‘Companies in the UK’s private sector have been downsizing their workforce at the fastest rate since the global financial crisis, apart from the Covid-19 pandemic lockdowns, as output fell in September, according to data published by S&P Global.

The latest flash S&P Global Composite Purchasing Managers’ Index (PMI) figure for the UK slipped to 46.8, down from 48.6 in August, and reached a 32-month low. The reading was well below the 50-mark, which separates growth from contraction, and lower than economists expected, S&P said.

“The disappointing PMI survey results for September mean a recession is looking increasingly likely in the UK,” Chris Williamson, chief business economist at S&P Global Market Intelligence, warned.

“The steep fall in output signaled by the flash PMI data is consistent with GDP contracting at a quarterly rate of over 0.4%, with a broad-based downturn gathering momentum to hint at few hopes of any imminent improvement.”

The British jobs market is facing an “abrupt turnaround,” prompting companies to shed staff at the fastest pace since the aftermath of the 2008 global financial crisis, excluding the pandemic, S&P said.

“A major concern in the inflation outlook has been wage growth, but with the survey now signalling the sharpest fall in employment since 2009, wage bargaining power is being eroded rapidly,” Williamson added.

Overall, private sector business activity in the UK fell at the fastest rate since March 2009 as the cost-of-living crisis and surging borrowing costs dented demand, S&P concluded.

The British economy will shrink in both 2023 and 2024, The Guardian reported citing a study by the Washington-based Peterson Institute for International Economics (PIIE).

According to the report, persistent inflation, falling real incomes of low-income households, and a shortage of workers will result in a 0.3% drop in the country’s gross domestic product (GPD) this year, and a further 0.2% backslide next year.

“The UK won’t be in recession all of next year, but the recovery will be held back by higher-than-expected inflation and in response, the Bank of England will need to keep interest rates higher for longer,” PIIE president Adam Posen told The Guardian, commenting on the report.

Posen, who used to work on the Bank of England’s monetary policy committee, noted that the UK economy is also still weighed down by the after-effects of Brexit and will likely suffer from planned cuts to government spending next year.

Last week, the central bank refrained from hiking interest rates for the first time in nearly two years after a surprise drop in inflation in August to 6.7% amid weaker growth in food prices and a reduction in accommodation and air travel costs. However, UK inflation remains the highest among G7 economies.

Posen warned that more rate hikes are possible in the coming months if inflation doesn’t slow further. Karen Dynan, a co-author of the report, mirrored the institute’s warning and said it does not apply to the UK alone.

“While inflation appears to be receding in most countries, it remains decidedly above central bank targets. As a result, most central banks will need to keep their policy rates high over the coming year, with the resulting tight financial conditions holding back demand and slowing economic activity,” she stated.’

 WSM Meeting today at 1930 (1830ut) on ZOOM.

Speaker: Howard Moss

 The following talks have been added to the Audio section of the website,.

‘Enough is Enough’ is Not Enough – by Alan Johnstone, 3rd February 2023

War! What is it Good For? – by David Coggan, 17th February 17 2023

What’s in a Name? – by Glenn Morris, 24th February 2023

The Rewards of Competition – by Richard Field, 17th March 2023

Sustainability Before and After the Revolution – by John Cumming, 24th March 2023

Why Should the Earth Be Privately Owned? – by Adam Buick, 19th May 2023

Degrowth – by Paul Bennett, 26th May 2023

Statistics – How They Are Used In Capitalism and How They Could Be Used in Socialism – by Richard Botterill, 7th July 2023

Work: Paid and Unpaid – by Howard Moss, 23rd July 2023

Look Forwards

History as yet unmade shall be the judge

Of present intentions, whither they pave

A destination either good or grave,

It is not enough to hold an image

Of what might be, but then not realise

It in reality. This world won’t change

Unless people decide to rearrange

Their situation from that which denies

Free access for all to what is needed

For lives to be lived well as possible,

A worldwide commonwealth to enable

Human potential to have succeeded.

This present is merely the passing sum

Of what’s been: look forwards to what’s to come.

D. A,  

‘A new analysis by the Economic Policy Institute shows that top U.S. CEOs saw their total compensation rise by 1,209% between 1978 and 2022 while typical worker pay rose just 15%—a chasm that is fuelling the United Auto Workers strike and other labour actions across the country.

EPI’s Josh Bivens and Jori Kandra found that the CEOs of the 350 largest publicly traded companies in the U.S. made 344 times more than a typical worker last year. In 1965, by contrast, the CEO-to-typical-worker pay gap was 21 to 1.

“Top CEO compensation grew roughly 28.1% faster than stock market growth during this period and far eclipsed the slow 15.3% growth in a typical worker’s annual compensation,” Bivens and Kandra noted in their report was released late last week.

The analysis came as the UAW expanded its strikes against General Motors and Stellantis, accusing the auto giants of refusing to engage seriously with the union in contract negotiations.

UAW president Shawn Fain has repeatedly pointed to he exorbitant and rising compensation packages of GM CEO Mary Barra—who made $29 million last year—and other executives as evidence that the companies have chosen to prioritize enriching their leaders even as worker pay stagnates.

The UAW is demanding a 36% wage increase for auto workers in the new four-year contract. Between 2013 and 2022, the CEOs of the Big Three U.S. car manufacturers received a 40% pay boost.

As The Associated Press noted earlier this month, “Fain’s focus on CEO pay is part of a growing trend of emboldened labour unions citing the wealth gap between workers and the top bosses to bolster demand for better pay and working conditions.”

