Nine Black Swans… but a much happier ending

Since the financial crash 18 years ago, nine (9!) ‘Black‑Swan’ events have disrupted, destabilised and damaged the UK economy. No wonder it feels as though the stuffing’s been knocked out of it, and productivity is at a feeble low. Some of these Black Swans were external in origin, others were UK own goals. The lineup is USA 2, Israel 2, Iran 2, Russia 1, China 1, Climate Change 1… and UK 3. The term, Black Swan, was coined to describe unpredictable, very infrequent low-probability, high-impact events, so we should probably look for a new description for these increasingly frequent, extremely disruptive occurrences.

They certainly catch us unaware and unprepared. But arguably they are not all unpredictable, and some should be on our constant watch lists, if only because the more frequent Black Swan events have become, the more destabilising and damaging they are.

Economists argue which event had the greatest effect on our economy, and some argue for dropping one or two and including others but, in our view, (a) these nine have been the most damaging and (b) a happier ending is in prospect…

1. Austerity 2010 (Origin UK) following the 2007-9 financial crash (Origin USA)

The financial crash hit Britain hard through its financial and banking sectors. A government bailout stopped a systemic banking collapse but left persistent scarring in output, productivity and living standards. However, Chancellor George’s Osborne 2010 austerity measures to deal with its effects have left a damaging legacy from cumulative cuts to Britain’s deteriorating infrastructure and public services. The cuts were summed up at the time by The Guardian as ‘pain now, more pain later’.

Infrastructure investment delayed or maintenance skimped, always costs more in the long run. Cuts to services are rarely made good later and lower levels of service become the norm. Over 15 years or so, austerity has triggered a downward spiral until, most roads have potholes, the courts are clogged, we have a lack of midwives, and planning departments are always short of planners - which contributes to the housing crisis.

2.The 2020 pandemic and 2021-2022 aftermath (Origin China)

The arrival of COVID‑19 in early 2020 triggered lockdowns that halted large parts of the UK economy, produced one of the sharpest market corrections in modern history and sent government debt soaring. It left scars in public services, travel and hospitality and majorly disrupted education.

Lockdowns boosted working from home, creating a home improvement and online buying spike in demand for products to improve living space, convenience, comfort and appearance in the home. That mass synchronisation sent demand and prices soaring in 2021, overwhelming the capacity of the supply chain through 2022. 

The pandemic exposed the fragility of the global supply‑chain and undermined the just in time model, with the risks of concentration (e.g. pharmaceutical active ingredients from China and India) – demonstrating how a single vendor or platform failure can cascade across industries and public services in the UK.

3. An accidental blocking of the Suez Canal (Origin Climate Change)

The container ship Ever Given became wedged diagonally in the Suez Canal for six days in May 2021. It was then impounded by the Suez Canal Authority until early July as the authority sought compensation from the ship’s owners, for damage to the canal, salvage operations and lost revenue.

The huge ship ran aground in unusually strong winds that exceeded 40 knots (74 km/h; 46 mph). The canal varies in depth, especially near the banks, and when the wind caught the large flat surface of the containers stacked on the vessel it forced it into the bank and ran aground, blocking the canal for six days.

The blockage trapped $700 million of cargo but it also resulted in $60 billion of disrupted trade. Analysing the causes which led to their very large insurance payouts, the insurance industry blamed climate change, as they did when they had to payout when low water levels in the Panama Canal and Rhine made these trade corridors impassable.

A blockage of any global trade corridor or chokepoint can have a significant influence on supply, but second and third order affects including insurance can be massive. ‘Just in time’ efficiency is the enemy of supply chain resilience.

4.War in Ukraine (Origin Russia)

The Russian invasion of Ukraine in 2022 sent energy and commodity prices sharply higher, feeding inflation and contributing to large energy price shocks that continue to strain households’ and public finances across Europe, with direct consequences for UK inflation and the economy.

Five years of war have hardly moved the battlelines, but casualties on both sides have soared. The nature of war has changed fundamentally too as semi-autonomous drones and AI have taken over. The war and President Trump’s alienating antics have strained the NATO alliance and persuaded Europe to raise its defence spending. Europe is slowly adapting to life without a reliable US and working out how to deal with hybrid warfare and the risks of physical war.

