According to CCTV news, local time on September 5, the UK's second largest city Birmingham municipal council announced the city's bankruptcy.
The City of Birmingham will stop all new spending, except for statutory services such as protecting vulnerable people. The Birmingham City Council bankruptcy was linked to the £ 0.76 billion (6.84 billion yuan) bill to settle equal pay claims.
According to the Global Times, citing the Financial Times, Birmingham City Council issued a notice announcing that this year has been unable to balance its accounts, and it has become the latest and largest in the UK to declare itself actually bankrupt.
As costs rise, inflation soars and revenues fall, England and Wales's local authorities are facing increasing fiscal pressure.
Birmingham has a population of 1.1 million. The city's council announced last month that it faces a budget shortfall of £ 87.4 million in 2023-2024 and £ 0.1648 billion in 2024-2025.
British strike "climax" continues
According to CCTV news, in order to protest against high inflation, local time from September 1 to 2, the UK about 20000 railway employees again on strike, which is just the British industry strike "climax" in a microcosm.
Railway workers strike, the British London circle "weekend economy" was "stalled"
On September 1 and 2,, in protest against high inflation, the British Train drivers' Union and the National Union of British Rail, Maritime and Transport Workers went on strike. It is reported that if the salary negotiations are still no progress, the relevant union members will continue to strike.
Mick Whelan, secretary general of the United Union of British train drivers and stokers, said in an exclusive interview with CCTV that since 2019, the real income of most train drivers has stagnated, while rising prices have reduced their income. The inaction of the current British government is the main cause of high inflation in the UK.
Affected by the strike, the British South West Railway company most of the train suspension.
London Waterloo Station is the hub station of the British Southwest Railway Company. The short-distance commuter trains from London to the southwest of the United Kingdom basically depart from here. On average, about 270000 passengers arrive or depart here every day. Almost all trains were canceled during the strike, and Waterloo station, one of London's busiest railway stations, now looks particularly deserted.
this year, British rail workers have been on strike on weekends. The suspension of trains caused by the railway strike a week ago caused a "cold reception" at the carnival in the tourist city of Portsmouth, more than 100 kilometers from the capital London ". Last year, the Portsmouth Carnival attracted 170000 people.
From the beginning of this year, the normalization of the railway workers weekend strike, the London metropolitan area and the surrounding urban residents weekend travel a lot of inconvenience, "weekend economy" suffered heavy losses.
According to the 2020 data released by the Office for National Statistics, the City of London accounts for only 0.65 per cent of the UK's area and 13.42 per cent of the population, but it creates 23.37 per cent of the UK's GDP, close to the UK's national 1/4, and is a veritable UK "economic engine". On the other hand, the railway workers went on strike and the commuter railway was almost paralyzed, which brought inconvenience to the people who relied heavily on the railway to travel around the city on weekends, and the "weekend economy" was "stalled".
Energy bills make people miserable
In the past week, the British people are most concerned about the topic: the government announced that the energy price ceiling will be lowered to 1923 pounds (about 17700 yuan) per year.
But even the new price ceiling is still nearly double the level before the Russian-Ukrainian conflict, and last year the government gave households a one-time energy subsidy, which is no longer mentioned this year. With the arrival of September, the problem of heating in autumn and winter has surfaced again, and the poor will face a new round of food and clothing difficulties.
The latest data the Office for National Statistics shows that due to rising prices and energy bills, more and more people cannot afford such high prices, causing many people to become homeless. Statistics show that one out of every 50 Londoners lives on the street, and there is often a family living in a tent on the side of the road.
Data the UK Insolvency Service show that the number of business bankruptcies in England and Wales reached 2163 in June, up 27% year-on-year and higher than during the epidemic, hit by the economic slowdown and high interest rates. Bankruptcy figures were even higher in May, when the year-on-year surge was 40 per cent.
Give the British government a "wake-up call"
Whether it is one strike after another, or still high energy bills, reflect the British government in the Russian-Ukrainian conflict to follow the United States continued to put pressure on Russia, suffered the reverse effect of the British economy continued to pressure the reality of the state.
According to CCTV News, citing the British "Daily Mail" report on August 31, the latest opinion polls show that the opposition Labor Party leads the ruling Conservative Party by 45% to 24%, and the British ruling Conservative Party's public opinion support rate is falling into a historical "trough".
Mick Whelan, general secretary of the United Union of British Train Drivers and Stokers: My experience has made me realize that the Conservative government is a dishonest and disgraceful government. There are 14 million poor people in the UK, 1.5 million destitute people, and our school-age children are starving during non-school hours, and this is happening in the world's sixth-largest economy in the UK.
The British think tank National Economic and Social Research Institute predicts that in the "Brexit", the subsequent impact of the epidemic and the Russian-Ukrainian conflict under the triple impact, the British economy in the next five years will fall into a "low growth trap".
Difficult situation
In view of the UK relative to the euro zone and the United States more severe inflation situation, the Bank of England's interest rate peak or will be higher than the euro zone and the Federal Reserve, the Bank of England is facing a more difficult situation, has not yet released a pause to raise interest rates signal.
compared with the Federal Reserve and the European Central Bank, the Bank of England will go further in raising interest rates, and inflationary pressures in the UK are much higher than those in the euro zone and the United States. Given that the US and European central banks are close to stopping raising interest rates, the probability of future Bank of England interest rate peaks is higher than that of the US and Europe.
for the future, the Bank of England Governor Bailey has previously stressed that monetary policy needs to continue to be restrictive, will not judge how the interest rate track should be, the future will be based on data performance to take corresponding interest rate action. If inflation persists, there will be further tightening of monetary policy.
Kaitou macro chief UK economist Paul Dales said, the Bank of England in the necessary need to "restrictive" interest rates of the hawkish tone shows that the future will not only further interest rate hikes, but also may be at a high level for about a year, the Bank of England seems to have recognized that core inflation needs time to cool down, is expected by the end of 2024 before the interest rate will not be cut.
the current situation in the UK, what are the implications for the market? Xinjie Wang, chief investment strategist at Standard Chartered China Wealth Management, believes that in the medium to long term, the pound still has room to rise against the dollar under the divergence of monetary policy in the UK and the US. Stocks are undermatched to UK stocks. The weaker earnings growth of UK listed companies this year has offset their lower valuations. The 12-month forward earnings per share of the UK stock market is expected to fall by 2.7, which is still the weakest in the major regions.
Source: Ningbo Shipping