Another old European power's economic recovery has become "empty talk", but it has to "pay" for US debt
Since the first industrial revolution, some European countries led by the United Kingdom have taken the early train of rapid economic development, and hundreds of years later, these old European powers are still standing at the top of the world.
But the way of heaven has changed in 30 years, and with the strong rise of some eastern powers in recent years, these old powers in Europe no longer seem to have the limelight of the past.
With the official release of UK GDP data in the last quarter of last year, it also means that the economic recovery of another old European power after Italy may become empty talk.
At the same time, however, the United Kingdom, as America's closest European ally, has to continue to pay for US debt.
Since the UK officially left the EU on January 31, 2020, the UK** has pinned its hopes on ending EU membership and forging closer economic ties with major powers such as the US.
However, this decision did not bring the expected economic prosperity, on the contrary, the United Kingdom lost the best convenience in the European Union, and the new tariff barriers made the industries and fields that previously had zero tariffs face huge obstacles.
Data shows that in just one year from 2020 to 2021, the number of British companies exporting to the EU has decreased by nearly 9,000, and the total export value has decreased by 20 billion pounds compared with 2018, which means that the UK has lost its original big customers and the economy has been severely impacted.
The United Kingdom** tried to make up for this loss by signing free trade agreements with the United States and other countries, but the support of the United States in this regard did not come as expected.
In addition to the ** problems caused by Brexit, the UK is also facing a heavy blow from external factors.
The escalation of geopolitical conflicts, the high level of international commodities** and the energy crisis caused by the Russia-Ukraine conflict have directly led to a surge in the cost of imported raw materials for British companies.
This series of events, coupled with the black swan event of the epidemic, has made the British economy even worse.
Under the influence of the intensification of geopolitical conflicts, international commodities** soared, which further increased the cost of raw materials for British companies.
This inflationary pressure has forced the UK to tighten monetary policy and hike interest rates in the footsteps of the Federal Reserve, which has further raised the cost of financing for businesses and exacerbated the economic downturn.
What's more serious is that the energy crisis suffered by the UK in the geopolitical conflict has led to a surge in energy**, and enterprises are facing higher production costs, which not only affects the manufacturing industry, but also directly impacts the living standards of ordinary residents.
In order to control the level of domestic inflation, the United Kingdom** was forced to follow the policy of the Federal Reserve, and raising interest rates became a last resort, which made the already struggling British companies in the economy even worse.
Britain has always been known for its high welfare, but this welfare system has become a huge burden in the context of an economic downturn.
In the 2020-2021 financial year, UK spending on public services reached a staggering £1,054.8 billion, or 44% of total GDP7%。
This has made the UK's fiscal situation even worse, and high welfare is no longer a symbol of economic prosperity, but a burden to the economic downturn.
In particular, with cities such as Birmingham and Nottinghamshire declaring bankruptcy one after another, the UK's local ** is facing unprecedented financial pressure, which makes the UK's ** debt continue to rise, and borrowing has become a last resort to maintain a high welfare system and local ** operation. Hotspot Engine Program
In the face of such a severe economic situation, the UK has no choice but to take over US bonds.
Although it was induced by the United States to leave the European Union, the United States did not provide the expected support when it actually faced economic difficulties, and after Biden took office, his cold attitude towards the United Kingdom overshadowed the expected free trade agreement.
Still, the UK needs to maintain close ties with the US.
In the past three months, the UK has increased its holdings of US debt to $84.8 billion, and if this rate continues, the UK will quickly become the second largest "overseas creditor" of the United States.
This may not be the UK's first choice, but in the current situation, the UK has no choice but to maintain economic stability.
From this point of view, the decline of Britain is worth pondering.
Economic development cannot be achieved overnight, but needs to be down-to-earth and gradual.
Being overly dependent on other countries can easily fall into passivity and lose autonomy.
High-welfare policies need to be built on the basis of economic strength, otherwise they will only eat more food and overdraft the future.
The wheels of history are rolling forward, and the former hegemon is no longer in the limelight, what will be the future of Britain? Let's wait and see.
In my opinion, the recession in the UK is the result of a combination of factors, including Brexit, the pandemic, and the Russia-Ukraine conflict. In the short term, the UK economy will not recover, and the future development is full of challenges.
Britain needs to seriously reflect on its own problems and formulate a realistic economic development strategy in order to get out of its predicament and regain its glory.
In addition, the UK's relationship with China is also worth watching.
In recent years, China-UK economic and trade cooperation has been deepening, and China has become an important partner of the UK.
In the future, the two countries can further strengthen cooperation for mutual benefit and win-win results, and jointly address global economic challenges.
If you cooperate with us, there is still a glimmer of possibility for its economic recovery.