The Week in Business: Labor Actions Sweep Britain
What’s Up? (Dec. 4-10)
Workers’ Frustrations With Wages
A wave of strikes and other labor actions began in September in Britain, largely set off by workers’ frustrations that wages were not keeping up with soaring inflation. That wave is now intensifying, with hundreds walking off the job last week. About 600 workers with a nonprofit housing organization began a two-week strike, 200 employees of a brewing company went on strike and several dozen employees at a pickle factory walked out. (That could mean beer and pickle shortages over the holidays, according to the union that represents these workers.) But that may be just the beginning: Workers across industries including health care and transportation are poised to go on strike, and labor actions are planned every day through Christmas. The central issue in most cases remains pay, particularly in the public sector as the British government under Prime Minister Rishi Sunak seeks to make drastic budget cuts. Mr. Sunak has said he is working on “tough new laws” against these strikes.
Relief at the Gas Pump
Traveling this winter — if you are going by car — is likely to be much more affordable than it was over the summer, when gasoline prices in the United States reached a record national average of $5 a gallon. Last week, the national average price for gas fell to $3.33 a gallon, according to AAA, almost exactly where prices stood a year ago, when the national average was $3.34. The prices have been sent lower by a decline in worldwide energy demand and falling oil prices just in time for the holiday season. It is a rare bright spot for consumers who are still experiencing uncomfortably high prices elsewhere in the economy even as inflation is beginning to loosen its grip. But that could all change, as China eases its Covid restrictions and oil supplies tighten because of the new embargo on Russian oil.
China Relaxes ‘Zero Covid’
China’s economy has suffered as a result of strict “zero Covid” policies that have shuttered businesses and set off record youth unemployment rates. But as the country begins to roll back those measures in response to widespread protests, economic uncertainty remains. Analysts say consumer spending is unlikely to quickly rebound after being stifled for so long, and the country is facing a housing crash as well as weakening demand from trading partners that may be approaching recessions. China is also bracing for a surge in Covid cases as its restrictions are lifted. Still, upbeat investors hoping for a recovering economy have lifted stock markets in Hong Kong and Shanghai.
What’s Next? (Dec. 11-17)
High Hopes for a More Moderate Fed
For many consecutive months, officials at the Federal Reserve have disappointed — and spooked — investors eager to see the central bank slow the pace of its aggressive interest rate increases. But they may be pleased with the outcome of the Fed’s meeting on Wednesday, as Jerome H. Powell, the Fed chair, has signaled that policymakers would begin to moderate their approach. Analysts expect an increase of half a percentage point, as compared with the three-quarters of a percentage point raises at the last four meetings. As the Fed has tried to cool off demand and slow down the economy, it has been conscious of the fact that it could go too far and tip the country into a recession. “My colleagues and I do not want to over-tighten,” Mr. Powell said last month.
Article source: https://www.nytimes.com/2022/12/11/business/the-week-in-business-labor-britain.html