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Ask HN: What Is Happening in the UK?

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Re: Ask HN: What Is Happening in the UK?

#11

Post by greybox »

cbeach wrote: post #3

The pound is low against the dollar, as is the Euro low against the dollar. The pound dropped in value a few days ago, but the price has recovered since then. The media chooses to focus on the drop rather than the recovery, because the drop coincided with a government announcement of some pro-growth economic policies that mainstream pundits disagree with. If you speak to people in the U.K. many would agree that payin…

I don't want to get in to discussing the politics or ideology here, but.

I wouldn't say that it's just "some people on the left" - I dont want to place myself on either side of the fence but sky news are doing interviews with cross sections of Conservative / Labor / Swing voters and most of them think that this is Truss's fault.

You are correct that this has coincided with the dollar making gains against most other currencies, and the effects of the mini-budget may be difficult to dis-entangle from that, but from the people I've seen interviewed, most people agree that the mini-budget has at least made things worse for the pound. It's worth pointing out that the pound has fallen significantly against the euro too[0].

[0] - XE dotcom

Re: Ask HN: What Is Happening in the UK?

#12

Post by yuvadam »

Led by the US, the entire world is in a debt spiral, and just like many of the systems that sustain modern civilization, the global economy itself is in various stages of unraveling from its unsustainable path [1]

[1] - https://lookingglasseducation.com/whats-a-debt-spiral-and-is...

Re: Ask HN: What Is Happening in the UK?

#13

Post by ajsnigrutin »

cbeach wrote: post #3

The pound is low against the dollar, as is the Euro low against the dollar. The pound dropped in value a few days ago, but the price has recovered since then. The media chooses to focus on the drop rather than the recovery, because the drop coincided with a government announcement of some pro-growth economic policies that mainstream pundits disagree with. If you speak to people in the U.K. many would agree that payin…

Yep, same thing is happening in slovenia right now... our previous government did one good thing (in a bunch of other bad things), and that was to lower taxes on paychecks. The current (left-er) one is bringing out the tax reform to "tax the rich", where even people earning average wage (~2k eur gross, ~1300eur net) will get taxed more.

Re: Ask HN: What Is Happening in the UK?

#14

Post by Brakenshire »

cbeach wrote: post #3

The pound is low against the dollar, as is the Euro low against the dollar. The pound dropped in value a few days ago, but the price has recovered since then. The media chooses to focus on the drop rather than the recovery, because the drop coincided with a government announcement of some pro-growth economic policies that mainstream pundits disagree with. If you speak to people in the U.K. many would agree that payin…

I think that tax credit withdrawal still exists, so now the effective tax rate is 40% from £50k to £100k, then 60% from £100k to £125k, and 40% above that.

Also, despite 10% inflation they’ve frozen the tax bands, so all workers earning above about £12k will have more of their income pulled into higher tax bands.

So they’re left with that artificially high rate which blocks progression, and most workers up to about £150k will pay more.

Re: Ask HN: What Is Happening in the UK?

#16

Post by thewarrior »

The UK imports large amounts of energy and other things essential to its prosperity. The UK has a current account deficit which means it does not have enough of the dollar to cover for its imports.

It has solved this problem over the years by borrowing and becoming a haven for investment to cover up the shortfall.

Now we have a bat shit government that says we need to lower taxes and borrow a boat load of money to tide over the energy crisis. The markets don’t see how this borrowing will improve the UKs ability to earn more dollars (or the govt to raise more taxes).

In essence the market realizes that the UK is going to repay its loans by printing money.

Hence the pound tanks in anticipation of it. One way to stop this is to raise interest rates and pull pounds out of circulation but the government is terrified of popping the real estate bubble.

TL;DR - The pound will keep falling and the UK will lose its social services but don’t take this as investment advice.

Re: Ask HN: What Is Happening in the UK?

#17

Post by fnimick »

cbeach wrote: post #3

The pound is low against the dollar, as is the Euro low against the dollar. The pound dropped in value a few days ago, but the price has recovered since then. The media chooses to focus on the drop rather than the recovery, because the drop coincided with a government announcement of some pro-growth economic policies that mainstream pundits disagree with. If you speak to people in the U.K. many would agree that payin…

> the wealthiest 1% are paying 28% of income tax receipts - and this percentage has increased over the last decade

Without any information on how wealth inequality has increased, and the 1% have more income and assets now than they did last decade, this is misleading at best. If the top 1% are paying more taxes but are also making more money, this hardly seems unfair.

Re: Ask HN: What Is Happening in the UK?

#18

Post by fnimick »

cbeach wrote: post #10
bscphil wrote: post #7

Earlier quoted context omitted.

> For that reason I chose to quit my job as a software team manager in an investment bank and instead went to work as a developer in a startup. > I decided there’s no point in working long hours in a responsible job helping other people advance their careers if I keep less than 40p of every pound I earn at that point. I may as well do less responsible work that I enjoy instead. This is an extremely funny takeaway in…

Oh yes, you're not wrong. Many people on the left see tax as an appropriate punishment for wealth. In their worldview, wealthy people are demonised and dehumanised. The left are convinced that wealthy people are parasitic on society. This leftwing ideology seems peculiar to me, having seen the data on who's funding public services, and who's benefiting from public services.

How can you possibly justify keeping even more of your money that you earn from profiting from the work of others, when people in need are freezing and starving? I know HN runs libertarian but this is just abhorrent.

Re: Ask HN: What Is Happening in the UK?

#19

Post by jakub_g »

cbeach wrote: post #10
bscphil wrote: post #7

Earlier quoted context omitted.

> For that reason I chose to quit my job as a software team manager in an investment bank and instead went to work as a developer in a startup. > I decided there’s no point in working long hours in a responsible job helping other people advance their careers if I keep less than 40p of every pound I earn at that point. I may as well do less responsible work that I enjoy instead. This is an extremely funny takeaway in…

Oh yes, you're not wrong. Many people on the left see tax as an appropriate punishment for wealth. In their worldview, wealthy people are demonised and dehumanised. The left are convinced that wealthy people are parasitic on society. This leftwing ideology seems peculiar to me, having seen the data on who's funding public services, and who's benefiting from public services.

The real issue, everywhere, is that the ordinary people are made believe those earning 100k are ultra rich, and should be taxed to death, and not those earning 10M+, or having inherited millions.

Re: Ask HN: What Is Happening in the UK?

#20

Post by steve_gh »

cbeach wrote: post #3

The pound is low against the dollar, as is the Euro low against the dollar. The pound dropped in value a few days ago, but the price has recovered since then. The media chooses to focus on the drop rather than the recovery, because the drop coincided with a government announcement of some pro-growth economic policies that mainstream pundits disagree with. If you speak to people in the U.K. many would agree that payin…

Quite frankly, you are hugely privileged to be earning at that level. The median average salary in the UK is just under £26k.

Also, when you are that income level, there are a number of tax benefits you can enjoy - for example the first £40k you put into your pension is before tax - so it effectively reduces your salary (for tax purposes) by £40k. SO if you are doing the sensible thing and putting money into a pension, the threshold you talk of is effectively at a £140k salary.

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