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Here’s our full story on Network Rail’s chief negotiator Tim Shoveller claiming a deal to end rail strikes is “within a long way” as drivers and staff staged a walkout in the first of five consecutive days of national rail strikes.
The UK Transport Secretary denies blocking a deal
UK Transport Secretary Mark Harper has argued that the government is doing what it can to end the rail dispute and strikes over pay, jobs and working conditions.
He denied allegations by the RMT union that the government is blocking a deal between the unions and Network Rail and train operators. He said a “fair and reasonable offer” was on the table and rail workers needed to accept changes to working conditions.
He told BBC Radio 4’s Today program that he had met with RMT boss Mick Lynch, who said on Monday that instead of “facilitating a deal”, the government was doing the opposite. Harper said:
I tried to change the tone of the discussions and also made sure there was a new and improved pay offer going to the unions, and two of the unions have accepted that offer at Network Rail. It is disappointing that the RMT has advised its members not to accept this and to continue to strike.
And we had meetings, the rail minister met with employers, the train operating companies and Network Rail and the unions before Christmas. We have more meetings scheduled next week and are trying very hard to facilitate the resolution of this dispute rather than keeping it on our hands.
He said train operators had put a “fair and reasonable offer on the table”.
What they need to do is dump some of the outdated labor practices with union reforms. It is perfectly reasonable for you to remove some of the outdated practices so that we can hire people to work on a Sunday so that we can have reliable services for rail users.
When asked if rail companies could offer more pay in exchange for these changes, or if they needed government permission to do so, Harper said:
We’re not going to get these discussions going on these reforms unless the unions get off the picket line and back around the table. But the offer that is made to them… has to be fair to the taxpayer.
He reiterated:
There must also be a fair and balanced offer for taxpayers. There is no bottomless pit of taxpayer money to throw at this problem. There is a fair and reasonable offer on the table that is comparable to the kind of payment arrangements that people are getting across the economy and we need to have some reform in the industry.
He claimed he was “tough on both sides”, when asked why he was so much tougher on unions than train operators, who made £300m of profits during the pandemic, with many of them on poor service in recent months.
Mark Harper in the Cabinet Office on December 14, 2022. Photo: Tayfun Salcı/ZUMA Press Wire/REX/Shutterstock
Updated at 09.14 GMT
In financial markets, Shore Capital analyst Peter Ashworth is cautiously optimistic for this year:
2022 ended with a whimper instead of the Santa rally we expected. Year-end reviews make for daunting reading. The FTSE 100 ended the year “flat”, maintaining the rally seen since mid-October. In 2022, the market has absorbed nine interest rate hikes, 10.7% inflation (near a 40-year high) and a 0.3% drop in GDP in 3Q22.
In this context, the outlook for 2023 looks better with interest rates peaking and inflation expected to ease. With undemanding valuations, we start the new year with a more optimistic outlook. A resolution we hope to maintain.
Network Rail chief negotiator: ‘touch distance’ deal
Tim Shoveller, chief negotiator for Network Rail, which maintains and manages the line, is optimistic that a deal can be reached in the long-running rail dispute between unions led by the RMT and Network Rail. He told BBC Radio 4’s Today programme:
What we are saying to the RMT is that we know what areas have been misunderstood by our staff, their members, and we want to make sure that we can work with the RMT now to clarify where there have been misunderstandings and put try it again.
We only need 2,000 people who voted ‘no’ last night to change their vote, and the deal will go through, so we think it’s within striking distance.
Meanwhile, RMT boss Mick Lynch, who is on a picket line at London’s Euston station this morning, has again accused the government of blocking a deal.
Updated at 08.35 GMT
Investors should brace themselves for another turbulent year
Graeme Worthen
Investors should brace for another turbulent year in financial markets, economists have warned as central banks battle inflation, China reopens its economy after Covid-19 restrictions and the Ukraine war pushes the global economy into recession.
The first half of the new year is likely to be turbulent, according to Wall Street predictions, after global markets suffered their biggest drop since the 2008 financial crisis last year.
