Closing summary
Workers at an Amazon warehouse in Coventry have gone on strike in a dispute over pay, the first time the US e-commerce giant has faced industrial action in the UK (not counting unofficial, spontaneous wildcat strikes without a formal ballot last summer).
The company played down the strike, saying a only “tiny proportion,” of the firm’s UK workforce was involved in Wednesday’s action. It insisted that operations at the site were continuing as usual and that there was “zero impact” on customers.
“We appreciate the great work our teams do throughout the year,” Amazon said, stressing the firm’s “competitive” pay rates of £10.50-£11.45 an hour. The GMB is asking for £15 an hour.
One worker described the 50p pay rise to £10.50 awarded by Amazon in August as “ridiculous”.
European and US stock markets are in the red, with a number of downbeat quarterly results, including from Microsoft last night, adding to fears of a US recession.
Our other main stories today:
Marks & Spencer has urged the UK government not to consider separate labelling for goods sold in Northern Ireland during talks with the EU about improving post-Brexit trade arrangements, arguing that it would be too costly for retailers and customers.
Microsoft is investigating an outage that has hit users of its products worldwide including Teams and Outlook.
Campaigners have hailed a “seismic shift” in arts funding after the Royal Opera House confirmed it had severed its sponsorship relationship with BP after more than three decades.
Thank you for reading. We’ll be back tomorrow. Tare care – JK
Bank of Canada raises rates to 4.5%
The Bank of Canada has raised interest rates by 25 basis points to 4.5%, its highest level in 15 years.
After the eighth consecutive rate hike, the central bank said it would pause to assess the impact of the rate rises – but is “prepared to increase the policy rate further if needed to return inflation to the 2% target”. Inflation in Canada has surged to 7.8%.
UK rail strikes hit Wetherspoons sales
JD Wetherspoon said today that like-for-like sales have fallen back below pre-pandemic levels in the past 12 weeks, but insisted that it was “cautiously optimistic” about the year ahead.
Repeated rail strikes in the run-up to Christmas hit the hospitality sector hard, in its first Christmas without Covid restrictions in three years.
Chairman Tim Martin told Reuters:
Strikes had a negative impact, although it is difficult to quantify.
Like-for-like sales fell 0.7% compared with 2019 levels in the 25 weeks to 22 January. Sales growth in the 14 weeks to 3 November was wiped out by a 2% drop in the weeks that followed. However, sales were up 13.1% year on year, reflecting the impact from the Omicron variant on drinking and dining out at the end of 2021.
Hargreaves Lansdown analyst Derren Nathan said:
Given the multiple hits consumers are having to their spending power, it may be some time before genuine sales growth returns.
As reported earlier, a spokesperson for Amazon stressed the “tiny proportion,” of the firm’s UK workforce involved in Wednesday’s action, insisting that operations at BHX4 were continuing as usual. “We appreciate the great work our teams do throughout the year,” they said, stressing the firm’s “competitive” pay rates of £10.50-£11.45 an hour. The GMB is asking for £15 an hour.
More from Heather Stewart reporting from the Coventry depot:
GMB organisers freely admit the small proportion of staff at the site that have been able to sign up as members – around 300, of perhaps 1400.
The successful strike ballot in December was the second held, after a first go earlier in the year failed to breach the threshold of 50% of members needed to legitimise industrial action. In total, fewer than 200 staff voted to strike.
But one GMB member taking part stresses the difficulties of organising in this workplace, where any discussion of unions is frowned upon.
“Most of the other people – at least 70-80% – they don’t even understand English and they don’t understand the law. They are afraid of losing their job,” he says.
The GMB said that some lorries arriving at the site on Wednesday morning had refused to cross the picket line and turned around; but others appeared to be coming and going as usual. One worker emerged to say that managers were manning the packing lines.
Local GMB organiser Amanda Gearing, just about to grab some sleep after a long stint around the brazier, said “about 70” Amazon workers walked off their shift at midnight, welcomed by colleagues outside.
