"Britain is on the brink of recession and GDP will stagnate in 2023"

By Suzanne Evans, Director, Political Insight

According to the Organisation for Economic Co-operation and Development (OECD), Britain is on the brink of recession and GDP will stagnate in 2023 due to "depressed demand" amid the global supply bottlenecks and energy market turmoil. The OECD forecast the UK economy will expand 3.6% this year before sinking to zero. The club of wealthy western nations also said it believed inflation in the UK would peak at more than 10% by the end this year, and still stand at 7.4% at the end of 2023. The consequence of this, the OECD said, would be that households will take on debt to "to keep up with the rising cost of living," and businesses will cut investment in the face of higher borrowing costs. The OECD also said the Bank of England(BoE) would have to raise interest rates to 2.5% from 1% to tackle inflation, which is currently running at nearly five times the BoE’s 2% target.  
 
Meanwhile, consumers and business will pay a high price for Russia’s invasion of Ukraine and persistent delays to supplies from China, according to the British Chambers of Commerce (BCC) which has just downgraded its outlook for growth in the British economy next year to 0.6%. The BCC predicts the economy will “grind to a halt” before shrinking in the second half of this year as soaring inflation and tax rises take their toll.
 
The United Arab Emirates’ Energy Minister Suhail Al-Mazrouei has told a conference in Jordan that oil prices are “nowhere near” their peak. Yesterday, the price of a barrel of oil surged more than a dollar, taking petrol prices up yet again. By early afternoon yesterday, a barrel of benchmark Brent Crude was worth $121.67 up $1.10 or 0.9%.  Al-Mazrouei said: “With the pace of consumption we have, we are nowhere near the peak because China is not back yet, China will come with more consumption.”
 
Members of Unite at Transport for London (TfL) and London Underground are to join a walkout on June 21. The Rail, Maritime and Transport (RMT) union has already announced a Tube strike on that day, and members at Network Rail and 13 train operators will walk out on June 21, 23 and 25. The strikes will be the biggest outbreak of industrial action in the industry in thirty years.
 
A joint statement from bodies representing hospitality businesses, theatres, live music venues, and museums, says the proposed rail strikes will be "hugely damaging" to their businesses and felt "counterintuitive when we are facing so many other challenges". "Our night-time economy relies heavily on the rail network to bring our audiences and staff safely to and from our venues, with 81% of London theatregoers using public transport and a similar proportion of hospitality customers," they said. "We urge all stakeholders to come together to support a recovery that we can all benefit from."
 
Heathrow Airport boss John Holland-Kaye has warned that passengers could face another 18 months of travel disruptions. He told a Financial Times conference that it would take between 12 to 18 months for the aviation sector to fully recover capacity, after cutting tens of thousands of jobs during the pandemic, and now struggling to rehire staff as demand for travel returns. Meanwhile, some MPs are calling for the Civil Aviation Authority (CAA) to be handed greater powers to crack down on airlines who overbook flights and cannot satisfy demand, Yahoo Finance UK says. A string of cancellations over the weekend has left thousands of passengers stranded across Europe. Huw Merriman, chairman of the Transport Select Committee, has also called for immediate reforms entitling passengers to automatic compensation. “It should be the responsibility of the airline and not the consumer to apply for compensation. Why should they have to go through the rigmarole of filling out fiendishly complicated forms?” he said.
 
The number of jobs offering a four-day week has increased over the past year, according to new research by jobs website CV-Library, which said adverts for such positions have jumped by around 90%, especially for work in sectors such as charities, sales, distribution and catering.
 
The Royal College of Nursing (RCN) has conducted research showing a 10-fold increase since the 2019 general election in the number of nurses joining from countries currently identified as having the most severe workforce shortages, to fill the tens of thousands of nursing vacancies across health and care services. The College is calling on governments across the UK to invest in expanding the domestic workforce and to introduce bilateral agreements to ensure international recruitment is mutually beneficial for these countries. General secretary Pat Cullen said: “Ministers are overly reliant on nurses from countries with critical workforce shortages. Meanwhile, their lack of investment in UK nursing staff, both today’s and those of the future, is deeply concerning”.
 
