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Workers at port of Felixstowe to hold eight-day strike in pay dispute – business live | Business

Felixstowe port workers to strike for eight days from August 21

The Port of Felixstowe in Suffolk Photograph: Gareth Fuller/PA

Dockers at the UK’s largest container port, in Felixstowe, are to hold an eight-day strike from 21st August, in a pay dispute.

The Unite union has announced the dates for the strike action, saying the Felixstowe Dock and Railway Company had failed to make an acceptable pay offer.

Over 1,900 workers who are members of Unite will take part in the strike action, from 21st to 29th August, the union says.

The move is the latest blow to efforts by ministers to contain a wave of industrial unrest sparked by the cost of living crisis.

Workers at the port of Felixstowe in Suffolk balloted 92% in favour of a strike last month after they were offered a below-inflation pay rise by the Felixstowe Dock and Railway Company.

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Further talks are scheduled to take place at Acas next Monday, Unite adds, so there’s still a chance that the Felixstowe strike action is averted.

Unite national office for docks Bobby Morton says:

“Strike action will cause huge disruption and will generate massive shockwaves throughout the UK’s supply chain, but this dispute is entirely of the company’s own making. It has had every opportunity make our members a fair offer but has chosen not to do so.

“Felixstowe needs to stop prevaricating and make a pay offer which meets our members’ expectations.”

The Unite members who work at Felixstowe undertake a wide range of roles, including crane drivers, machine operators and stevedores.

An eight-day strike at the port of Felixstowe could cause significant disruption to UK supply chains.

Felixstowe handles about 40% of containers entering and leaving the UK, so delays unloading goods could cause a ripple effect through the economy.

My colleague Joanna Partridge explained last month:

Felixstowe handles about 45,000 containers each week, with freight including clothing, consumer goods and manufacturing components.

The Unite strike is timed to coincide with an increase in traffic: the number of containers begins to rise from August, as retailers bring over more goods, particularly from the far east, to start filling their warehouses before Christmas.

Unite says that talks at Acas “failed to reach a satisfactory conclusion” yesterday, after the Felixstowe Dock and Railway Company didn’t improve on an offer of a 7% pay increase.

That is significantly below the RPI inflation rate of 11.8%, Unite points out.

Unite general secretary Sharon Graham said:

“Both Felixstowe docks and its parent company CK Hutchison Holding Ltd are both massively profitable and incredibly wealthy. They are fully able to pay the workforce a fair day’s pay.

“The company has prioritised delivering multi-million pound dividends rather than paying its workers a decent wage.

“Unite is entirely focused on enhancing its members’ jobs, pay and conditions and it will be giving the workers at Felixstowe its complete support until this dispute is resolved and a decent pay increase is secured.”

Felixstowe port workers to strike for eight days from August 21

The Port of Felixstowe in Suffolk
The Port of Felixstowe in Suffolk Photograph: Gareth Fuller/PA

Dockers at the UK’s largest container port, in Felixstowe, are to hold an eight-day strike from 21st August, in a pay dispute.

The Unite union has announced the dates for the strike action, saying the Felixstowe Dock and Railway Company had failed to make an acceptable pay offer.

Over 1,900 workers who are members of Unite will take part in the strike action, from 21st to 29th August, the union says.

The move is the latest blow to efforts by ministers to contain a wave of industrial unrest sparked by the cost of living crisis.

Workers at the port of Felixstowe in Suffolk balloted 92% in favour of a strike last month after they were offered a below-inflation pay rise by the Felixstowe Dock and Railway Company.

The US dollar has strengthened sharply after today’s stronger-than-forecast jobs report.

It’s knocked the pound down by a cent, to $1.2020, the lowest in over a week.

CBI chief Tony Danker also put his finger on one problem pushing up inflation — shortages of workers.

Danker said “labour shortages is probably the number one issue facing businesses today”, as it holds back growth and also leads to wage pressures.

“I think we need to start, as a country, getting serious about how we solve labour shortages.”

Vacancies at UK firms have soared to record highs in recent months, with firms across the economy struggling to hire staff.

Several factors are to blame – some older workers have left the workforce altogether; long Covid has driven up sickness rates, and Brexit has hit the pool of EU workers which some firms, such as easyJet, relied on.

CBI fears vacuum until next UK PM starts

Back in the UK, CBI director general Tony Danker said he fears a vacuum until the next prime minister is chosen.

