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A report today highlights the ripple effect of labor shortages in the UK, as employers raise wages to try to keep existing workers and attract new ones.
More than half of FTSE 100 companies now pay their employees and contractors the voluntary ‘living wage’ – which takes into account the increased cost of living – of Â£ 9.90 per hour outside of London and Â£ 11.05 in the capital, from the current legal minimum of Â£ 8.91, rising to Â£ 9.50 next April.
More than a third of top UK bosses in a survey released today said retention was one of their biggest concerns, along with recruiting low-skilled staff from overseas under the new UK visa regime.
The country currently has more than one million job vacancies, leading the health and social services sector with 172,000 jobs offered. Social assistance for adults, where insufficient public funding exacerbates the problems of low wages, is particularly affected. Mandatory vaccination for nursing home staff, introduced last week, adds another layer of problems, according to HC-One, the UK’s largest operator of nursing homes.
The second hardest hit is the hotel industry, the UK’s third largest private sector employer, with 134,000 vacancies. The industry accounts for 10 percent of UK employment and 5 percent of the national gross domestic product – although many sites have closed permanently since March of last year.
The sector remains “at risk” according to the industry’s trade body, despite increased spending per customer since pandemic restrictions were eased over the summer. Thousands of European workers left because of Brexit while others sought work in more stable sectors. And while many were covered by the government’s leave plan, that did not include tips, leaving many workers with significantly lower incomes.
Hospitality and healthcare both face new competition from sectors that developed during the pandemic, from public sector programs such as NHS Test and Trace to transport and logistics – the subject of our new special report – where the number of jobs advertised has quadrupled from pre-pandemic levels, according to official data.
Labor shortages, including the current shortage of heavy truck drivers, are likely to affect UK supply chains for ‘a few years, assuming wages rise and more people enter the industry. ‘industry,’ according to Andy Prendergast, national secretary of the UK union GMB. .
âWe have to recognize that we have tried to do it on the cheap and that we will have to have higher consumer prices or lower corporate profits,â he said.
Bank of England Governor Andrew Bailey told a parliamentary committee he was very worried about inflation and his decision to keep interest rates on hold had been very tight (Reuters)
U.S. coal prices hit their highest in more than 12 years as the global electricity crisis increases demand for the dirtiest fossil fuel (Bloomberg)
Prime Minister Boris Johnson said the UK could not be complacent about the increase in coronavirus cases in mainland Europe (BBC)
For the latest updates on coronaviruses, visit our live blog
Good to know: the economy
UK set Â£ 1bn this week post-Brexitexport strategy at an international trade and investment event in London. Prime Minister Boris Johnson is under pressure to show the benefits of leaving the EU, although many companies complain that they face additional costs and red tape, rather than seeing practical benefits. A new report contradicts Johnson’s view that an economy “with high wages, high skills and high productivity” comes from restricting immigration.
Latest for UK and Europe
Electricity prices in UK reached its second highest level since 2018 today, as low wind speeds forced the country to increase its dependence on gas-fired power plants and burn coal to meet demand for electricity.
The parties supposed to form The next German government presented plans to tighten restrictions on unvaccinated residents, following similar measures in Austria that went into effect today. About 30% of the German population has not been vaccinated against Covid-19.
Christian Sewing, the boss of Deutsche, Germany’s largest bank, urged the European Central Bank to tighten monetary policy to tackle soaring inflation. âThe supposed cure-all of recent years – low interest rates with seemingly stable prices – has lost its effect, now we are fighting the side effects. Monetary policy must counteract this – and as soon as possible, âhe said. Tiff macklemGovernor of the Bank of Canada argues in the FT that while progress in overcoming the effects of the pandemic is faster than expected, monetary stimulus from the central bank is still needed.
US Secretary of the Treasury Janet Yellen said inflation will remain high until Covid-19 is brought under control. New data last week showed consumer prices in the United States rose 6.2% in October from a year earlier, its fastest rise since 1990.
The economy of Japan declined in the third quarter, as supply chain issues and the resurgence of a coronavirus affected spending by consumers and businesses. Fumio Kishida, the new prime minister, is set to launch a stimulus package in the form of cash donations and grants to revive Asia’s largest advanced economy. The economy of Thailand also returned to contraction.
New house prices in China fell for the second consecutive month in October. Problems in the real estate sector – which directly and indirectly accounts for more than a quarter of economic activity in China – also pose risks to the US financial system, the Federal Reserve warned last week. Head of JPMorgan Jamie Dimon today became the first Wall Street boss to visit greater China during the pandemic.
Global dividends as shareholders appear poised to exceed pre-pandemic levels by the end of the year, new data shows. Many companies had reduced or suspended payments at the start of the crisis to preserve their cash flow.
The latest sign that short-haul airlines were recovering from the pandemic came with a multibillion-dollar order for 255 Airbus from seasoned investor Bill Franke, who will go to carriers such as Wizz Air in Europe and Frontier in the United States. Airbus said over the weekend that it expected industry growth to be driven by airlines modernizing older and inefficient planes as well as growing demand for air cargo.
Actions in Cineworld jumped to 15% today as the world’s second-largest cinema chain reported a huge increase in demand from moviegoers for the latest James Bond film and other blockbusters.
Port operators were already preparing to adapt to the new generation of mega-ships before the pandemic, but the current compression of the supply chain has brought new urgency to the need for modernization. Read this and more in our The future of logistics report.
The closure of bars and restaurants during lockdown has been a boon for wine merchants as people switched from plonk to premium drinks. Berry Bros & Rudd, the 320-year-old London company, has reported increased sales and record demand for its collection services.
The world of work
The results are available for the FT Return to Office survey, covering your thoughts on everything from hybrid working and its effects on corporate hierarchies to commuting and inflexible managers.
Not all of us have the luxury of being able to give up our jobs and pursue our dreams, says journalist and actress Viv Groskop. For several people “The great resignation“Has a more literal meaning, she argues:” To be resigned to your fate. Take it out. Embrace stoicism.
Even after the disruptive shock of the pandemic, organizations are giving up on previous management methods, writes Andrew Hill, editor of the FT. But large-scale transformation is still possible, he argues.
Covid cases and vaccinations
Total global cases: 252.9 m
Get the latest global image with our vaccine tracker
To concern: How to reconcile an old institution with modern transparency and modern standards? As the first trial of a cardinal for financial crimes since the 1730s opens, our new film investigates the finances of the Holy See and links to a controversial real estate deal in London.
Video: Can the Vatican reform its finances?
The coming week – Start each week with an overview of what’s on the agenda. register here
FT asset management – The inside story about the engines and shakers behind a multi-billion dollar industry. register here
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