5. The mini budget that spooked bond markets (Origin UK)

Chancellor Kwasi Kwarteng’s and Prime Minister Liz Truss’ 2022 Growth Plan and ‘mini budget’ panicked financial markets. They pledged £45bn of unfunded tax cuts, without Office of Budget Responsibility backing, spoke dismissively of the Treasury, and sidelined the Bank of England.

Their poorly communicated change of direction, an abrupt break from fiscal orthodoxy, spooked the markets and the media and sent gilt yields and sterling the wrong way. Chancellor Kwarteng was sacked, and the new Chancellor Jeremy Hunt, reversed most of the announced tax cuts. Liz Truss had to resign after just 49 days in office. Swift action by Jeremy Hunt and the Bank of England contained severe financial damage, but the bad news is it reinforced fiscal orthodoxy. Right or wrong, it has blocked sensible reform and inhibited the Labour Government.

6. Houthi rebels attack ships in the Red Sea 2023-2024 (Origin Israel and Iran)

In response to Israel’s attacks on Gaza, the Houthis, one of Iran’s proxies, attacked shipping they associated with Israel in the Red Sea trade corridor. This blocked the Red Sea and the Suez Canal, diverting shipping thousands of nautical miles around the Cape of Good Hope, adding three to four weeks and enormous costs to Europe-Asia container trade.

7. Trump’s ‘Liberation Day’tariffs (Origin US)

President Trump’s tariffs, announced April 2025, imposed a universal 10% import duty plus higher, country‑specific ‘reciprocal’ levies aimed at penalising trading partners for bilateral goods deficits, and allegedly to raise revenue for tax cuts and reindustrialisation. A Supreme Court ruling in February 2026 that the administration lacked the authority to impose most of the tariffs came too late to undo the damage.

Markets plunged after the announcement and volatility continued as the White House threatened and relented, and trading partners accepted, negotiated or retaliated in kind. Continuing yoyos sent world trade, and the world, into a spin.

Trump’s tariffs were the largest, most aggressive unilateral U.S. trade onslaught in modern history creating extensive turmoil and disruption. The jury’s out on whether they are addressing the notional imbalance (services are excluded). The logic and mathematics are more than slightly nutty and seem to be mainly dressing for a revenue grab. But they and other erratic Presidential behaviours have confused and alienated US allies and trading partners. The trade and financial attacks by an erstwhile ‘friend’ are damaging trust in the US, even if the economic effects to both sides and realignments play out over decades rather than months.

8. The 2026 Middle East War (Origin Israel and US, plus Iran retaliation)

The war was started by Israel bouncing the US into attacking Iran. Israel and the US expected it to be all over in a couple of weeks. With the Straits of Hormuz, Iran retains a chokehold on 20% of the global oil and gas supply. It’s an important supplier of nitrogen and phosphate fertilisers too, on which much of the developing world’s food supply relies. It’s also an important producer of aluminium and helium.

Significant amounts of oil and gas capacity and infrastructure in Iran, the Gulf states and Saudia Arabia have been destroyed or are out of action. Regardless of the outcome of the peace talks, repairing or replacing it will take months not weeks and some could take years. As a big gas and oil importer, the UK is especially vulnerable to inflation and energy and other shortages.

Israel and the US have let a bad genie out of the bottle. Let’s hope they can get it back in before it does serious harm to the world economy.

9. Brexit - a shock that amplified economic austerity (Origin UK)

Britain formally exited the EU in 2020, but the fractious post-Brexit transition and new trading arrangements failed to lift UK output or trade. ‘Remain’ economists argue that leaving the EU created enormous, lasting damage; ‘Leave’ economists that the cumulative damage was done by the financial crash-by the cumulative effects of austerity post 2010 which Brexit hasn’t yet fixed. Either way, and both sets of economists agree on this, the diverging gap between the pre financial crash rate of reasonably vigorous growth, and the insipid just-about-growth of the last 15 years is massive and increasing.

Most, if not all, of the important things Britain needs to be investing in today could have been funded without stretch if the UK had continued to grow at its previous unexceptional rate. Regrettably, even if the EU were to invite Britain to rejoin at no cost and a government said yes, it would not fix our current problems or raise our growth rates to fund them. The EU has its own serious problems, and lost time is lost forever.

10. A bright ray of sunshine and happier ending… ‘Despite Brexit’ (Origin UK)

Having experienced nine Black Swans since the financial crash, several of which were in the last six years, we can expect several more in the years to come. But there’s a happier ending in view, according to Paul Hetherington, Non-Executive Chairman at IBC and IPG buying groups, and Non-Executive Director at BRE Group.

