Confidence among UK residents appears to have been shaken “without a piece of news that’s pushed them there”.
“Which suggests it’s vibes,” says Ed Conway. “The vibes have gone against the UK.”
From Brexit to the budget – it’s all contributing
It’s not as if Britain is a massive outlier, he notes, with the cost of government borrowing also heading up in Europe and the US.
There are global factors having an impact everywhere – such as the imminent Trump presidency and what that might mean for trade.
So quite why the UK’s “vibes” feel particularly troubling right now is “hard to put your finger on”.
“To some extent it’s things like Brexit,” says Conway, and the mini-budget of 2022 also casts a long shadow.
But it’s also Labour’s October budget – “it did not help”.
‘People are nervous about the UK’
Even the run-up to the big day was “making people feel a bit depressed” about the UK’s economic prospects, “with all this language about the economy being in a terrible place and this enormous black hole”.
“They overdid that,” Conway says of Labour.
For different reasons (in 2022 it was to fund tax cuts, in 2024 it’s for public spending), the UK government wants to borrow more money and investors aren’t totally convinced.
“You build up credibility over a long time, as a nation,” says Conway – and for the time being it’s not been rebuilt.
“People still nervous when they look at the UK.”
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