BT strike set to end after reaching pay deal

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29th November 2022

Bite-sized business news from the UK and beyond

Good morning We are officially halfway through the World Cup with 32 games played and 32 to go. This evening Wales take on England in a must win match that will be the 104th meeting between the two neighbours. Throughout the years, England have been victorious in the fixture 68 times with Wales winning 14 matches and a further 21 ending in draws.

Today's stories

BT strike set to end after reaching pay deal
China Covid unrest sends shockwaves worldwide

TELECOMS
BT strike set to end after reaching pay deal

What happened?
Yesterday the Communication Workers Union, which represents BT workers, announced the telecoms giant had agreed to a pay increase of up to 16% for tens of thousands of workers.

How did we get here
BT workers are among the millions of private and public sector workers who have either walked out or are contemplating doing so in order to win inflation-matching pay increases.

Over the summer nearly half of BT’s 100,000 workers went on strike for the first time since 1987. It was after they turned down the company's offer of a flat-rate pay rise of £1,500 which the CWU said wasn’t enough to match the rising cost of living.

The new deal tabled equates to a permanent increase of £3,000 for all staff earning £50,000 or less a year, about 85% of the workforce. This means eligible staff will receive pay rises of between 6% and 16%, averaging at 9% compared to UK inflation of 11%. The CWU said it will urge its members to accept the proposal, which is now being put before members to vote on.

Zooming out: Currently BT spends £5bn on staff salaries and pensions and has committed to cutting total costs £3bn from its total cost base of £18bn by 2025. Despite this the company thinks increasing pay is the right outcome not only for employees but customers as well – the strike in the summer cost the company 40,000 broadband customers due to the impact on the service.

Other stories to keep you in the loop

UK property demand slides 44% after market-rocking mini-budget
Barclays CEO says he has cancer but will continue to run the bank
National Grid cancels plans to start emergency winter scheme
Finance workers are ignoring calls to return to offices, according to survey
Elon Musk says Apple has ‘threatened to withhold Twitter’ from the App Store
Meta fined €265m by Ireland
Crypto lender BlockFi files for bankruptcy after FTX collapse
Disney’s ‘Strange World’ flops with $100m loss

CHINA
China Covid unrest sends shockwaves worldwide

What happened?
Protests against China’s strict Covid policies and restrictions on freedom of speech broke out in at least 10 cities over the weekend.

The rare show of defiance rattled global investors who had hoped the world’s second largest economy would relax its “zero-Covid” policy – ie zero tolerance of any Covid cases - in favour of a more pro-growth stance.

How did we get here?
China maintains some of the most-severe Covid restrictions in the world, with millions living through work and school closures, mass testing and even full lockdowns for over 2 years.

The county’s notoriously authoritarian government fears that loosening Covid rules would overwhelm the healthcare system.

But there’s been growing discontent among the population and this erupted in protests after lockdowns were blamed for hindering rescue efforts in a fatal fire last week. Also adding to the frustration is the contrast between the bleak situation in China and the festive World Cup in Qatar with jubilant, maskless crowds.

Stock markets in Europe and the US had rallied in recent weeks partly driven by the hope that China’s economy will open up again soon, with the abandonment of “zero-Covid” policies.

This would act as both a source of demand and supply for the world again. A healthier Chinese economy would mean better overall global growth, but it would also alleviate supply chain pressures and thus arguably help cool prices.

The unrest is impacting supply chains halfway across the world
Employees who work at the world’s biggest iPhone plant violently tussled with security staff last week after officials clamped down on a Covid outbreak at the facility. It’s likely to result in a production shortfall of close to 6m iPhone Pro units this year.

What comes next: Public protests in China are rare — especially ones spread across multiple cities. But despite the widespread anger and frustration, the government isn’t expected to let go of its grip. In keeping with the history of protest in China, the authorities might just lock down harder. Or there might be rolling protests, with the economy deteriorating as a result.

Stat of the day

Crypto fraud has risen over 32% in the UK this past year as scammers increasingly target more inexperienced investors

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