 E.on CEO Michael Lewis is calling on the Government to help make homes in the UK warmer, saying the country needs “a massive ramp-up” in insulation and other energy efficiency projects. He told MPs on the Environmental Audit Committee: “Our plea to the Government has always been to push hard on energy efficiency, because that’s the proven way, the only silver bullet, for this crisis. It will reduce prices, reduce energy consumption, and contribute to net-zero on a sustainable basis,” he said, adding that if 19 million homes lacking proper insulation were properly insulated, it would save the equivalent of six nuclear power plants worth of energy.
 
The John Lewis Partnership (JLP) has announced the locations in which it plans to build the first of its rental homes. A few hundred new homes will be built on three sites in London and Reading, Yahoo Finance UK reports. The projects include building over Waitrose shops in Bromley and West Ealing in Greater London, as well as replacing a vacant John Lewis warehouse in Mill Lane, Reading. Although full details have not yet been disclosed, it is believed the sites would be built for different sized households.
 
Tony Blair’s son Ewan has an estimated paper fortune of £337m after his Multiverse start-up secured fresh investments that pushed its value over £1bn for the first time, The Telegraph reports. The Google-backed education technology start-up has secured a $220m (£176m) investment to expand into the US operations, Multiverse said yesterday morning. With Ewan Blair owning at least 25% of the company, its new valuation of $1.7bn means his shareholding is worth a minimum of £337m. A company spokesman declined to say what his precise shareholding is but confirmed it is between 25% and 50%.
 
Sanjeev Gupta’s GFG Alliance has failed in an attempt to have a winding-up order thrown out on the grounds that the metals group’s struggles were caused by the coronavirus pandemic, The Guardian reports. Credit Suisse, one of Gupta’s main creditors, started insolvency hearings against GFG companies last month, in a move that raised concerns for the jobs of 35,000 workers in the UK and in operations around the world. Gupta has been trying to find a new source of funding for more than a year since the collapse in March 2021 of Greensill Capital, an investment firm that previously employed former UK prime minister David Cameron. Greensill had funnelled £4bn to GFG and is currently the subject of an investigation by the Serious Fraud Office.
 
British aerospace and defence equipment manufacturer Meggitt has officially opened its new £130 million 'super site' at Ansty Park in Coventry - the largest single investment in the firm's history. More than 1,000 people are based at the Midlands facility.
 
Airbus confirmed on Wednesday that it delivered 6% fewer airplanes in May, compared to the same month last year, as the aerospace industry wrestles with tight supply chains. It delivered 47 jets, bringing the total for the year so far to 235, up 7% from the first five months of 2021. The announcement confirms a Reuters report last week that Airbus had delivered approximately 47 jets in May.
 
Volkswagen is offering pay-offs of up to six-months salary to the 200 employees working at the Nizhy Novgorod plant in Russia if they agree to quit voluntarily, the Kommersant newspaper said this morning. Volkswagen announced in March that production at its Kaluga and Nizhny Novgorod sites would be suspended until further notice because of Western sanctions, and vehicle exports to Russia stopped with immediate effect. The deal would also include medical insurance until the end of 2022, Reuters reported.
 
TikTok is investigating claims of an aggressive work culture after a senior executive at the firm allegedly said he "didn't believe" in maternity leave. The Financial Times (FT) reported that Joshua Ma has been replaced in his role leading the social media firm's UK ecommerce team, after a probe by the newspaper, which alleged a staff exodus from TikTok's London offices because of a culture that goes against typical working practices in Britain. The newspaper also carried reports of long working hours, with members of the ecommerce team saying they are expected to regularly work more than 12 hours a day.

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