— This is the script of CNBC's financial news report for China's CCTV on October 19, 2022.
Strikes in the UK have been spreading across a growing number of industries.
As the dispute between rail unions and train operating companies continues, the RMT has announced two new strike dates in October and November.
RMT (The National Union of Rail, Maritime and Transport Workers) represents 83,000 employees in Britain's major transport industries, just recently announced two new strike actions in October and November. And at the port of Liverpool, a major British port, the United Workers Union announced that 600 employees will be on a new walkout strike between October 24 and November 7. And just before that, on October 11th to 17th, they just ended the last round of strikes.
British postal service Royal Mail said in early October that it may lay off 6,000 workers and warned of major losses this year. Royal Mail blamed a number of earlier strikes, as well as a decline in parcel delivery business.
According to an indicative poll of 4,100 members in 77 sixth form colleges, 85 per cent of respondents backed strike action.
Many other industries, such as telecommunications, logistics and distribution, legal services, etc., have various strikes in progress or in the planning process. The reasons behind these strikes are all focused on wage increases that do not run up against inflation.
Francis O'Grady, general secretary of the British Trades Union Congress, recently spoke in Brighton at the annual gathering. Using official data and Bank of England forecasts for inflation and wage growth, the union estimates that since 2008, the average worker has lost £24,000 in real terms as a result of lagging pay growth, and this amount is predicted to increase by £4,000 during the next three years.
More and more employees are demanding that pay rises match inflation. Keep in mind that inflation in the UK has topped double digits since the beginning of the year. As a way of solving the inflationary pressure, the Truss government initially offered tax cuts and energy bailout programs in order to help people. However, the market criticized the policy for treating the symptoms rather than the underlying cause because of its inaction on demand and neglect of the government's debt capacity.
It is worth noting that the newly appointed Chancellor of the Exchequer Jeremy Hunt's U-turn in the government's fiscal policy did not make the unions feel optimistic. This is because, in order to ease the pressure of the government's fiscal indebtedness, Hunt said he would cut public spending and revise the Energy Bills Support Scheme (EBSS) which means that for ordinary people, the price pressure they face may continue for a longer period of time.
Jon Day
The global bond portfolio manager at Newton Investment Management
"The biggest issue the Bank of England got, and I'm still not sure that 100% aware of this is, how sticky inflation might be. So as I've seen very recently, the labor markets very, very tight wage running over 5% year on year, headline inflation, obviously 10%. But I think more importantly, for me, is what we're looking at underlying inflation, core inflation or, or services inflation."