at 33%, he's polling almost twice as much, almost as much, sorry, almost as much as

as Labour and Conservative combined. Now, that is incredible. We're at a brief moment in 2019, at the height of the Brexit wall when the same thing happened. But it was easy to change the situation then. Boris Johnson took over. He committed the conservatives to, you know, carrying out Brexit. He managed to deliver on that, if you remember. Farage pulled back and said that candidates of his party

of that time would not stand against conservative candidates in the parliamentary elections in 2019. That was an unusual. That was an aberration. The situation we have now with Reform UK at 33%, so far ahead of the other two parties is not looking like an aberration at all. It is looking like the baseline reality. And that is an astonishing moment. And if Labor has to negotiate an IMF bailout, so then I mean, it's gone. I think the Labor Party, as we have known it, the Blairite Labor Party that came back to power in 1997 will be gone forever and for good.

Yeah, they really made a mess of things. But so did the Conservatives. I mean, let's be honest, the conservatives got the ball rolling, especially with sanctions and the conflict in Ukraine and Boris Johnson, chief amongst the people that got the ball rolling on the UK economy collapse. Farage, you know, he played along with Boris back in 2019. So what can Farage do now? What will reform be able to do if they do govern? I mean, they, they. They definitely have a clear immigration policy. At least that's how it looks for my point of view. It seems like they have a clear policy on immigration. You know better than I do.

But on everything else, I just don't know what their position is. I mean, can reform fix this? A lot of damage has been done by these two parties. Or is this just hoping that a new party will do something, something to stop the slide? Well, can I just say something about the Conservative Party? I mean, the Conservative Party, to my mind, has never recovered from its ousting of Margaret Thatcher in 1990. It has been drifting ever since. It's had gone from one poor leader to another.

The last period of Conservative government, which started with David Cameron, all the way up to Rishi Sunak, was a disaster and is widely seen so. and people who look at the Conservative Party now across Britain, the British people are not impressed by it. It also is the case that their current leader, Kemmy Badenock, is not impressing anybody. There's some talk about another person, Robert Jenrick, who might take over conceivably from her. I have to say, I don't know very much about him. He does seem slightly more have more political enemies. behind him. He's been a bit more critical about the Ukraine conflict, for example. But I can't imagine that he's any big substantive break. I don't think the conservatives are coming back.

As with Farage, I think you're absolutely what. Farage's success in politics has been centered on a single issue, two single issues. One, EU membership, which he opposed. And he managed to gain support across Britain amongst the British people to take Britain out of the EU. And it was an incredible achievement. The second was immigration, as you absolutely rightly said. I mean, he's made that, he's major flagship issue. And again, he's gained traction over it. I mean, to some extent, of course, it must be said, he's responding to social pressure.

But he's never come up with anything that remotely approximates to my eyes to a program for British renewal. He's never seen himself or envisaged himself in that way before. I mean, when the Brexit referendum happened and leave one, he actually left politics for a time. He doesn't come across to me as a person who is. really ready or made to become prime minister. He's not Margaret Thatcher or Clement Attlee, or Beall Winston Churchill, who has a kind of programme and a set of ideas and knows their way around the British establishment

and knows where to pull the levers and how to make things work. That's never been my sense of what Farage is. And I don't say that as any kind of criticism of him, the way, I'm simply stating a fact about him. So how this is going to work if he does become Prime Minister of Britain, I simply don't know. In the House of Commons, where he is now an MP, he's barely made any kind of impression at all. And, well, maybe one shouldn't judge him too harshly by that. Many will say, well, what importance does the House of Commons have anymore? But I personally would still expect a leader, a future Prime Minister, to make a big impact

there, to dominate the House of Commons in the way the British Prime Ministers of the past, Churchill, Attlee, Harold Wilson in the 60s, Margaret Thatcher, obviously all did. Sounds like an impossible situation. I mean, I don't want to say impossible, but it just seems like such a terrible situation that the UK finds itself in. I mean, they have to pull back from everything, right? All the Ukraine stuff, all the international intrigues, all of these things that they have to focus on the home front. I mean, that's obvious. But who's going to do that?

There are some people who are saying this. And this is, you're absolutely right, and this has to be the starting point. They are all to be found as far as I can see on the right. There are some people on the left who talk like this too. But the only consistent opposition to this, the only intellectually coherent opposition to this is coming from certain people on the right. And there's now talk about the old rights and the new right, the new right, apparently starting to speak out more and more about the fact that Britain can't continue in the way that it is. It needs to put these illusions of grandeur behind it and focus on what it is.

There's a man called Or, just to say, Or, O double arm, forget his first name. But he's made some waves. He wrote an article which the Daily Telegraph published in which he said that Kent is more important than Kiev. So Kent is an English county for those who don't know. So that did create a stir and you can see that there are people like that in the UK today. But they're very, very far from being at the centre of power. And he himself complained that he had a meeting. with members of the Conservative Party some time after the election.

He was telling that he went to talk to them about the tremendous problems that Britain was facing and that the Conservative Party was facing. And then he was astonished to find all of these Conservative Party members almost immediately start discussing Ukraine. And the fact that Zelensky and James. D. Vance didn't get on. And he said, you know, he said, you know, he said to them, you know, are you serious? Are you, is this really what you think you're about? And it turned out they were. So, I mean, you know, but, but anyway, there is an awareness of this. And

there are some people who are talking about it to repeat again. And it's a point I've made many times. If Britain sorts itself out, if it governs itself properly, if it has a political system that is accountable again, because all of this has happened, because accountability in Britain has completely broken down, if we finally have a situation where there is again the proper transmission belts and connections between the people of Britain and the political class, then there is every reason why this country could prosper, objectively. We are still a fairly big country. Many, many people here are very highly educated, very skilled, a workforce that potentially is very, very skilled. We have all of the...

assets and skill sets that we need to do well in the modern world, but we are not using them because we are distracted by all of these foolish and unnecessary things. And just to finish, going back into the European Union, coming under Ursula's umbrella is not the solution to our problems. It's where our problems ultimately began. Yeah. Yeah, I worry that that's the path that they're going to take in the end, though. That's what they're going to sell the people.

I think a lot of the population is going to buy into it, that it was all Brexit. That was a mistake. So if we just go back into the European Union, that will be the quick and easy fix to all of this. Exactly. That's my fear of what's going to actually happen. Exactly. All right. We'll end it there.

The duran. Dot locals.com. We are on Rumble and Odyssey and X and go to the Duran shop, pick up some rich like what we are wearing this video update. There is a link in the description box down below. Take care.