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UK PM Sunak has weak hand on strikes and should settle, economists say

Two senior economists warned the UK government is fighting a losing battle with unions over public-sector pay that will only extend strikes and delay wage inflation because the bargaining position of workers is too strong.
Charles Goodhart, a former Bank of England policy maker and professor at the London School of Economics, said politicians will condemn the UK not just to a “winter of discontent” reminiscent of the 1970s but “a year of discontent unless they agree a wage deal to end the ongoing industrial action.”
Savvas Savouri, chief economist at Toscafund Asset Management, said the government is “delusional if it believes it has “a strong hand against whichever union happens to be their adversary.
The views from the economists also feed into the debate about how to bring inflation under control after it jumped to a 41-year high of 11.1 percent.
The Bank of England has raised its benchmark lending rate to 3 percent last month and is expected to move again next week and in February to prevent a wage-price spiral. It’s called on employers to restrain pay demands, embedding the tightest cost-of-living squeeze on record.

Prime Minister Rishi Sunak’s position is unusually weak. After key workers were applauded for their service during the pandemic following years in which their pay had fallen behind the private sector, the public is sympathetic to the strikers’ demands. Also more than 600,000 workers have dropped out of the labor market since the pandemic, leaving employers struggling to fill vacancies.
Strikes are planned for every day until Christmas, with nurses, ambulance staff, teachers, rail and postal workers demanding pay rises to match inflation. They argue they’re seeing real-terms pay cuts after more than a decade of restraint.
UK commuters face disruptions as bus strikes begin in south, west London
The government has agreed 5 percent pay rises on average for public-sector workers, below the 6.8 percent average across the private sector, in an attempt to prevent a wage-price spiral and because the public finances are in a precarious state. Every 1 percent increase in public sector pay costs roughly £2.5 billion ($3 billion).
If the strikes continue, Savouri said the economy will suffer further supply shocks and staff shortages, and in itself will fan the pricing pressure that the government and Bank of England are trying to prevent.
“Wage growth will prove more stubborn, and so too inflation,” he said.
Similarly, Goodhart said the tide cannot be held back. The government’s stance “is not going to succeed, and it’s not going to last,” he told the Bank of England Watchers conference last week. A “public sector wage explosion is inevitable by 2025 at the very latest.”
Part of that is because government workers for years have been falling further behind their counterparts in the private sector on wages and pay raises.
Nurses in Britain prepare for unprecedented strike over pay
The government may well have to give way to fill vacancies, especially in the National Health Service, which is suffering chronic staff shortages. Pay restraint over the past decade has taken its toll on the ability of public services to retain staff.
In a note published Monday, Savouri said private employers are paying up “through gritted teeth and urged the government to follow suit.
The state should offer an 8 percent to 10 percent pay rise this year tied to a deal over the subsequent four years for a total increase across the five years of around 18 percent, he said. The arrangement would effectively mean fixing pay rises from 2 percent- 2.5 percent from 2024 to 2027.
His proposal would cost the government an extra £7.5 billion ($9 billion) to £12.5 billion (15.1 billion) this year, which is roughly the same as the extra headroom against its fiscal rules created by lower projected interest rates since the November autumn statement.
80% of Britain's trains expected to be cancelled due to strike
The Treasury declined to comment but pointed to cabinet minister Nadhim Zahawi’s statement to Sky News on Sunday.
“If you chase inflation — or above inflation — pay rises, then you embed inflation for longer and hurt the most vulnerable. This is not the time to strike but to negotiate,” he said.
Ministers have asked the independent Pay Review Bodies to make recommendations for next year’s awards, which will be announced in the summer.
A generous upfront deal would end economically damaging strikes and help ease labor shortages by “encouraging European Union nationals with settlement status who departed our shores at the onset of COVID lockdowns to return,” Savouri argued.
“The reality is we need to see a noticeable one-off rise in the wage level to quickly inject a fresh supply of workers into the UK,” Savouri said.
“This would deliver a host of disinflationary benefits, not least stopping supply-restricting – and thus inflation fueling – strike action.”
Goodhart said the government’s determination to pin down public sector pay was a “form of prices and incomes control” that is causing “all kinds of mayhem” – a combination of declining recruitment, worsening services and increasing industrial strife.
“The pressures imposed are so great there is going to have to be a public sector wage explosion, certainly no later than the next general election when the incoming government is going to have to rectify the distortions that are already there.”
The government must call an election by January 2025 at the latest.
