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Is the UK going to be bankrupt?

A warning from the IMF, Central Bank Interventions, and disorderly currency movements are leading the UK towards an economic crisis. Today the UK is facing one of its worst financial crises in history. Moreover, it is also facing rising food prices, a worsening cost of living crisis, and a prospect of recession. As a result, the USA has announced an 80% increase in electricity and gas bills, in turn worsening the cost of living.

To add to that, the Russian gas cuts are also affecting their economy adversely. The pound has become one of the worst-performing currencies with its value dropping by 24% against the dollar. Shortage of gas during a peak consumption time with no storage options has shot up energy prices.

Due to this, the newly elected prime minister Liz Truss has come up with something called the ‘Mini Budget’ in which the rich and poor will be charged the same cost of money without any consideration for the amount of energy they are consuming which will cost the government and the poor heavily.

So what will happen if the UK actually goes bankrupt? It would call on the IMF to look and put together a package of loans and debt rescheduling and usually combine that with fiscal measures such as tax hikes and social security cuts. The currency would face massive devaluation and the rate would be hiked dramatically to attract inward investment.


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