But the U.S. S&P 500 is still expected to end 2023 slightly higher than it started the year. The average target of 22 strategists polled by Bloomberg has the S&P 500 ending 2023 at 4,078 points, up 6% from 2022.
Economists predict the US Federal Reserve will hold back on interest rate hikes this year as the outlook for the US economy worsens. US inflation has retreated from its peak last summer, while the Fed’s series of rate hikes in 2022 has also cooled the housing market.
“We believe that a period of below-trend growth is inevitable and that recessionary risks are elevated as the lagged effects of tighter monetary policy work their way through the economy,” said Brian Rose , senior US economist at UBS Global Wealth Management.
Updated at 08.09 GMT
Most UK train services are out of action as five days of strikes begin
topham white
UK rail strikes are also continuing, with tens of thousands of rail workers walking out today as the dispute over pay, jobs and working conditions remains unresolved. Our transport correspondent Gwyn Topham reports:
The first of five consecutive days of national rail strikes have begun, shutting much of Britain’s rail network and leaving only a skeleton service for commuters on city and intercity lines.
Passengers were urged to try to travel only if necessary, with around 20% of trains expected to run and scheduled operating hours reduced between 7.30am and 6.30pm.
Members of Network Rail’s Rail, Maritime and Transport union and 14 train operators are on strike for two 48-hour periods, starting on Tuesday and again starting on Friday.
With signaling staff among the RMT’s 40,000 members on strike, much of the railway in Wales, Scotland and less populated regions of England will not operate at all, while service frequencies will normally be reduced to one train per hour on main routes.
The latest action comes without an immediate resolution to the long-running dispute over wages, jobs and working conditions at the railroad. Unions claimed on Monday that rail companies were “desperate” at the government’s handling of the pay dispute, with the Treasury now effectively controlling what deal can be made.
Mick Lynch, the RMT general secretary, said there had been “radio silence” from the government since a meeting in mid-December.
Updated at 08.09 GMT
Introduction: China’s factory slide intensifies; Economists say the UK is facing the worst recession in the G7
Good morning and welcome to our continuing coverage of business, financial markets and the global economy.
The new year has started with a warning from the head of the International Monetary Fund, Kristalina Georgieva, that a third of the world economy will be in recession this year and that 2023 will be tougher than last year. Economists warn that the UK is facing the worst and longest recession among the G7 countries.
According to the Financial Times’ annual survey of leading UK economists (a poll of 101 analysts), a clear majority said the inflationary shock caused by the Covid pandemic and Russia’s war in Ukraine would persist longer in the UK elsewhere, forcing the Bank of England to keep interest rates high and the government to run a tight fiscal ship. More than four-fifths expect the UK to lag behind other major economies, with the UK economy already in contraction.
John Philpott, an independent labor market economist, told the FT:
The recession of 2023 will be felt much worse than the economic impact of the pandemic.
In China, factory activity declined at a steeper pace in December as rising Covid infections disrupted production and dampened demand, after Beijing lifted most restrictions of Covid, according to a survey.
The Caixin/Markit manufacturing PMI fell to 49 in December from 49.4 in November. It has been below the 50 mark that separates growth from contraction for five months. The reading was the lowest since September, but slightly better than expected. China’s biggest official PMIM survey on Saturday showed a much sharper contraction, with the activity index falling to the lowest level in nearly three years.
In the first week of the year, we will get the minutes of the last US Federal Reserve meeting (Wednesday), US employment data on Friday and the OPEC oil cartel meeting as well.
Some Asian stock markets rebounded from earlier losses, with Hong Kong’s Hang Seng up 1.6 percent and the Shanghai Composite up 0.9 percent, while Japan was closed for a holiday. However, the Australian market lost 1.3% and South Korea’s Kospi fell 0.3%.
Naeem Aslam, chief market analyst at trading platform Ava Trade, says:
2023 has begun with a further escalation of tensions between Russia and Ukraine, as a missile attack on a Russian military installation in occupied territory in Ukraine killed 63 soldiers. More than likely this has even more…