Immigration that fills gaps in the UK’s domestic jobs market can help push down inflation, the deputy head of the International Monetary Fund has said. Gita Gopinath told BBC Newsnight that “with inflation as high as it is, having workers who can fill the shortages in some of the sectors that we’re seeing right now will help with bringing inflation down.” Economists have identified the UK’s tight labour market, exacerbated by the impact of Brexit on flows of European Union workers and the impact of the pandemic, as one of the main contributory factors to high domestic inflation. Meanwhile, in an interview with the Financial Times, Gopinath warns that artificial intelligence risks “substantial disruptions” and calls on governments to craft new rules to prepare for the nascent technology
Our Comments: – Immigration can help push down UK inflation, says IMF deputy
Matthew Pinto-Chilcott, FCIPD, ACEL, Owner of Consensus HR comments: “We have written a number of blogs on inflation and the current skill shortage in the UK and this recent article demonstrates one opinion of from the IMF but what are your views on this? I know from talking to former colleagues within the retail and catering industry that this is currently a major issue with employment but will be interesting to hear from others?”
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Matthew Pinto-Chilcott, Owner of Consensus HR comments: – PM working on ‘tough’ new anti-strike laws“I do not know what your views are in relation to the current state of the economy and many public sector provisions taking strike action but this latest news that has been broadcasted and written in a number of papers explains what action the Government is aiming to take in the future. The current economy with high inflation and the war in Ukraine and high gas / electricity prices is something very unusual to me, having not experienced it in the past but it highlights the importance of employee relationships and the need for all parties to be reasonable and to take reasonable action. Running a business / service is never easy and having employees / team has complications as well. In these instances, it is easy for us to have our say / point of view but as with all HR and business in general, unless you know the facts and have all the information in front of you, you are not able to claim that your view is correct and reasonable! Also, depending on who’s view you listen to, whether this be the Government or the Unions, you will have your stance but we need to remember negotiation and best practice HR within your company can help to ensure that issues such as these are kept to a minimum and members of the team made to feel part of the business and the decisions that are made and fully understand why they are being made and that their views matter”
NEWS ARTICLE – PM working on ‘tough’ new anti-strike laws:-
Rishi Sunak said on Wednesday that he would bring in “new tough laws” to protect people from strike disruption. He told MPs that if “union leaders continue to be unreasonable, then it is my duty to take action to protect the lives and livelihoods of the British public.” The Prime Minister’s pledge came as the PCS union said Border Force staff would join a wave of strikes this Christmas. A bill has been introduced to Parliament which would ensure minimum service levels on transport networks during strikes, but it is yet to be debated by MPs and peers. Downing Street said the legislation would be extended to other services but would not specify what these would be, and no timescale was given. Meanwhile, the Labour Party has said it will repeal the 2016 Trade Union Act if it comes to power, making it easier for unions to take industrial action. Elsewhere, senior military figures have told the government that Armed Forces personnel should not have to sacrifice their Christmas to cover for striking public sector workers who earn more than them. Bringing in soldiers also risks weakening the “operational capability” of the military to respond to threats, ministers were told.
Matthew Pinto-Chilcott – Owner of Consensus HR comments: “I found this article – Record pay rises planned for UK but real wages lag inflation from US News and the BBC very interesting bearing in mind what is going on in the economy at the moment with high inflation at 10.1 % and the war in Ukraine. Recent statistics show that UK has seen a slight rise in unemployment to 3.6% in the three months to September, up from 3.5 in August 22. The Bank Of England is also expecting unemployment to double by 2025 as we go through an anticipated recession. Employers are going to have to juggle a number of balls to ensure their team are motivated and paid enough to live comfortably whilst inflation is high and that the books balance with good sales, preferably increasing, motivated team members, low sickness and the need to not have to restructure the business due to reducing salaries /’ payroll and headcount.”
ARTICLE:
UK companies are planning their biggest pay hikes in a decade, but real-term wages will still grow more slowly than inflation, according to the latest quarterly survey from the Chartered Institute of Personnel and Development (CIPD). The survey found that British employers expect to raise their basic pay rates by 4% on average over the coming year, and by as much as 5% in the private sector – the largest such increases since the CIPD’s records started in 2012. “Pay awards are expected to rise by the highest amount we’ve seen in our survey for 10 years but it’s being outpaced by rising prices,” CIPD labour market economist Jon Boys said, adding “Rather than feeling the benefit of higher pay, most will face a real-terms pay cut.” The CIPD say the UK’s jobs boom has not yet peaked, with 69% of employers planning to hire in the next quarter.
By Reuters – Nov. 13, 2022, BBC, The Human Times – 15th November 2022
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With the current economic climate and inflation being in excess of 10%, what effect could this have your business and could we help?
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