According to a longtime Tory supporter, the United Kingdom is “doomed” and on the route to becoming “the sick man of Europe” because of how Brexit was negotiated.
Guy Hands, the CEO of private equity firm Terra Firma and an opponent of Brexit, warned that the United Kingdom could face increased taxes, reduced benefits, and a probable IMF bailout.
His remarks follow a period of unrest caused by the mini-budget.
However, Mr. Hands noted that the difficulties facing the United Kingdom date back far further.
“The reality is that they had a dream when they executed Brexit. And the dream was an economy with low taxes and few benefits “He stated on the BBC’s Today show.
According to him, former Prime Minister Liz Truss attempted to implement these measures but failed.
Mr. Hands stated, “Once you acknowledge that you can’t genuinely achieve that, Brexit is useless and can only lead to a horrible economic state for Britain.”
“There is a chance of turning back the economy if the Conservative party admits the mistake they made and how they negotiated Brexit, and if they have a leader who has the intellectual capacity and the power to renegotiate Brexit; else, the economy is hopeless.”
However, he noted that the Conservative Party was unfit to govern the nation.
“I think it needs to stop fighting its internal fights and instead focus on what needs to be done in the economy and admitting some of the mistakes they’ve made in the last six years that have, honestly, placed this country on the route to becoming the sick man of Europe,” he said.
Government officials have been contacted for comment.
The release of the mini-budget by Ms. Truss on September 23 has been criticized for creating chaos in the financial markets.
As a result of the declaration, which promised significant tax cuts without specifying how they would be paid for, the pound plummeted to a record low versus the dollar, and government borrowing prices spiked substantially.
The IMF has also openly criticized the British government’s tax reduction plans, stating that they are likely to exacerbate the cost-of-living crisis.
The new chancellor, Jeremy Hunt, overturned the majority of the mini-budget last week, a move that was applauded by the IMF.
As investors reacted to the news that Boris Johnson has pulled out of the Tory leadership campaign, the pound strengthened against the dollar and government borrowing prices fell on Monday morning.
This makes Rishi Sunak the leading candidate for prime minister.
On October 31, Mr. Hunt, who supports Mr. Sunak, is due to outline the government’s economic plan for taxes and expenditures.
However, Mr. Hands warned that much more must be done to turn around the economy.
As a businessman, he tries to be optimistic about the investment landscape, he said.
But the reality, he said, is that the nation faces “growing levels of poverty, and it is going up the economic ladder,” reaching middle-income households that will struggle to pay their mortgages.
Expect “progressively growing taxes, steadily decreasing benefits and social services, increased interest rates, and finally the necessity for an IMF bailout,” he predicted concerning the economy.
Lord Mervyn King, a former governor of the Bank of England, warned over the weekend that the United Kingdom was facing a “more tough” austerity period than following the 2008 financial crisis to stabilize the economy.
Lord King stated that “much greater taxes” may be imposed on the typical citizen to pay public spending.
