Network Rail boss calls for ‘touching distance’ deal as five days of strikes begin – Business Live

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Huw Howells, head of manufacturing and industrials for corporate and institutional banking at Lloyds Bank, said:

Manufacturers start 2023 on somewhat uncertain ground as December shows a fifth month of contraction.

There are positives in the supply chain, but there are still unknowns for 2023, making forecasting difficult as manufacturers balance demand and supply.

Inflation remains high and there are concerns that further price increases could dampen demand.

Manufacturers are making the most of a growing, if erratic, supply of semiconductors, and the price of shipping containers is back to near pre-pandemic levels. Companies also hope that China’s zero-Covid policy could smooth out supply outside the country.

The cost of energy remains a major unknown with continued uncertainty over the government’s energy bill relief plan once it ends in March.

UK manufacturing slump worsens in late 2022

UK manufacturing ended 2022 on a weak base, with output, new orders and employment falling at a faster pace.

The S&P Global / CIPS UK manufacturing purchasing managers’ index fell to a 31-month low of 45.3 in December, down from 46.5 in November but above the previous flash estimate of 44, 7. It suggests that manufacturing has been declining for five months.

Excluding the lows recorded during the first pandemic lockdown, the PMI reading is one of the weakest since mid-2009.

UK Dec PMI manufacturing final at 45.3 (EZ equivalent was 47.8 days): a significant drop in overseas orders

Production has contracted at one of the fastest rates in 14 years

— Joumanna Nasr Bercetche 🇱🇧 (@CNBCJou) January 3

Shares, oil rise, while the pound falls

In the markets, stocks are rising. London’s FTSE 100 advanced 2.2% to 7,613 in its first trading day of the year, hitting its highest level since June, as energy shares Shell and BP rose.

Germany’s Dax has gained 1.4% ahead of lunchtime inflation data, France’s CAC is ahead 1.3% and Italy’s FTSE MiB has gained 1 .5%

Oil reversed earlier declines and is now trading higher, with global benchmark Brent crude up 33 cents, or 0.4%, at $86.23 a barrel, while US light crude advanced 0.5% to $80.64 a barrel.

The pound lost 0.9% against the dollar to $1.1934, but was up 0.1% against the euro at €1.1311.

Updated at 09.47 GMT

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.

Updated at 09.50 GMT

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.