“In June, Netflix shareholders rejected executive pay packages in a non binding vote, just days after the Writers Guild of America wrote letters urging investors to vote against the pay proposals, saying it would be inappropriate amid Hollywood’s ongoing strike by writers,” AP reported. “The WGA wrote similar letters targeting the executive pay at Comcast and NBCUniversal.”

Bivens and Kandra stressed in their analysis that surging CEO pay “is not just a symbolic issue—it has contributed to rising inequality.”

“CEOs are getting paid more because of their leverage over corporate boards, not because of contributions they make to their firms,” they wrote. “Escalating CEO pay in recent decades has likely pulled up the pay of other top earners. This concentration of earnings at the top leaves fewer gains for ordinary workers.” ‘

https://www.commondreams.org/news/ceo-worker-pay

‘Germany’s GDP is expected to shrink by 0.5% this year as the EU’s largest economy continues to struggle with an energy crisis and higher interest rates, the IMK institute reported on Tuesday.

The IMK’s forecast of 0.7% GDP growth for 2024 is also significantly more pessimistic than its spring projection of 1.2%. Other German economic institutes such as the Ifo expect GDP growth of 1.4% for 2024.

“The German economy, weakened by energy price shocks, will not really get going in the coming months, because high interest rates and a subdued global economy are putting the brakes on,” the IMK stated.

The report predicted that private consumption will recover from the end of the third quarter due to declining inflation and stronger wage increases. “This positive development comes so late that it can only somewhat mitigate the recession in 2023 as a whole, not prevent it,” the IMK noted.

Germany officially slipped into a technical recession in the first quarter of the year as GDP growth was revised from zero to -0.3%. The Bundesbank announced last week that the economy was likely to shrink this quarter thanks to slow private consumption and the increasing weakness of industry.

Deutsche Bank CEO Christian Sewing previously warned that Germany could once again be called the ‘Sick Man of Europe’ if structural economic issues are not addressed immediately.’

Companies in the UK’s private sector have been downsizing their workforce at the fastest rate since the global financial crisis, apart from the Covid-19 pandemic lockdowns, as output fell in September, according to data published by S&P Global on Friday.

The latest flash S&P Global Composite Purchasing Managers’ Index (PMI) figure for the UK slipped to 46.8, down from 48.6 in August, and reached a 32-month low. The reading was well below the 50-mark, which separates growth from contraction, and lower than economists expected, S&P said.

“The disappointing PMI survey results for September mean a recession is looking increasingly likely in the UK,” Chris Williamson, chief business economist at S&P Global Market Intelligence, warned.

“The steep fall in output signalled by the flash PMI data is consistent with GDP contracting at a quarterly rate of over 0.4%, with a broad-based downturn gathering momentum to hint at few hopes of any imminent improvement.”

‘The British jobs market is facing an “abrupt turnaround,” prompting companies to shed staff at the fastest pace since the aftermath of the 2008 global financial crisis, excluding the pandemic, S&P said.

“A major concern in the inflation outlook has been wage growth, but with the survey now signalling the sharpest fall in employment since 2009, wage bargaining power is being eroded rapidly,” Williamson added.

Overall, private sector business activity in the UK fell at the fastest rate since March 2009 as the cost-of-living crisis and surging borrowing costs dented demand, S&P concluded.’

Boom and bust

‘It might be worthwhile reminding ourselves of what all this boom and bust actually means. In a capitalist society, the whole power of the state’s propaganda machine – press, radio, television, pulpits, government pronouncements, everything – is geared to one all-encompassing end: that the inescapable fate of the working class is to spend their entire working lives labouring for the benefit of the owning class. When nearly all the work force has knuckled down to this unavoidable destiny, it is called a boom. But every so often problems occur in the smooth functioning of this system; and they have occurred every so often ever since we’ve had capitalism. And when that happens, large numbers of the working class, despite having been brainwashed from early childhood into believing that there is no way to run society other than producing surplus value for the owning class – large numbers of them are then told they will not even be allowed to fulfil this divine decree, to work for the capitalists. On the one side, the work is obviously there to be done – food must be produced, clothing must be made, houses must be built – and all the raw materials are there, ready and waiting, or easily able to be produced. And on the other side, there are people desperately wanting to eat food, and to protect themselves from the weather with clothing and houses and so on: but where the owning class cannot see exactly how to make a profit out of it, then nobody is allowed to grow the food, make the clothes, build the houses, and all the rest of it. And it’s called a slump.’

From Socialist Standard March 2009

https://socialiststandardmyspace.blogspot.com/2022/03/boom-boom-brown-2009.html

 “Robots can’t replace senior clerics, but they can be a trusted assistant that can help them issue a fatwa in five hours instead of 50 days,” said Mohammad Ghotbi, who heads a state-linked organisation in Qom that encourages the growth of technology businesses.   Iran’s recent history has been characterised by clashes between tradition and modernity. The country’s 200,000 Shia clergy — half of whom are based in Qom — have been the leading force in protecting traditional and religious values.   But with Iran’s leadership facing heightened calls to modernise in the wake of last year’s mass protest movement, the country’s clerical establishment views technology as a way to be seen to be welcoming development while strengthening the Islamic character of the country.    Ghotbi, who leads the Eshragh Creativity and Innovation House, affirmed the approach, arguing that the clergy should not oppose the desire of Iranians to share in global technological advances. “Today’s society favours acceleration and progress,” he said (ft.com, 24 September).

 Once upon a time

 ‘…Muslim women are able to define what feminism is for themselves. They are free political agents who can set the terms of emancipation for themselves…’

Unearthed Collective is a group of artists, curators and neighbours who meet monthly at Studio Voltaire to investigate Clapham’s community and history through the lens of creative practice.