What caught my eye this week.
You won’t find anything more ridiculous, than this new profile
Razor unit, made with the highest British attention to the
Wrong detail, become obsolete units surrounded by hail.The Classical [1]– The Fall
A side theme of this blog over the past few years – much more in these weekend rambles than our investing articles – is that Britain is not the super-rich country it’s been acting – and voting – like it thinks it is.
Not as experienced by the average Briton anyway.
It’s not only me. Contributor Finumus [2] believes the same [3]. The Accumulator largely keeps politics out of his articles as much for his blood pressure as to maintain the peace. And several of our most respected regulars in the comments have made the same point.
In his article Britain is a developing country [4] this week, Sam Bowman marshals a few salutary facts:
- By GDP per capita, adjusted for purchasing power, the US ($76,399) is 39% richer than the UK ($54,603). [5] GDP growth since 2010 has been 47% faster – nine percentage points – in the United States (28% growth) than the UK (19% growth), despite being from a much higher level.
- By productivity, or how much we produce per hour worked, the US was 38% more productive than the UK [6] (UK $54.3/hour, USA $73.7/hour) in 2019.
- France / Germany were much closer to the US than to the UK at $69/hour.
- Between 2010 and 2019, productivity growth was twice as fast in the US (8% growth) as the UK (4% growth).
- Americans could stop working each year on September 22nd and they’d still be richer than Britons working for the whole year.
- Or, as Mike Bird pointed out [7], a car wash manager at an Alabama Buc-ees, a chain of gas stations and grocery stores, earns more ($125k/year) than THREE median UK salaries.
- The average starting salary for a newly-qualified nurse in the US is over £42,000, compared to only £27,000 in most of England, and the gap only widens as their careers progress.
- UK real disposable incomes are not forecast to return to 2021 levels until 2027 [8].
Read Bowman’s piece to hear what he thinks we should be doing it about Britain’s semi-stagnation.
Spoiler alert: it’s nothing like what we have been doing for the past seven years.
Anglosceptics anonymous
I don’t agree with all that ex-Adam Smith Institute director Bowman writes, though his dour prognosis on the economic consequences of Brexit in 2017 [9] pretty much mirrored mine.
In particular I’m more concerned about the consequences of fossil fuel burning than he appears to be here, though I seem to recall he sees cheaper energy today as a faster path to us being rich enough to afford a renewable grid. (I might be misremembering).
Also Bowman’s bullet point drive-by comparison would be even deadlier if it didn’t focus so much on the US. The 20th Century was the American Century. With its tech company dominance over the past 25 years, who’s to say the 21st won’t be too? It’s an unrealistic benchmark for Britain.
Still, it’s refreshing to read a right-of-centre summary that mostly describes Britain in 2023 as I would. Seemingly ex-growth, [10] in the jargon of stockpickers, and possibly a value trap.1 [11]
Things can always get better. But change starts with admitting that we – especially the young [12] – have a problem.
Have a great weekend!
From Monevator
Best global tracker funds – Monevator [13]
Old dog, old tricks – Monevator [12]
From the archive-ator: It’s too late to get into buy-to-let – Monevator [14]
News
Note: Some links are Google search results – in PC/desktop view click through to read the article. Try privacy/incognito mode to avoid cookies. Consider subscribing to sites you visit a lot.
UK inflation slid to 7.9% in June, below expectations – CNBC [15]
Interest rates forecast to rise less sharply following inflation drop – Guardian [16]
Government plans to scrap income tax benefits for inherited pensions [Search result] – FT [17]
Private rents outside London have risen by one-third in four years – Guardian [18]
User satisfaction with Financial Ombudsman falls as delays mount – Which [19]
UK watchdog proposes tougher rules on ‘finfluencers’ [Search result] – FT [20]
iMessage and FaceTime could be withdrawn from UK over law change – Guardian [21]
Strike dates for July / August: when to avoid traveling or expect delays – Which [22]
“Brexit to blame” says a cycle distributor shutting up shop – Cycling Weekly [23]
[24]Index funds may be riskier than you think – Morningstar [25]
Products and services
Natwest launches two best buy cash ISA deals – This Is Money [26]
What the new bank account closure rules mean for UK customers… – Guardian [27]
…and how your bank could shutdown your financial life – Which [28]
Transfer your SIPP to Interactive Investor in July and get from £100 to £3,000 in cashback, plus pay no SIPP fee for six months. Terms apply – Interactive Investor [29]
Owners of Centre Point flats tell of distress at £240,000 repair bills – Guardian [30]
Do you really need travel insurance? – Be Clever With Your Cash [31]
Open an account with low-cost platform InvestEngine via our link [32] and get £25 when you invest at least £100 (T&Cs apply. Capital at risk) – InvestEngine [32]
Annuities look sexy again: should Barbie buy one at 64? [Search result] – FT [33]
Homes for sale near UK beaches, in pictures – Guardian [34]
Comment and opinion
Larry Swedroe: the extreme cost of active management – Wealth Management [35]
You missed it – This Is The Top [36]
The problem with valuation – Of Dollars and Data [37]
How to get rich in the markets – The Big Picture [38]
What drives investor behaviour? – Humble Dollar [39]
The soul-sucking danger of comparison in personal finance – Forbes [40]
Five career-related changes of mind – Young Money [41]
Getting the investing basics right – Morningstar [42]
Yet another 4% rule remix – Humble Dollar [43]
Replicating investment strategies with the S&P 500 and cash – Finominal [44]
What a writer [Makes Monevator look like Hemingway] – Klement on Investing [45]
Naughty corner: Active antics
Time to come home to UK equities – Temple Bar [46] [UK equity fund manager]
Market resilience or investors in denial? – Musings on Markets [47]
Does concentration in a fund improve performance? – Alpha Architect [48]
Venture capital engages in predatory pricing – Business Insider [49]
US ‘night return’ factor ETFs have bombed, will close – Wealth Management [50]
Kindle book bargains
Money Men by Dan McCrum [On the Wirecard fraud] – £2.99 on Kindle [51]
The Ride of a Lifetime by Bob Iger – £0.99 on Kindle [52]
How to Own the World by Andrew Craig – £0.99 on Kindle [53]
Environmental factors
‘Facekinis’ become popular in China as temperatures soar – Guardian [54]
The problem with boating’s high-fibreglass diet – Hakai Magazine [55]
Rampant heatwaves threaten food security of the entire planet – Guardian [56]
Robot overlord roundup
Hollywood actors say strike is a battle for rights amid AI’s rise – Axios [57]
How will AI affect investing? – Morningstar [58]
Off our beat
How your house makes you miserable – Culture Study [59] [h/t Abnormal Returns [60]]
Seven Japanese concepts that can improve your life – Art of Manliness [61]
Rich and anonymous – Morgan Housel [62]
Some favourite stretches of coastline from around the UK – Guardian [63]
Sperm fever: declining wrigglers are becoming big business – New York Mag [64]
Winter is coming – Klement on Investing [65]
The best days are ahead – We’re Gonna Get The Bastards [66]
And finally…
“While catching up on the news is merely depressing to the citizen who has no stocks, it is a dangerous habit for the investor.”
– Peter Lynch, Beating the Street [67]
Like these links? Subscribe [68] to get them every Friday. Note this article includes affiliate links, such as from Amazon [69] and Interactive Investor [29].
- I mean big picture Britain here, not the London stock market. Despite a little bounce over the past few days on lower inflation and a weaker pound, for the very little it’s worth I agree with those who think the UK market looks relatively cheap. [↩ [74]]