Hunt commented on the renewed price shock: “We cannot have long-term, sustainable growth with high inflation.” Tomorrow, Thursday, he will present a plan “on how we can reduce debt, ensure stability, lower inflation and at the same time protect the most vulnerable. “
Also among the weaker are most British workers, whose real wages are falling rapidly as a result of high inflation rates.
In their distress, they react with strikes for higher nominal wages in order to protect their standard of living. According to the ONS, more than 560,000 working days were lost in the British economy to strike action in August and September alone, the highest figure in a decade.
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According to the economists, however, higher wage demands lead directly to the vicious circle of a price-wage-price spiral. Former central banker DeAnne Julius told the BBC: “That’s the big danger. The Bank of England must respond with further rate hikes.”
Food prices rise by 16.5 percent
According to state statisticians, wages in the private sector rose by 6.6 percent year-on-year in September, compared to just 2.2 percent in the public sector. Not enough to keep up with the rapidly increasing cost of living.
According to the ONS, the British economy lost more than 560,000 working days to strike action in August and September alone, the highest figure in a decade.
(Photo: dpa)
Food prices alone have risen by 16.5 percent in the past twelve months. And the state price cap for energy could not prevent a further increase in gas and electricity costs. ONS Chief Economist Grant Fitzner said: “Rising gas and electricity prices have pushed headline inflation to the highest level in over 40 years, despite the energy price guarantee.”
The state price cap for energy costs only applies until April 2023 and is then to be replaced by more targeted energy subsidies for low-income households. Ex-central banker Julius is therefore already warning of a renewed price hike for the majority of British consumers.
In particular, many employees in the public sector see their strikes as a kind of self-defence. Mark Serwotka, head of the Public and Commercial Services Union (PCS), says: “If the government doesn’t listen to us, we have no choice but to launch a protracted program of industrial action affecting all areas of public life.”
>> Read here: The smart pragmatist Sunak – Will he solve the Northern Ireland dispute?
Among other things, the union is demanding wage increases of ten percent.
Strike affects many workers
Last week, nurses at the NHS, the national health service, voted in favor of industrial action for the first time in their more than 100-year history. It was previously known that some hospitals are organizing food donations to support their employees. Pat Cullen, Chair of the Royal College of Nurses (RNC), said: “Our members say enough is enough.”
The British central bank recently braced itself against high inflation with the largest interest rate hike in decades and raised the key monetary policy rate by 0.75 points to 3.0 percent.
(Photo: dpa)
When Prime Minister Rishi Sunak recently visited Croydon University Hospital, in front of the rolling TV cameras, patient Catherine Poole, 77, urged him to “try harder” to improve the health situation.
In other areas of the British economy, too, there is ferment among workers. The wave of strikes ranges from railway workers, dockers and ground staff at airports to teachers, university employees and postmen to public administration and transport authorities. Even at the headquarters of the British secret service GCHQ in Cheltenham, employees are dependent on food donations.
Unions threaten general strike
British trade unionists are urging the industrial action to be coordinated into a kind of “general strike” before Christmas, in order to put further pressure on Sunak’s Conservative government. However, UK labor law requires unions to meet certain minimum strike quotas, making coordination difficult.
British Prime Minister Rishi Sunak (left) and his Treasury Secretary Jeremy Hunt in the House of Commons (archive photo).
(Photo: AP)
On the fringes of the G20 meeting in Bali, Prime Minister Sunak expressed his understanding for the displeasure, but rejected the salary demands of the public sector unions as excessive.
The wave of strikes could well become politically dangerous for Sunak. Especially when public displeasure spreads and reaches levels similar to those of the notorious “Winter of Displeasure” of 1978/79.
All eyes are therefore on the tax hikes and spending cuts that Finance Minister Hunt will announce in the British Parliament on Thursday. The Chancellor of the Exchequer has already announced that the civil service must be prepared for severe cuts. Great Britain is facing politically turbulent times.
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