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Warehouse staff in Coventry stop work in UK’s first official Amazon strike – business live

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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.

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 two-runway airport could be handling about 60m passengers a year, more than doubling the current number of passengers, and equivalent to three quarters of the total at London Heathrow airport, the Times reported.

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.

A tractor clearing snow at Manchester Airport on 19 January. Photograph: Martin Rickett/PA

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.

Members of the GMB union stand on the picket line as they hold a strike outside the Amazon warehouse in Coventry, Britain, January 25, 2023.
Members of the GMB union stand on the picket line as they hold a strike outside the Amazon warehouse in Coventry, Britain, January 25, 2023. Photograph: Henry Nicholls/Reuters

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.

Production of a Ford Fiesta car on the assembly line in Cologne, Germany.
Production of a Ford Fiesta car on the assembly line in Cologne, Germany. Photograph: Friedrich Stark/Alamy

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 or on SHD under MO502273.

— Microsoft 365 Status (@MSFT365Status) January 25, 2023

Screen grab taken from of graphs showing outages across Microsoft.
Screen grab taken from of graphs showing outages across Microsoft. Photograph:

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.

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.

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%)

Source: The Guardian

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