Danker, whose organisation represents UK businesses, says “we cannot wait until September 5 for action” to tackle the economic crisis, as Kwasi Kwarteng says will happen.

PA Media have the details:

Danker was speaking on BBC Radio 4’s World at One programme and was asked about the Prime Minister and Chancellor being on holiday while the economic crisis looms.

Mr Danker said:

“I have no problem with people having short holidays. My fear is much more profound, which is that there will be a vacuum from now until September 5.

“We need the current Prime Minister and the current Chancellor to fill that vacuum. We need them to make decisions. We need them to make plans. We need them to reassure firms, markets and households that we are gripping this.

“We cannot wait until September 5 for action. We cannot wait until September 5 for plans and we cannot wait until September 5 for reassurance.”

He added that ministers need to prepare interventions for when Ofgem announce the energy price cap rise later this month:

“They need to be signalling that the Government has a response and an answer. And they need to be setting out growth plans and growth intentions now.”

US jobs market recovers to pre-pandemic levels

Well, this is A Moment, and a welcome one too amid the economic gloom.

Both US nonfarm employment and the US unemployment rate have returned to their February 2020 pre-pandemic levels, today’s jobs report shows.

It only took 27 months for US economy to recoup its pre-pandemic level of employment & unemployment rate. A historic feat in the wake of one of the most brutal shocks on record

“Total nonfarm employment & the unemployment
rate have returned to their Feb 2020 pre-pandemic levels”

— Gregory Daco (@GregDaco) August 5, 2022

Our US business editor Dominic Rushe reports:

The US added 528,000 jobs in July as the unemployment rate edged down to 3.5%, in a stronger than expected report.

Economists had been expecting jobs growth to slow in July and the latest figures from the labor department were far stronger than the average 388,000 jobs gained over the last four months.

Job growth was widespread, led by gains in leisure and hospitality, professional and business services, and healthcare.

Meanwhile in the US, July was a much stronger month for job creation than expected.

The US Non-Farm Payroll, which measures employment across the US, shows there were 528,000 new jobs created last month, beating forecasts of a slowdown to 250,000.

The US unemployment rate actually dropped to 3.5%, with widespread job gains across leisure and hospitality, professional and business services, and health care — even though the US is technically in recession.

Wage growth was also stronger than forecast, with average hourly earnings up 0.5% in the month.

That’s an encouraging sign for the US economy… but it also means the US Federal Reserve is likely to keep raising interest rates sharply to squeeze out inflation.

Stock markets have dropped in Europe, as have Wall Street futures, as a result.

Blowout US NFP number at +528K. So… The Fed has more room to do more? Fed’s role is to fight inflation, and this isn’t an inflation reading… But it does signal that the job market is still tight, and that they have a cushion on the employment front to push rates higher. #nfp

— Philip Ng (@philip_ng) August 5, 2022

Despite the painful squeeze already being felt by millions, there’s no sign of immediate support from the government.

UK business secretary, Kwasi Kwarteng, has admitted it will be more than a month before ministers can introduce any measures to tackle the rising cost of living.

Kwarteng, who is backing the foreign secretary, Liz Truss, to become the next leader of the Conservative party, said he was expecting a a new prime minister to introduce a “support package” in an emergency budget but it could not happen until after they start work next month.

Here’s the story, by my colleague Emily Duggan:

The news that sixteen million people have cut back on food and essentials shows that households are already taking “difficult decisions”, says Laura Suter, head of personal finance at AJ Bell.

Suter explains (via Sky News):

“The cost of living crunch means certain groups feel the pinch more than others. Disabled people are more likely to have to cut back on food and essentials, as are people living in deprived areas.

“Those renting are also more likely to have slashed their spending, with many citing rising housing costs as one of the key factors contributing to their rising living costs.

However, as more homeowners come off their cheap fixed rate mortgages and roll on to pricier deals we’ll likely see them feel the crunch more too.”

Deprived households cut back the most

The ONS’s cost of living survey also shows clearly that the most poorest households are suffering more than wealthier ones.

Those in the most deprived areas were more likely to have reduced spending on food and essentials.

The ONS says:

Among those who had seen cost of living increases, those living in the most deprived fifth of areas in England were more likely to have cut back on food and essentials (42%) than average (35%).

Meanwhile, those in the least deprived fifth of areas were less likely (27%).

Cutting electricity and gas use was more common than average among those who were earning between £10,000 and £15,000 per year (56%), and less common among those earning more than £50,000 per year (44%).