“They are making an impact, and I think that their voices are really being heard. Amazon are being stubborn about this, they don’t want these workers to organise a union, but I think at some point they’re going to have to get round the table. Because this isn’t us, as the GMB, this is workers – they want more pay,” she said.
She added that the 50p pay rise, “made them very angry, and they’re not a militant bunch”.
Updated
Lizzy Burden from Bloomberg TV is also reporting from the picket line in Coventry.
Amazon workers are on strike in the UK for the first time today, demanding a 50% raise to £15 an hour.
— Lizzy Burden (@lizzzburden) January 25, 2023
From the picket line in Coventry: pic.twitter.com/MX4elHuXKL
Former Labour leader Jeremy Corbyn, MP for Islington North, tweeted:
It takes an Amazon warehouse worker more than 8 weeks to earn what CEO Jeff Bezos makes in a single second.
— Jeremy Corbyn (@jeremycorbyn) January 25, 2023
Today, they are taking strike action for the first time in the UK over pay and conditions.
Solidarity with @GMB_union members making history. pic.twitter.com/Qso3v0QFAH
Updated
Taiwo Owatemi, Labour MP for Coventry North West, has tweeted her support for the striking Amazon workers at the BHX4 warehouse.
Coventry #Amazon workers at BHX4 Warehouse are now on strike, the first ever Amazon site in the UK to do so.
— Taiwo Owatemi MP (@TaiwoOwatemi) January 25, 2023
A historic moment in their fight for fair pay, decent working conditions and Trade Union recognition.
As their local MP, I stand with them✊🏿pic.twitter.com/bS1zszleMO
Kevin Maguire, the Daily Mirror’s associate editor, has tweeted:
Striking figure from the GMB union - Jeff Bezos could give £90,000 each to every one of his global workers and he’d still be wealthier than before Covid.
— Kevin Maguire (@Kevin_Maguire) January 25, 2023
Highlights grotesque inequality and Amazon’s claim to pay “competitive” wages.
Journalist Taj Ali tweeted:
Good morning from the Amazon picket line in Coventry. The first ever formal strike at an Amazon warehouse in Britain. pic.twitter.com/OvlmNryupD
— Taj Ali (@Taj_Ali1) January 25, 2023
Updated
‘The job is not human’: UK retail warehouse staff describe gruelling work
This week’s strike at an Amazon depot in Coventry is throwing the spotlight on to a hidden army of workers in the UK’s retail sector, many of whom face “particularly gruelling” conditions, according to recent research commissioned by the TUC, reports Heather Stewart.
Five academics at the Centre for Research on Employment and Work (Crew) at the University of Greenwich analysed data about the retail workforce during and after the Covid pandemic, and carried out in-depth interviews with 30 workers.
They found that the pandemic “intensified existing trends” in online shopping, which meant a renewed shift from traditional shop-floor jobs towards work in warehouses, away from direct contact with customers.
The analysis suggests these warehouse roles often provide more regular hours, and that competition for staff has pushed up wage rates – but some interviewees said they found the jobs extremely demanding.
Amazon workers describe 50p pay rise as 'ridiculous'
Amazon’s Coventry warehouse, known in the company as BHX4, is so big that its two entrances are in different postcodes. Outside one, a small band of workers were manning a smoky brazier on Wednesday morning, as part of a 24 hour-long strike – the first at the company anywhere in the UK, reports the Guardian’s special correspondent Heather Stewart.
Wearing hi-vis GMB tabards, staff are reluctant to give their names – but they have similar stories to tell, of their fury at the 50p an hour pay rise announced by Amazon last summer, and the struggle to make ends meet.
The work is physically demanding, one worker says. “It’s a lot of lifting. A lot of boxes, pallets. It’s hard. We sometimes take small breaks, five minutes, but it’s not allowed.”
