https://sputnikglobe.com/20231014/is-uk-heading-for-recession-job-market-sends-warning-sign-1114198957.html
Is UK Heading for Recession? Job Market Sends Warning Sign
Is UK Heading for Recession? Job Market Sends Warning Sign
Sputnik International
The Bank of England faces challenges in managing interest rates due to wage inflation concerns, industrial actions in various sectors underscore the widespread impact of economic uncertainty.
2023-10-14T17:07+0000
2023-10-14T17:07+0000
2023-10-14T17:07+0000
economy
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rishi sunak
liz truss
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united kingdom (uk)
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The UK's unemployment rate of 4.3 percent signposts an impending recession, with a climb anticipated in 2024, potentially reaching or surpassing five percent.Once a bustling job market, the UK is suffering setbacks occasioned by its economic woes, which orchestrated the departure of its erstwhile prime minister, Liz Truss, and are also threatening Prime Minister Rishi Sunak.Moreover, the increased rate of the UK's unemployment corroborates the "Sahm rule," sparking unease about recession in the nation's capital. The Nomura analysis, using the Sahm rule, revealed that a spike in the UK's unemployment rate corresponding to the preceding year exceeded that of major Eurozone economies. In sharp contrast, the unemployment rate has only edged up by 0.1 percentage points in both the United States and Germany. France, on the other hand, has witnessed a slightly more pronounced increase of 0.2 percentage points. Notably, Spain and Italy have registered a decline in their unemployment figures.The problems of the UK job market present the possibility of an economic downturn just before the 2024 general election. Sunak has underscored the importance of economic growth as one of his main commitments, especially with the Tories currently trailing behind the Labour Party in polls.The UK’s rising joblessness is viewed favorably by the Bank of England, as they are worried about inflation resulting from steeply rising salaries, despite a series of interest rate hikes, which could potentially lead to wage-price inflation.The BoE has raised interest rates 14 times in a row. This is starting to affect the job market, with surveys showing that wages are not increasing as much. Some experts think the current interest rate of 5.25 percent might be as high as it will go. Deputy Governor Ben Broadbent sees signs of this affecting the economy, especially jobs. Another expert, Swati Dhingra, says there is an equal chance of a recession happening, and she warns that the full impact of the previous rate hikes has not happened yet.Chief European economist at T. Rowe Price, Tomasz Wieladek, suggests that central bankers are leaning towards relying more on survey data than official earnings, which have not yet shown an evident slowdown. Wieladek describes the labor market as historically toggling between tight and loose phases.So far this year, trade unions have mobilized workers from various professions to participate in industrial action.Tube StaffEarlier this month, the RMT union decided to call off the scheduled Tube strikes. The move came after Transport for London (TfL) agreed to retain approximately 200 station jobs, ending the dispute over staff downsizing.DoctorsThe British Medical Association seeks a 35 percent pay increase for junior doctors, citing 15 years of below-inflation raises. The government deems this request unreasonable due to economic constraints. Doctors are set to receive a six percent pay bump this year, with junior doctors gaining an extra £1,250 on average, totaling nearly nine percent.In October, junior doctors and consultants from the BMA staged coordinated strikes on October 2, 3, and 4, with emergency care still provided. Junior doctors voted to extend the strike, and the BMA's industrial action mandate was renewed. Despite an announced six percent pay increase for consultants in July, the BMA argues their take-home pay has fallen by over a third in 14 years.Airport WorkersMembers of Unite, employed by ground-handling firm Red Handling, initiated a four-day strike beginning on August 18, followed by another four-day strike from August 25, impacting the August bank holiday weekend. Additional strikes are anticipated at the end of October, aligning with the half-term break. Baggage workers under Unite are slated for another walkout from October 20 to 30. Red Handling provides ground-handling services for Delta, Norwegian, Norse Atlantic, Saudia, and TAP Air Portugal.University Staff and TeachersUniversity and College Union (UCU) members from 42 universities struck in late September over pay deductions. Some university staff joined the strike last month for similar pay concerns. The Association of School and College Leaders (ASCL) and National Education Union (NEU) unions dropped plans for industrial action after accepting a well-funded pay offer announced mid-July. This included a 6.5 percent rise, as the School Teachers’ Review Body advised.National Association of Schoolmasters Union of Women Teachers (NASUWT) instructed members to follow their working hours from September 18 strictly. While the dispute was settled in Scotland, teachers in Northern Ireland have engaged in non-strike actions since October 2022, along with National Association of Head Teachers (NAHT) members in Wales since February.
https://sputnikglobe.com/20220816/uk-unemployment-rate-in-q2-remains-at-38-office-for-national-statistics-says--1099643553.html
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uk unemployment rate, impending recession, climb, economic woes, liz truss, rishi sunak, sahm rule, claudia sahm, recession start, nomura analysis, eurozone economies, united states, germany, france, spain, italy, job market, economic downturn, general election 2024, economic growth, tories, labour party, george buckley, nomura, bank of england, inflation, interest rates, wage-price inflation, ben broadbent, swati dhingra, recession, rate hikes, t. rowe price, tomasz wieladek, central bankers, survey data, official earnings, trade unions, tube staff, rmt union, transport for london, doctors, british medical association, junior doctors, pay increase, economic constraints, consultants, industrial action, airport workers, unite, red handling, university staff, teachers, university and college union, pay deductions, ascl, neu unions, school teachers’ review body, nasuwt, naht members.
