What’s going on:
The wave of strikes that have flooded the UK are having a heavier impact on the economy than initially anticipated, and the repercussions are set to go on as health and teaching unions create plans for industrial action which could last until the end of the year.
Why it matters:
Many economists maintain that the short-term turmoil resulting from strikes won’t alter the trend of an economy that is performing better than expected, but it’s hard to be certain.
Even though the majority of economists don’t agree with the chancellor’s statement that higher public sector wages will cause inflation, they say that the bigger concern is the unresolved recruitment and retention dilemma, which is degrading the capacity of the NHS and educational system.
This dilemma is due to many factors, but pay and health are some of the biggest issues.
How it’ll impact the future:
The Bank of England governor, Andrew Bailey, has warned that the rise in economic inactivity due to ill health could be the spark to ignite inflation and thus lead to an increased rate of interest.
This could have severe long-term repercussions on the economy, seeing as the deteriorating health of the population is causing more people to stay unemployed, according to the FT.
