Dear FO° Reader,

Roberta is away this Sunday. So, I am stepping in to fill her shoes and shine the light on a country where I once studied, worked and lived, and have since come to love. Yes, I am speaking about the United Kingdom of Great Britain and Northern Ireland.

Great Britain does not feel so great anymore. In fact, Great Britain is in a great crisis. This crisis is reminiscent of the 1970s. Political, economic and social turmoil has caused a crisis of confidence in the UK. Adrian Pabst, a professor at the University of Kent, has called the UK the sick man of Europe, a term Tsar Nicholas I used for the Ottoman Empire in the mid-19th century and The Economist used for Germany in the late 1990s and early 2000s. 

Angela Rayner, the deputy prime minister and deputy leader of the Labour Party, has resigned after a tax scandal. She bought a flat in Hove, a seaside trendy town, for £800,000 ($1.1 million) and paid a tax of £30,000 ($40,500), instead of £70,000 ($94,500). Supporters point out that she is the victim of puritanical interpretation of complex rules. Opponents argue that the feisty politician who called Tory leaders “a bunch of scum” has fallen by her own sword. They point out that Rayner vigorously denounced the tax records of her rivals.

In addition to political scandal, the UK is facing economic trouble. Economists and bond traders warn of a 1970s like stagflation. Prices rose by 3.8% in the 12 months to July. This makes interest rate cuts by the Bank of England unlikely. Long-term borrowing costs have risen and 30-year bond yield is 5.5%. Interests are rising because markets have little confidence that British Prime Minister Keir Starmer’s government will curb the UK’s large deficits and mounting debt. Add to that a low growth and a low productivity economy, and there is a real risk that bond markets could make life for Chancellor of the Exchequer Rachel Reeves very difficult. Already, Reeves has broken down in the House of Commons, triggering a fall in bond prices.

As if political and economic trouble were not enough, social tensions are rising in the UK. Nigel Farage, the man who held aloft the torch for Brexit long before the term came into being, is now riding high. Reform UK, Farage’s new populist party, is setting the political temperature by stoking concerns over mass immigration and other parties are struggling to respond. The venerable Conservative Party is led by Kemi Badenoch, a leader of Nigerian origin who was born in London but grew up in Lagos and only moved to the UK at 16, is discombobulated by Farage. The Labour Party is faring no better. 

In March, Starmer said that Britain risked becoming an “ island of strangers,” echoing Conservative politician Enoch Powell’s 1968 speech predicting “rivers of blood” in the country. The primal emotions unleashed by the abuse of mostly white girls between 11 and 16 by grooming gangs largely of Pakistani origin in South Yorkshire has further deepened ethnic and religious divisions. In a nutshell, all is not well in Great Britain these days.

Double, Double Toil and Trouble

Starmer has only spent one year in 10 Downing Street, the iconic residence of the prime minister. Already, there is talk of replacing Starmer even though Labour, unlike the Tories, does not have a history of defenestrating its leaders. Starmer’s supporters argue that he has inherited a poisoned chalice. Post-Brexit Britain has never quite recovered its mojo, especially after the carnage caused by Covid. Opponents argue that Starmer has failed to give decisive direction on crucial areas such as social care, child poverty and industrial strategy. 

As I have said on more than one occasion, British politics is an unending battle between roundheads and cavaliers. The former are conviction politicians who charge at the windmills in the Oliver Cromwell tradition. The latter are quicksilver bon vivants who place pragmatism over principle. Starmer is a roundhead while Rayner is a cavalier in the Labour Party. Now, Rayner, who has a reputation of keeping it real, is gone and Labour is a lot weaker.

Here are a few pieces on the British political crisis from a wide array of sources that caught my attention.

Source: Starmer’s stormy first year: Why his political honeymoon was so short-lived | BBC

Source: Rayner’s exit is a bombshell. But the real crisis for Starmer may have only just begun | Jonathan Freedland | The Guardian  

Source: Angela Rayner “a genuine political loss” | Andrew Marr | The New Statesman

Source: Keir Starmer was on the brink of disaster so finally, he acted | The Telegraph (behind a paywall)

Source: After a tax scandal, Britain’s government gets a shake-up | The Economist (behind a paywall)

Economic Doom Spiral

Brexit, Covid and the Russia-Ukraine War have all hit the economy hard. The British economy “is stuck in a vicious circle of persistently high inflation and low or no growth for the foreseeable future.” Decades of low productivity growth and low investment are hurting the economy. Jobs are scarce, wages are low, welfare is high, deficits are large, debt is mounting, inflation is rising, and bond markets are nervous.