Source: alarabiya
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BENEFIT AGM approves 10%...
- March 27, 2025
BENEFIT, the Kingdom’s innovator and leading company in Fintech and electronic financial transactions service, held its Annual General Meeting (AGM) at the company’s headquarters in the Seef District.
During the meeting, shareholders approved all items listed on the agenda, including the ratification of the minutes of the previous AGM held on 26 March 2024. The session reviewed and approved the Board’s Annual Report on the company’s activities and financial performance for the fiscal year ended 31 December 2024, and the shareholders expressed their satisfaction with the company’s operational and financial results during the reporting period.
The meeting also reviewed the Independent External Auditor’s Report on the company’s consolidated financial statements for the year ended 31 December 2024. Subsequently, the shareholders approved the audited financial statements for the fiscal year. Based on the Board’s recommendation, the shareholders approved the distribution of a cash dividend equivalent to 10% of the paid-up share capital.
Furthermore, the shareholders endorsed the allocation of a total amount of BD 172,500 as remuneration to the members of the Board for the year ended 31 December 2024, subject to prior clearance by related authorities.
The extension of the current composition of the Board was approved, which includes ten members and one CBB observer, for a further six-month term, expiring in September 2025, pending no objection from the CBB.
The meeting reviewed and approved the Corporate Governance Report for 2024, which affirmed the company’s full compliance with the corporate governance directives issued by the CBB and other applicable regulatory frameworks. The AGM absolved the Board Members of liability for any of their actions during the year ending on 31st December 2024, in accordance with the Commercial Companies Law.
In alignment with regulatory requirements, the session approved the reappointment of Ernst & Young (EY) as the company’s External Auditors for the fiscal year 2025, covering both the parent company and its subsidiaries—Sinnad and Bahrain FinTech Bay. The Board was authorised to determine the external auditors’ professional fees, subject to approval from the CBB, and the meeting concluded with a discussion of any additional issues as per Article (207) of the Commercial Companies Law.
Speaking on the company’s performance, Mr. Mohamed Al Bastaki, Chairman BENEFIT , stated: “In terms of the financial results for 2024, I am pleased to say that the year gone by has also been proved to be a success in delivering tangible results. Growth rate for 2024 was 19 per cent. Revenue for the year was BD 17 M (US$ 45.3 Million) and net profit was 2 Million ($ 5.3 Million).
Mr. Al Bastaki also announced that the Board had formally adopted a new three-year strategic roadmap to commence in 2025. The strategy encompasses a phased international expansion, optimisation of internal operations, enhanced revenue diversification, long-term sustainability initiatives, and the advancement of innovation and digital transformation initiatives across all service lines.
“I extend my sincere appreciation to the CBB for its continued support of BENEFIT and its pivotal role in fostering a stable and progressive regulatory environment for the Kingdom’s banking and financial sector—an environment that has significantly reinforced Bahrain’s standing as a leading financial hub in the region,” said Mr. Al Bastaki. “I would also like to thank our partner banks and valued customers for their trust, and our shareholders for their ongoing encouragement. The achievements of 2024 set a strong precedent, and I am confident they will serve as a foundation for yet another successful and impactful year ahead.”
Chief Executive of BENEFIT; Mr. Abdulwahed AlJanahi commented, “The year 2024 represented another pivotal chapter in BENEFIT ’s evolution. We achieved substantial progress in advancing our digital strategy across multiple sectors, while reinforcing our long-term commitment to the development of Bahrain’s financial services and payments landscape. Throughout the year, we remained firmly aligned with our objective of delivering measurable value to our shareholders, strategic partners, and customers. At the same time, we continued to play an active role in enabling Bahrain’s digital economy by introducing innovative solutions and service enhancements that directly address market needs and future opportunities.”
Mr. AlJanahi affirmed that BENEFIT has successfully developed a robust and well-integrated payment network that connects individuals and businesses across Bahrain, accelerating the adoption of emerging technologies in the banking and financial services sector and reinforcing Bahrain’s position as a growing fintech hub, and added, “Our achievements of the past year reflect a long-term vision to establish a resilient electronic payment infrastructure that supports the Kingdom’s digital economy. Key developments in 2024 included the implementation of central authentication for open banking via BENEFIT Pay”
Mr. AlJanahi concluded by thanking the Board for its strategic direction, the company’s staff for their continued dedication, and the Central Bank of Bahrain, member banks, and shareholders for their valuable partnership and confidence in the company’s long-term vision.
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