Without public transport links to the site, which sits just outside the village of Allesley, he gets an Uber to work. In recent months the cost of that has gone up from £7 to £11.
Another striker says straightforwardly. “We are trying to get a better wage, and Amazon is not giving us any other option”.
Describing the controversial 50p pay rise as “ridiculous,” he adds, “it’s £20 a week after tax. When I go to the supermarket I am paying at least £20 a week more. What about the gas, electricity, rent, all of this on top? We cannot afford to live any more like this.”
Much of this is familiar from other strike battles in recent months, from railworkers to nurses. But unlike these workers, Amazon staff have no formal representation – the company has a well-documented policy worldwide of refusing to recognise trades unions.
Updated
Back to our main story, about Amazon’s first strike in the UK.
Melanie Stancliffe, partner in the Employment team at the law firm Cripps, says:
This is bad news for Amazon, and it needs to tread carefully. Dismissing staff for a lawful strike isn’t an option, as this would give rise to unfair dismissal claims – so the company will need to bring in other employees or agency staff to cover the work on strike days.
The current law doesn’t allow employers to force employees to provide a minimum level of service so it will mean the pressure is on for Amazon and other employers to resolve pay disputes – or else accept the likelihood of fresh walk outs in the near future.
Updated
Private rents in the UK increased by 4.2% in the 12 months to December, up from 2.1% in the 12 months to January 2022, according to the ONS.
The statistics office reported that, in the 12 months to December, private rental prices in the East Midlands experienced the largest increase of all English regions (5.0%). Meanwhile, the North East and South East experienced the smallest increases in England (3.8%).
However, other measures of private rents have been much higher.
Updated
UK income inequality rises in 2022
Income inequality in the UK increased last year, returning to levels seen before the Covid-19 outbreak in March 2020, according to official figures.
Inequality rose by 1.3 percentage points to 35.7% in the financial year 2022 compared with 2021, the Office for National Statistics said.
This was driven by a reduction in average disposable income in the fifth poorest households (3.4%), because of reduced original income and cash benefits.
There was an increase in disposable income of the fifth richest households of similar magnitude (3.3%), driven by increased original income.
This comes after a decline in income inequality for all households between 2020 and 2021, and means it went back to levels seen before the pandemic (35.4% in the financial year 2020).
Income inequality is measured by the Gini coefficient. The lower its value, the more equally household income is distributed. It is a measure of the way in which different groups of households receive differing shares of total household income.
For example, the bottom 5% of households might only have a 1% share of total household income. The bottom 10% of households might have a 3% share; the bottom 20% might have an 8% share, and so on.
News round-up
And here’s a round-up of today’s other stories:
An Australian-based startup, Recharge Industries, has made a nonbinding offer for the collapsed UK battery company Britishvolt that could revive plans to construct a large plant in northern England.
The bid was lodged in the UK late on Tuesday, shortly after a cash crunch at Britishvolt sent the company into administration. The collapse has severely dented the country’s attempts to modernise its automotive industry and supply the next generation of UK-built electric vehicles.
‘This is an exciting time!’ How Scotland’s whisky industry went from bust to boom.
Famous names including Stephen Fry, Emma Thompson and Mark Rylance have joined activists and businesses in calling on the UK’s big five banks to stop financing new oil, gas and coal expansion.
The Treasury must explain how the Russian founder of a mercenary army was given permission to circumvent sanctions, to attempt to silence a British journalist, Labour has said.
If the north of England were a country, it would be second bottom of a league table showing levels of investment in advanced economies, according to a report by a leading thinktank.
Elon Musk expected strong financial support when he tweeted that he would take Tesla private in 2018, but lacked specific commitments from potential backers, according to testimony he gave on his third day of questioning in a San Francisco federal court.
Musk is accused of defrauding investors by driving up the price of Tesla stock by tweeting on 7 August 2018 that he had “funding secured” to take the electric carmaker private.