All of this is happening at a time of trade wars, increasing inequality and a cost-of-living crisis. Boris Johnson’s glib promise of leveling up has failed. Reeves is scratching her brains as to what to do to conjure up tax money to sort out the UK’s public finances. Great Britain is very much giving us the 1970s feel when stagflation and strikes eventually led to the Winter of Discontent between September 1978 and February 1979. That winter paved the path to 10 Downing Street for Maggie Thatcher and many fear Farage might benefit from the current crisis.

Here are some sources on the British economy that are worth a look.

Source: Britain is in the eye of the financial storm Investors are losing confidence | UnHerd

Source: Is the UK Economy REALLY on the Brink of Collapse? | Economics Help

Source: How private equity hollowed out the UK’s economy – Angus Hanton | Spectator

Source: The sick man of Europe – NIESR 

Source: How deep is the UK’s fiscal hole? | Financial Times

Source: What would a Keir Starmer fragrance smell like? Wonder no more. Dead Ringers | BBC Sounds 

Source: Straight to the point Starmer | Spitting Image 

Barbarians Taking Over the Scepter’d Isle

When Tony Blair walked into 10 Downing Street in 1997, Cool Britannia came into vogue. Multiculturalism was fashionable. Today, a great angst grips Great Britain. More than 29,000 migrants have already crossed the English Channel in 2025 in small boats. A one in, one out deal between the UK and France has satisfied no one. At a time of economic pain, the British deeply fear rising strain on social services and greater divisions because of increasing numbers of migrants.

Nothing has excited public opinion more than largely Pakistani grooming gangs abusing young white girls in South Yorkshire. On the left, many argue that the data is mixed or inconclusive. They say that singling out Pakistanis is racist and Islamophobic. Others say that the British establishment is “tolerant of intolerance” and is engaging in reverse racism for the Muslim vote. The use of the term Asian grooming gangs has caused fury among both Hindu or Sikh Indians as well as Muslim Bangladeshis as well as those of East Asian origin who point out that the South Yorkshire gangs were mainly Pakistani.

The national audit on child sexual exploitation and abuse found that “the ethnicity of perpetrators is shied away from and is still not recorded for two-thirds of perpetrators, so we are unable to provide any accurate assessment from the nationally collected data.” This lack of data has caused fury. Some blame demagogues for scapegoating Muslims given the lack of data. Others are convinced that the lack of data is proof of a cover up. The audit report does go on to note that there is enough evidence that disproportionate numbers of Pakistanis in Greater Manchester, South Yorkshire and West Yorkshire were “amongst suspects for group-based child sexual exploitation.”

In June, Sadeq Nikzad hit the headlines. This 29-year-old asylum seeker from Afghanistan raped a 15-year old girl on a street in Stirlingshire. Nikzad did not accept that he had done anything wrong, citing cultural differences and a language barrier as his excuse. He arrived in the UK on a small boat in 2023. Such crimes have enabled Farage and Tory leader Robert Jenrick to conjure images of barbarians invading British shores. The former has promised to stop immigrant small boats within two weeks of coming to power while Jenrick has declared, “I care more for my daughters’ safety than the rights of foreign criminals.” Like continental Europe, immigration is exciting primal emotions and even raising the specter of new crusades against incoming dark-skinned Muslim hordes.

Here are just four sources on contentious issues where race, religion, gender relations, justice and more are at play.

Source: How Britain’s Migrant Fury Sparked Civil Unrest | Times Originals

Source: What are grooming gangs? UK scandal explained | The Week

Source: Cousin marriage: The new evidence about children’s ill health | BBC

Source: What Is The UK’s Issue With Immigration? | The Rest Is Politics

Source: The Fall of England – Dr David Starkey | Triggernometry

As the morn, in russet mantle clad, walks o’er the Potomac in Washington, DC, I bid you adieu after a sleepless night.