Those living in the most deprived areas more likely to be using credit too — at 18%, compared with just 8% of those living in the least deprived areas.

Also, those living in rented housing whose cost of living had gone up were more likely to have reduced their spending on food and essentials (46%) than those who own their homes outright (27%) or are paying off a mortgage (33%)

Matt Whittaker of Pro Bono Economics has tweeted the key findings, and says it shows the need for targeted support.

More from the deeper @ONS dive into household experiences of the cost of living crisis here. Clear that this is a broadly felt squeeze, but one that is significantly tighter for some. Means our response needs to be large, but also targeted https://t.co/H3Z1eTz4CW pic.twitter.com/KblmZtYE6n

— Matt Whittaker (@MattWhittakerPB) August 5, 2022

The cost of living squeeze is having a devastating impact on disabled people, warns Scope, the disability equality charity, even before the energy price surge this winter.

Tom Marsland, policy manager at Scope, says today’s ONS’s Cost of Living survey highlights the need for more support:

“These stark findings show millions have already had to cut back, with disabled people hardest hit – even before October’s terrifying energy price hikes have come into force.

“Scope has been inundated with calls from disabled people who have been forced to make dire cutbacks on personal care, hygiene, food and energy because of rampaging inflation.

“This is having a devastating impact on disabled people’s lives, and the support from government just won’t touch the side.

“Life costs more if you’re disabled, which is why the government must get more financial support to disabled people now, to stop millions being pushed deeper into destitution.”

Around 9 in 10 (89%) people continued to see an increase in their cost of living in the week 20 to 31 July 2022 – or around 46 million of us – according to the latest data from our Opinions and Lifestyle Survey https://t.co/shq38M8EXy

— Office for National Statistics (ONS) (@ONS) August 5, 2022

Today’s ONS reports shows that disabled people were more likely than non-disabled people to have reduced their spending on food and essentials because of their increased costs of living (42%, compared with 31%).

Mark Sweney

Mark Sweney

WPP’s logo
Photograph: Simon Dawson/Reuters

In the City, shares in advertising giant WPP have slumped more than 7% after investors reacted to concerns over the strength of the ad market next year as the global economy weakens.

The London-based marketing services giant is the top faller on the FTSE 100, with more than £700m wiped off its market value, despite beating analyst consensus for performance in the second quarter and joining peers in raising full year targets.

WPP reported organic revenue growth of 8.2% in the second quarter – well ahead of City expectations of 5.5% growth. The company reported double digit revenue growth in the US, the world’s largest ad market, and Germany in the second quarter with the UK growing at 6.2%.

The strong performance prompted the company to raise its underlying growth forecast for this year by 0.5% to a range of 6% to 7%, similar to US rivals Omnicom and Interpublic and France’s Publicis which have already reported solid results.

However, Mark Read, the chief executive of WPP, admitted that there is a “more uncertain economic environment ahead” in 2023.

WPP said it was “confident” of sticking to its target of organic revenue growth of 3-4% and headline operating profit margin of 15.5-16% next year, but said it would not confirm official guidance for 2023 until February.

Investors are taking this unwillingness to give a concrete forecast as a potential sign that the market could weaken, sending WPP’s shares down more than 7%. The company’s shares are down 14% in the last year.

Thomas Singlehurst, analyst at Citi, says:

“There is a lot of scepticism out there over the outlook for the advertising sector.

Full story: Workers asking for pay rises risk embedding inflation, says Bank boss

Mark Sweney

Mark Sweney

Workers should refrain from asking for inflation-matching pay rises, according to the governor of the Bank of England, who warned there was a risk of inflation becoming “embedded”.

Andrew Bailey, who added that he does not expect interest rates to settle at pre-financial crisis levels of about 5%, refused to be drawn on what an appropriate pay rise would be, a day after he warned inflation would hit 13% in October. The Bank’s inflation target is 2%.

“If everybody tries to beat inflation – and that is in both price-setting and wage-setting – it doesn’t come down, it gets worse,” he said, speaking to BBC Radio 4’s Today programme on Friday.

“My key point is, if inflation becomes embedded and persistent, it gets worse. And the effects get worse.”

The UK is embroiled in a summer of strikes by workers in industries from rail and aviation to post and telecommunications as unions attempt to secure increases to allow members to keep wages in line with inflation levels running at a 40-year high.

More here:

Households have been warned that the average energy bill could climb to nearly £4,000 a year from January, higher than some previous forecasts.