uk unemployment rate, impending recession, climb, economic woes, liz truss, rishi sunak, sahm rule, claudia sahm, recession start, nomura analysis, eurozone economies, united states, germany, france, spain, italy, job market, economic downturn, general election 2024, economic growth, tories, labour party, george buckley, nomura, bank of england, inflation, interest rates, wage-price inflation, ben broadbent, swati dhingra, recession, rate hikes, t. rowe price, tomasz wieladek, central bankers, survey data, official earnings, trade unions, tube staff, rmt union, transport for london, doctors, british medical association, junior doctors, pay increase, economic constraints, consultants, industrial action, airport workers, unite, red handling, university staff, teachers, university and college union, pay deductions, ascl, neu unions, school teachers’ review body, nasuwt, naht members.
The UK's unemployment rate of 4.3 percent signposts an impending recession, with a climb anticipated in 2024, potentially reaching or surpassing five percent.
Once a bustling job market, the UK is suffering setbacks occasioned by its economic woes, which orchestrated the
departure of its erstwhile prime minister, Liz Truss, and are also threatening Prime Minister Rishi Sunak.
Moreover, the increased rate of the UK's unemployment corroborates the "Sahm rule," sparking unease about recession in the nation's capital.
This rule, espoused by economist Claudia Sahm, helps spot the start of a recession. It examines whether the average unemployment rate rises by 0.5 percent over three months compared to the lowest point in the past year. The Sahm rule has been on point at forecasting the US recession during the 1960s and the UK since the mid-1970s. It was slow during the pandemic because of the furlough program and registered two mistakes before the Eurozone debt crisis and the financial downturn.
The Nomura analysis, using the Sahm rule, revealed that a spike in the UK's unemployment rate corresponding to the preceding year exceeded that of major Eurozone economies. In sharp contrast, the unemployment rate has only edged up by 0.1 percentage points in both the United States and Germany. France, on the other hand, has witnessed a slightly more pronounced increase of 0.2 percentage points. Notably, Spain and Italy have registered a decline in their unemployment figures.
The problems of the UK job market present the possibility of an economic downturn just before the 2024 general election. Sunak has underscored the importance of economic growth as one of his main commitments, especially with the Tories currently trailing behind the Labour Party in polls.
“The labor market combined with a lot of other factors, including higher interest rates, a weaker housing market, and high inflation, which is still dampening real wage growth, are all negatives for GDP,” said George Buckley, chief UK economist at Nomura.
The UK’s rising joblessness is viewed favorably by the Bank of England, as they are worried about inflation resulting from steeply rising salaries, despite a series of interest rate hikes, which could potentially lead to wage-price inflation.
The BoE has raised interest rates 14 times in a row. This is starting to affect the job market, with surveys showing that wages are not increasing as much. Some experts think the current interest rate of 5.25 percent might be as high as it will go. Deputy Governor Ben Broadbent sees signs of this affecting the economy, especially jobs. Another expert, Swati Dhingra, says there is an equal chance of a recession happening, and she warns that the full impact of the previous rate hikes has not happened yet.
Chief European economist at T. Rowe Price, Tomasz Wieladek, suggests that central bankers are leaning towards relying more on survey data than official earnings, which have not yet shown an evident slowdown. Wieladek describes the labor market as historically toggling between tight and loose phases.
So far this year, trade unions have mobilized workers from various professions to participate in industrial action.
Earlier this month, the
RMT union decided to call off the scheduled Tube strikes. The move came after Transport for London (TfL) agreed to retain approximately 200 station jobs, ending the dispute over staff downsizing.
16 August 2022, 09:31 GMT
The British Medical Association seeks a 35 percent pay increase for junior doctors, citing 15 years of below-inflation raises. The government deems this request unreasonable due to economic constraints. Doctors are set to receive a six percent pay bump this year, with junior doctors gaining an extra £1,250 on average, totaling nearly nine percent.
In October, junior doctors and consultants from the BMA staged coordinated strikes on October 2, 3, and 4, with emergency care still provided. Junior doctors voted to extend the strike, and the BMA's industrial action mandate was renewed. Despite an announced six percent pay increase for consultants in July, the BMA argues their take-home pay has fallen by over a third in 14 years.
Members of Unite, employed by ground-handling firm Red Handling, initiated a four-day strike beginning on August 18, followed by another four-day strike from August 25, impacting the August bank holiday weekend. Additional strikes are anticipated at the end of October, aligning with the half-term break. Baggage workers under Unite are slated for another walkout from October 20 to 30. Red Handling provides ground-handling services for Delta, Norwegian, Norse Atlantic, Saudia, and TAP Air Portugal.
University Staff and Teachers
University and College Union (UCU) members from 42 universities struck in late September over pay deductions. Some university staff joined the strike last month for similar pay concerns. The Association of School and College Leaders (ASCL) and National Education Union (NEU) unions dropped plans for industrial action after accepting a well-funded pay offer announced mid-July. This included a 6.5 percent rise, as the School Teachers’ Review Body advised.
National Association of Schoolmasters Union of Women Teachers (NASUWT) instructed members to follow their working hours from September 18 strictly. While the dispute was settled in Scotland, teachers in Northern Ireland have engaged in non-strike actions since October 2022, along with National Association of Head Teachers (NAHT) members in Wales since February.
