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

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 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

US jobs market recovers to pre-pandemic levels

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.

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 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.”

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%).

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

Mark Sweney

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).

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:

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%.