The labor shortage leads to delays and production stoppages in countless industries.
(Photo: Reuters)
London The supply chain problems and labor shortage in the UK are likely to persist until at least 2023. 73 percent of British companies expect the situation to be as strained a year from now as it is today. This was the result of a survey by the consulting firm Deloitte among 92 CFOs of British companies.
The UK economy is particularly hard hit by the bottlenecks. In addition to the global delivery problems after the corona pandemic, there are the harmful consequences of Brexit. After the end of freedom of movement, truck drivers, butchers, warehouse workers, technicians and nurses, among others, are missing.
There are more than a million vacancies in the country. This leads to delays and production stops in countless industries. Most recently, container ships were even diverted from the British port of Felixstowe to other European ports because the drivers were missing to distribute the ships’ cargo.
According to the survey of CFOs, more than half of companies had supply chain issues in the third quarter. A quarter of the board members surveyed stated that these were significant or difficult. Nevertheless, the companies continue to focus on investment and growth, said Deloitte chief economist Ian Stewart.
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German companies in Great Britain also expect the British economy to need at least nine months to recover from the crisis. That was the result of the autumn survey of the German-British Chamber of Commerce. “Some of the bottlenecks will certainly continue until 2023,” says Chamber Director Ulrich Hoppe. The labor shortage will remain. “The training of skilled workers is a question of generations,” says Hoppe. “That won’t work within a few years.”
Violent argument about the causes
A heated dispute has broken out between business associations and Prime Minister Boris Johnson’s government over the causes of the bottlenecks. While companies are demanding more immigration to address staff shortages, the government is opposed to visa easing.
Johnson accuses the economy of becoming dependent on low wages and recommends paying higher wages and better training local workers. However, this does not help in the short term.
Business discontent with the Conservative government is therefore great. There is a feeling in companies that the government sees the economy as an enemy, said the head of the Make UK industry association, Stephen Phipson.
The head of the Road Haulage Association, Richard Burnett, is reportedly no longer even invited to meetings on Downing Street because he criticizes the government too often.
Business associations put hope in Finance Minister Rishi Sunak’s budget proposal.
(Photo: Getty Images)
Business associations are now placing hope in Finance Minister Rishi Sunak’s budget proposal next week. Among other things, Sunak should provide more investment incentives for digital and sustainable transformation projects, demanded Make UK.
Earlier turnaround in interest rates expected due to rising inflation
Rising wages and energy prices are driving inflation. The rate of inflation in August was 3.2 percent. By the end of the year, it is forecast to exceed four percent – twice the Bank of England’s long-term target. In the financial markets, it is now expected that the central bank will initiate the interest rate turnaround this year. The key interest rate has been 0.1 percent since last year.
Federal Reserve Chairman Andrew Bailey reiterated at the weekend that action must be taken. He sticks to his view that inflation is a temporary problem. But he now expects it to remain at a high level for longer due to the high energy prices. According to his statements, the markets are now pricing in an interest rate hike to 0.25 percent for the next meeting of the monetary policy committee in early November.
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