Rupert Murdoch has scrapped a proposal to combine Fox Corp with News Corp, in a deal that would have reunited the media empire he split nearly a decade ago.
Rishi Sunak should encourage the Conservative party chair, Nadhim Zahawi, to resign because his position is untenable, a former Tory cabinet minister has said.
David Gauke and the Conservative peer Lord Hayward urged Zahawi to consider his position as he comes under increasing pressure over his tax affairs, with Sunak braced for a grilling at prime minister’s questions.
And our full take on the Microsoft problems with Teams and Outlook:
Microsoft is investigating an outage that has hit users of its products worldwide including Teams and Outlook.
The US tech firm said it was investigating “issues impacting multiple Microsoft 365 services”, referring to a suite of products that includes its Teams messaging and videoconference service, Outlook email and word and excel programmes.
Microsoft 365 products have millions of users worldwide and on Wednesday morning thousands of them reported outages on Downdetector, a site that registers problems with tech products. They included users in the UK, the US, Australia and Brazil highlighting problems not only with 365 programs but also the gaming service Xbox Live and Microsoft’s cloud computing business Azure. In the UK, outage reports appeared to peak at about 8am GMT.
Updated
Here is our full story on easyJet:
EasyJet has lauded a surge in record bookings in January as passengers prioritised travel for the coming year amid signs airlines are finally recovering from the pandemic downturn.
Despite the continuing cost of living crisis in the UK and abroad, the airline said current high levels of demand and strong bookings meant it expected to beat market expectations for its profits this year.
Manchester airport gets final £450m investment for expansion
Manchester hosts the convention of the north today, where Michael Gove, secretary of state for levelling up, housing and communities, and Lisa Nandy, Labour’s shadow levelling up secretary, will speak later. It’s a gathering of northern business, political and civic leaders to discuss the opportunities and challenges facing the north.
A report from the think tank IPPR North put the UK 35th out of 38 OECD developed economies for investment, spending 17% of GDP. The north of England on its own would come second to bottom.
Ken O’Toole, deputy chief executive of Manchester Airports Group, which runs Manchester, London Stansted and East Midlands airports, announced a private investment of £450m in Manchester airport today.
It’s the final phase of a £1.3bn project to expand its second terminal, allowing the airport to close its ageing terminal 1, which has been operating since 1962. By April 2025, 80% of passengers are expected to pass through the new terminal, O’Toole said.
The terminal investment means Manchester will be handling 45m passengers a year, but it hopes that further out the two-runway airport will be handling 60m passengers a year. This would more than double the current number of passengers, and amount to three quarters of the total at London Heathrow airport.
Speaking on BBC radio 4’s Today programme, O’Toole said:
The findings of that [IPPR North] report confirm the underinvestment in transport across the north and it mirrors our calls for delivery of HS2 and Northern Powerhouse rail which will stimulate improved connectivity right across the north.
It’s clear that transport is a key driver of connectivity and connectivity will drive economic growth. We’ve been talking levelling up and we’ve been talking about improved connectivity for many years now. What we need to see is a firm commitment to those key infrastructure plans and equally a firm commitment to the funding of those infrastructure plans.
If government are serious about the levelling up agenda which they claim to be, then making those commitments to critical transport investments is a key action and a key deliverable that government can demonstrate to the northern population.
Updated
Amazon: Warehouse strike will have 'zero impact' on customers
Amazon said its customers would not be affected by the strike at the Coventry warehouse near Birmingham airport, known as BHX4. It is not a centre that directly services customer orders, but provides stock to UK fulfilment centres.
The company claimed that normal operations are continuing at the warehouse and across its UK network. It said in a statement:
A tiny proportion of our workforce is involved. In fact, according to the verified figures, only a fraction of 1% of our UK employees voted in the ballot - and that includes those who voted against industrial action.
