This has been a more than usually bad-tempered election campaign. We are going to press just as it ends, so as I write, I'm afraid I still don't know what the outcome is. However, here's what we do know: regardless of who has how many seats in Parliament this morning, they are starting in a pretty good place. Yes, we still have a budget deficit, and yes, all the party promises of more, more and then a little more spending during the campaign were uncomfortable. But nonetheless, the work done over the last decade has seen the budget deficit as a percentage of GDP fall to a mere 1.2% by last March. Practically balanced.
The employment rate is 76%. The unemployment rate is 3.8%. Real (after-inflation) wages are rising. Our economy isn't booming, but it is still growing (despite the hideous investment-deterring parliamentary indecision of the last three years). The UK is climbing the global educational ranks even with spending on education more tightly controlled than many would like, we are now 14th in science and reading and 18th in maths (out of 79 countries). The NHS, despite Labour telling us every couple of years that we have 24 hours to save it, trundles on. Not perfect. Very far from being the best system in the world. But still there, offering free-at-point-of-use healthcare to 67 million people.
New statistics out this week from the Office for National Statistics tell us that between 2001 and 2019 there was a "statistically significant decrease" in the mortality rate for the under 75s. That's good. And while high house prices and an ageing population are making the wealth inequality statistics pop up (it's happening in the US too), we are well on the way to making the UK a shareholder democracy and sorting out our pension problems at the same time (unlike, say, France). Thanks in large part to auto-enrolment, 42% of total UK wealth is held in pensions (from 34% in 2006-2008) and most working people now have stakes in the equity market. They can also hold those stakes increasingly cheaply (we talk about the new Vanguard Sipp in this week' smagazine). It's also worth noting that amid all the talk of inequality, when it comes to opportunity, the UK is, as Peter Saunders puts it in his new book on the subject (see my book reviews here), "remarkably fluid and open".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
There's bad news of course. Gross government debt is still around 80% of GDP. Our housing woes are still with us. Too many working people are caught up in the welfare state. The low interest-rate environment is causing no end of trouble and could be with us for some time (even Australia is about to start quantitative easing). Productivity growth is horrible and it's easy to be anxious about the future of work in a world of robots. But the core point is that the UK is in pretty good shape. Let's hope that whoever is about to be prime minister, at the very least keeps it like that.
If you can't bring yourself to think about the future of the UK today, James McKeigue looks at how best to invest in the Pacific Alliance nations. Chile Colombia, Mexico and Peru might have their problems, but (rather like the UK) they don't have nearly as many as investors seem to think. If even that doesn't do it for you, forget politics. Think about Christmas wine instead.
-
Trouble brews in B&M as bargain shops take a hitOpinion Once a stock market darling, B&M's share price has slumped. What has gone wrong for bargain shops?
-
US and China reach a ceasefire in their trade war after talks in LondonThe US and China's trading relationship – the most important one in the global economy – is back on track. Will the truce last?
-
Beating inflation takes more luck than skill – but are we about to get lucky?Opinion The US Federal Reserve managed to beat inflation in the 1980s. But much of that was down to pure luck. Thankfully, says Merryn Somerset Webb, the Bank of England may be about to get lucky.
-
How capitalism has been undermined by poor governanceEditor's letter Capitalism’s “ruthless efficiency” has been undermined by poor governance, a lack of competition and central banks’ over-enthusiastic money printing, says Andrew Van Sickle.
-
The biggest change in the last 17 years – the death of the “Greenspan put”Editor's letter Since I joined MoneyWeek 17 years ago, says John Stepek, we’ve seen a global financial crisis, a eurozone sovereign debt crisis , several Chinese growth scares, a global pandemic, and a land war in Europe. But the biggest change is the death of the “Greenspan put”.
-
Things won't just return to normal – that's not how inflation worksEditor's letter You might think that, if inflation is indeed “transitory”, we just need to wait and everything will return to “normal”. But this is a grave misunderstanding of how inflation works, says John Stepek.
-
Car hire and the strangeness of the post-pandemic economyEditor's letter A global shortage of hire cars and unusually high hotel occupancy rates sum up the post-pandemic global economy in a nutshell, says Merryn Somerset Webb, with enhanced demand meeting restricted supply.
-
Everything is getting more expensive – including moneyEditor's letter Investors are about to start feeling rather more pain, says Merryn Somerset Webb – from the rising price of money.
-
We may be heading for recession – and it will be no ordinary recessionEditor's letter Just as the downturn in 2020 was not a typical recession. the next downturn could be very different too, says Merryn Somerset Webb.
-
What companies should be prioritising this decadeEditor's letter In a world beset by uncertainty, companies should be prioritising slack over efficiency, says Merryn Somerset Webb.