Auxilione, a small energy consultancy, has predicted that the energy price cap in Great Britain will be lifted to £3,488 per year from October, and then against to £3,994 at the quarterly change in January 2023.

Predictions for January are still uncertain as there are more than three months left until the price is decided.

October’s prediction is likely to be more accurate (Ofgem should release the new price cap later this month – it’s currently £1,971 per year).

The research firm Cornwall Insight, who have a good track record on the price cap, predicted earlier this week it could hit £3,615 a year from January.

Last month BFY, a management consultancy, predicted a typical energy bill could reach £3,850 a year by January.

The important issue is that the government’s existing package of support will be inadequate for struggling households, as Resolution Foundation warned (see opening post).

What do today’s @bankofengland announcements mean for households? Average real post-tax household incomes are expected to fall by around £2,000 across this year and next. The Government will inevitably need to do more to shield families from the worst effects of this crisis. pic.twitter.com/NN1AxQ5152

— Resolution Foundation (@resfoundation) August 4, 2022

It’s become clear this week that Andrew Bailey and Liz Truss have very different views about how to handle inflation and the economic crisis.

That suggest there could be significant tensions between Downing Street (should Truss beat Rishi Sunak) and Threadneedle Street as the economy slides into recession – a situation where you want monetary and fiscal policymakers to work together.

Particularly with some newspapers (notably today’s Daily Mail) blaming Bailey for not reacting faster last year.

ITV News’s Joel Hills sums up the situation:

Andrew Bailey is from Mars, Liz Truss is from Venus.

The Bank of England’s narrative about why inflation is high and rising and how it can be tamed appears to be very different to that of the current favourite to become the next PM.

This is a little concerning… 🧵

— Joel Hills (@ITVJoel) August 5, 2022

The Bank argues that inflation will hit 13% in October largely because Vladimir Putin has caused energy prices to spike to dizzying, astonishing, ruinous levels and that this is something it is powerless to prevent.

— Joel Hills (@ITVJoel) August 5, 2022

The Bank calculates that for it to have kept inflation anchored at 2% in the last year it would have had to 1) anticipated the Russian invasion of Ukraine and 2) raised interest rates “miles into double digits”, creating an even bigger recession than the one we now face.

— Joel Hills (@ITVJoel) August 5, 2022

The Team Truss take is different. They argue the Bank is in part to blame for spiralling prices, suggesting its failure to act earlier and more decisively by raising interest rates means the cost of borrowing will now have to increase by more than it otherwise would have done.

— Joel Hills (@ITVJoel) August 5, 2022

The Daily Mail shares this opinion.

The Bank believes the worst cost of living squeeze for 60 years (driven by runaway prices not tax rises) will knock such a huge hole in the disposable incomes of UK households and firms that a recession of some description is now inevitable.

— Joel Hills (@ITVJoel) August 5, 2022

The Bank is raising interest rates – and in doing so will intensify the squeeze – because it says it sees signs that inflation is starting to feed itself domestically and it needs purging. A downturn and higher unemployment are regrettable but necessary consequences.

— Joel Hills (@ITVJoel) August 5, 2022

Liz Truss claims a recession can be averted. She blames Rishi Sunak’s tax rises for sagging economic growth and argues that if she becomes prime minister growth can be revived by the immediate implementation of a package of tax cuts worth more than £30 billion.

— Joel Hills (@ITVJoel) August 5, 2022

If the Bank is right then rampant inflation + looming recession will make tax cuts much harder to deliver. Indeed, the next PM will likely have to prioritise greater spending on yet more financial support for struggling households and vital public services like the NHS.

— Joel Hills (@ITVJoel) August 5, 2022

Bailey and Truss appear to have two very different world views. Regardless of which one you find most credible, it’s hard to see how they can be easily reconciled should Truss win the leadership contest.

In months ahead we really need monetary and fiscal policy in harmony.

— Joel Hills (@ITVJoel) August 5, 2022

Here’s a video clip of business secretary Kwasi Kwarteng criticising the Bank of England’s control of inflation this morning (see earlier post), saying ‘clearly something’s gone wrong’ as inflation heads towards 13%.

‘Something’s gone wrong’: Kwasi Kwarteng criticises Bank of England – video



Workers at port of Felixstowe to hold eight-day strike in pay dispute – business live | Business Source link Workers at port of Felixstowe to hold eight-day strike in pay dispute – business live | Business

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