We appreciate the great work our teams do throughout the year and we’re proud to offer competitive pay which starts at a minimum of between £10.50 and £11.45 per hour, depending on location. This represents a 29% increase in the minimum hourly wage paid to Amazon employees since 2018.
Employees are also offered comprehensive benefits that are worth thousands more—including private medical insurance, life assurance, subsidised meals and an employee discount, to name a few.
A fifth of workers at the Coventry warehouse – 300 out of 1,500 – are members of the GMB union and expected to strike today, according to the union. Senior organiser Amanda Gearing said this morning that more were joining the union and the industrial action because they don’t want to cross picket lines.
Updated
German business morale improves in January
In Germany, business morale brightened this month, as Europe’s biggest economy began the new year with easing inflation and an improved economic outlook.
The Ifo Institute said its business climate index rose to 90.2 points in January from 88.6 in December.
Confidence improved in both manufacturing and the service sector, according to Clemens Fuest, the Ifo president. In manufacturing, companies said their current situation had improved along with their expectations for the next six months. Order volumes are still declining, but production is set to increase in the months ahead.
While service firms were less pessimistic about the months ahead, they said their current business was performing less well, in particular in transport and logistics, and hospitality.
Optimism improved notably in trade while confidence in construction rose only slightly.
Updated
Microsoft investigating issues with Teams and Outlook
Microsoft said it was investigating problems impacting some of its services, after the messaging system Teams and email platform Outlook went down for users around the world.
The service status monitoring website Downdetector recorded thousands of users reporting problems with Outlook, Microsoft 365 and XBox Live on Wednesday morning.
The site had detected 4,132 incidents of people complaining of outages on Outlook in the UK as of 7.54am on Wednesday, while 1,971 complaints of Microsoft Teams outages had been reported by just after 8.10am.
Microsoft 365 Status, an account showing updates on Microsoft 365 service incidents, tweeted:
We're investigating issues impacting multiple Microsoft 365 services. More info can be found in the admin center under MO502273.
— Microsoft 365 Status (@MSFT365Status) January 25, 2023
We've identified a potential networking issue and are reviewing telemetry to determine the next troubleshooting steps. You can find additional information on our status page at https://t.co/pZt32fOafR or on SHD under MO502273.
— Microsoft 365 Status (@MSFT365Status) January 25, 2023
Gloomier UK growth outlook leaves black hole in budget – report
The government’s spending watchdog has warned that Britain’s prospects for growth have worsened, and that it would revise its forecasts down.
In a private submission to the Treasury, the Office for Budget Responsibility told the chancellor, Jeremy Hunt, that it overestimated the prospects for medium-term economic growth and would lower them, the Times reported.
The downgrade would wipe out the government’s £9.2bn headroom in Hunt’s autumn statement in November, leaving little room for tax cuts or other measures as he prepares for his spring budget on 15 March.
Yesterday, figures from the Office for National Statistics showed that UK government borrowing more than doubled in December to £27.4bn, the highest December figure on record, largely because of spending on energy support schemes and higher debt interest payments (also at a record). Economists said big budget giveaways looked unlikely as a result.
Victoria Scholar, head of investment at interactive investor, has looked at the Amazon strike.
Amazon workers are staging their first ever UK walkout today in Coventry in a dispute between members of the GMB Union and the tech giant over pay and conditions. Workers want to be paid £15 an hour and are currently offered between £10.50 and £11.45 depending on location. Amazon employees are adding to the slew of worker walkouts across the UK in many industries as inflation eats away at take-home pay. In August, Amazon offered workers a measly 50p per hour pay increase. The two sides are in a stalemate with workers struggling with the cost-of-living crisis which is reaching boiling point, while Amazon has been trying to slim down its costs with little desire to increase them.