We can expect more Black Swans to knock us off course. But there’s a happier end in view, according to Paul Hetherington, Non-Executive Chairman at IBC and IPG buying groups, and Non-Executive Director at BRE Group.

As Paul has highlighted (in his ‘Despite Brexit’ April 2026 article), the headlines of the latest International Monetary Fund published World Economic Outlook were predictably gloomy. UK growth downgraded, harder hit than other major economies. Doom, gloom, the usual.

But buried in the data Paul saw a different story. The UK is again the world’s 5th largest economy. Ahead of India, a trillion dollars ahead of France, and the IMF projects we’ll overtake Japan by 2029. And if current trends continue, the UK could become Europe’s largest economy by around 2040, passing Germany. Despite Brexit. Despite the doom-mongers.

Why? Global exports of goods have fallen as a share of world output since 2008 (from 24% to 21%) while global exports of services have climbed from 6% to 8% of world GDP, and that trend is accelerating. Which plays directly to Britain’s strengths: 59% of UK exports are now services not goods. That’s the highest proportion of any major economy, second only to the US in absolute terms.

‘Can we source or make it cheaper?’ is a race to the bottom, but the services economy is a fundamentally different game. The competitive conversation is about trust. Can we be more trusted? More expert? More reliable? More sophisticated? That’s a race to the top. And it’s one that British businesses are extraordinarily well-positioned to win. The wind is at our backs, says Paul. The question is whether we are smart enough - and brave enough - to set the right sails. The shift from goods to services trade is the biggest structural tailwind the UK has had in decades. And It’s happening despite - not because of - anything our politicians have done.

Thanks to Paul Hetherington. His full LinkedIn article is available here: The Owl’s View ‘Despite Brexit’ (21st April 2026).

A call to action!

If it feels hard going, that’s because markets and demand are getting knocked back and destabilised by the next Black Swan before they can get back to their feet again and build momentum.

Markets were starting to rebound in 2024. Confidence was improving and sales were starting to recover. But the public had had enough and voted for the promise of change from a new face in Government. Labour’s election manifesto and pledge to put housing and growth first hit the sweet spot. But when Labour won, it wasn’t prepared, didn’t know how to achieve its pledges.

Hardly any Ministers had run anything or had experience of Government and the Prime Minister left delivering his pledges to them and the civil service. Ministers did not understand that a promise or target of building 1.5 million homes in this parliament was just a wish without an engine. Labour quickly reverted to distributing wealth before creating it and didn’t understand the difference between saying and doing. Confidence that Labour can do it has leaked away, and Britain is a long way off from getting the clear direction and stability it needs.

What have we learned in the last 15 years?

That we can’t rely on a government of any party, however well-intentioned, to successfully tackle Britain’s problems. Government has the power to remove barriers to business, and we should certainly try to influence the Government to support industry and steer markets in the right direction. But, it’s no use depending on Government or waiting for it to solve our problems. Our future is in our hands. 

We need to follow the money and create our own demand. There is a MASSIVE potential market of 29 million homes that need upgrading now for tomorrow’s climate. Today’s windows and doors, for example, aren’t rotting or falling out, as they once were, but Britain has the oldest, worst insulated homes in Europe. A large chunk of the increasingly expensive energy we buy (individually and as a country) leaks straight out of our homes. Every year, waste on a prodigious scale! The energy performance of most homes is substantially substandard, and we can’t afford to keep on importing gas and oil we don’t need, and homeowners need help to upgrade their properties.

In the late 1970s and 1980s when the replacement window industry took off, an older generation of installers crusaded with missionary zeal to help homeowners improve their homes. They didn’t get much help from Government then, and they didn’t need or expect it. They found ways to get the message across to receptive home and property owners who were looking for ways to upgrade their windows and doors, save money, and improve the comfort of their homes. In a steadily changing climate - nine out the last ten years have been the warmest on record - our homes need much better insulation to keep us comfortable, warmer in the winter and cooler in the summer.

When an army of passionate believers set out to spread the word that they had a low maintenance improvement solution in the 1980s, the replacement window and door industry grew explosively because there was a real need. There is a real need now, and it can do it again if, instead of waiting for a call, an army of believers sets out to help homeowners upgrade their homes. The solution is in what we say and is in our own hands.  

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