UK on Brink of Catastrophic Economic Collapse

The United Kingdom is facing an unprecedented economic crisis, according to Neil Record, former principal economist of the Bank of England. With enormous public debt, Britain is exposed to its international creditors and could be on the brink of a catastrophic collapse.

Record warns that five critical stages separate British society and economy from absolute collapse. The first stage begins with an oil price shock, such as Saudi Arabia cutting or halting its oil exports due to an attack by Iran. This would cause oil prices to surge to $150 per barrel, leading to inflation in the UK reaching 6% within a few months.

The government's response would be to raise taxes and increase welfare spending, but this would lead to bond market panic, with yields on 10-year gilts surging to 9%. Existing holders of gilts would suffer heavy capital losses, around 30%.