While Amazon fared extremely well during the pandemic thanks to the e-commerce boom and surge in parcel deliveries, the return to physical stores post covid along with soaring inflation meant 2022 was a tough year for tech all round. Earlier this month CEO Andy Jassy said he was planning to axe around 18,000 jobs to weather the tough economic times, a move that has helped to instil confidence among investors, reflected by its shares which are up by more than 12% year-to-date in stark contrast to last year’s slide.
Updated
Market summary
In financial markets, moves are muted in early trading. The FTSE 100 index is unchanged at 7,760 while Germany’s Dax and France’s CAC edged up 0.1%, Italy’s FTSE Mib slipped nearly 0.1% and Spain’s Ibex is down 0.2%.
EasyJet shares jumped more than 7% after the airline reported strong bookings in January and said it would beat profit expectations for 2023. It said it had seen the return of the traditional January boom in bookings, hitting record numbers on several days, as customers booked flights and package holidays for the months ahead and this summer.
The pound is slightly lower against the dollar at $1.2326 and against the euro at €1.1320.
Amanda Gearing, GMB senior organiser, was asked whether Amazon is able to attract care home or NHS workers (who are also on low pay) by offering sign-on bonuses, even for temporary work.
She said:
If you talk to Amazon workers, they are being attracted to work elsewhere. It’s not a place where you work for very long. They work you really hard. It’s a pressure cooker environment in there. They’re using computers to assess the targets and workers don’t know what the targets are.
I can’t see workers wanting to come from care homes and other places to work for Amazon I’m afraid.
Updated
Introduction: Warehouse staff in Coventry stop work in UK's first Amazon strike
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Amazon workers at a warehouse in Coventry will strike over pay today, the first time the e-commerce giant has faced industrial action in the UK.
The GMB union, which has organised the strike, expects about 300 staff out of 1,500 at the site to take part.
Amanda Gearing from GMB, who is leading the strike, has been on radio 4’s Today programme. Speaking from the picket line, she said more workers were joining the strike and the union, and called on Amazon (which does not recognise the GMB union) to come to the negotiating table.
They should be listening to their workers and their workers are asking them to give them better pay, terms and conditions and get around the table with the union.
The warehouse workers are asking for a pay rise to £15 an hour from £10.50 (they were given a 50p rise in August), she said.
They just can’t live on that I’m afraid. £15 would mean that they are able to pay their bills. We’ve got the biggest cost of living crisis in decades and people are having to choose between heating their homes and eating. It’s not good enough. Not from someone like Amazon that got billions and billions of pounds of profits during the pandemic.
Gearing said workers at other Amazon warehouses in the UK might follow suit. The US company has 70,000 workers here.
Coventry might be the start of it but it won’t be the finish. We think people are watching on. We know there are workers at other centres that feel exactly the same and they are just waiting to see what happens.
There were several unofficial wildcat strikes across Amazon’s UK warehouses last August, when hundreds of workers staged spontaneous walkouts, sit-ins and work slowdowns in protest over pay, but this is the first balloted industrial action.
Factory gate inflation in the UK has slowed further, according to the latest data from the Office for National Statistics. This will eventually feed into consumer price inflation.
Producer input prices (costs like raw materials) rose by 16.5% in the year to December, down from 18% in the year to November, and 20.2% in the year to October. Factory gate prices rose at at an annual rate of 14.7% in December, down from 16.2% in November.
In more bad news for the embattled US tech sector, Microsoft gave a gloomy outlook last night, with revenue growth slowing in several areas including its cloud computing service Azure, despite releasing better-than-expected results. The electric carmaker Tesla will report fourth-quarter results later today.
Asian shares rose to seven-month highs but later gave up much of their gains, while the Australian dollar hit multi-month highs after inflation in the country rose to 7.8% in the fourth quarter from 7.3%.
The Agenda
9am GMT: Germany Ifo business climate for January (forecast: 90.2)
12pm GMT: US MBA Mortgage applications for week of 20 January
3pm GMT: Bank of Canada interest rate decision (forecast: 25bps rise to 4.5%)
Updated
