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Wednesday's Business and Politics round-up

14 Aug 2019

Person sat at a table reading a newspaper

Good morning!

Kangaroos have been spotted appearing to enjoy rare snowfall in New South Wales. 

Meteorologists have called the current cold snap in Australia one of its coldest in years. 

But it has been disruptive, causing flight cancellations and power cuts affecting about 10,000 homes. 



The morning's top stories, rounded up for your convenience. 

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Movement of labour

Figures released by the Office for National Statistics yesterday show the unemployment rate increased to 3.9%, prompting concern that the UK’s ‘jobs miracle’ could be nearing an end. 
 
Unemployment went up by 31,000 in the three months to June, an increase of 0.1%. It brings the total number of unemployed in the UK to 1.3 million. Productivity fell by 0.6%, while wage growth rose to 3.9%.   
 
Matt Hughes, ONS deputy head of labour market statistics, said "Employment continues to increase, with three-quarters of this year's growth being due to more women working. "However, the number of vacancies [is lower] now than there were this time last year"
 
Reacting to the news, IoD Chief Economist Tej Parikh said the labour market “may now be reaching its peak”. He explained that “while competition has pushed up salaries, thin margins and low productivity may set a ceiling for pay growth”. 
 
Tej cautioned that policymakers should not be “lulled into a false sense of confidence” and added firms trying to access talent would benefit from more training courses and a flexible immigration system which meets their needs.

Hamm-er it home 

The former Chancellor Philip Hammond has used an op-ed in the Times to say there is no public mandate for a no-deal Brexit. He argues that to say that Leave voters were told of the realities of a no-deal outcome before the referendum is “a total travesty of the truth”. 
 
In a reference to Number 10 adviser Dominic Cummings, Hammond explains that Boris Johnson risks betraying the referendum result by allowing “unelected people” determined to push through a no-deal “pull the strings” of his government. 
 
Hammond warns the Prime Minister that there is no mandate for leaving the EU without a deal and parliament will “make its voice heard”. Similarly, Commons Speaker John Bercow said yesterday that he would “fight with every breath” to stop Johnson bypassing MPs. 
 
The Times says Hammond and other former cabinet ministers are part of a “rebel alliance” intent on stopping a no-deal Brexit when parliament returns from recess next month. Hammond has previously ruled out voting against the government to halt that outcome. 
 
A senior source in Downing Street said “Hammond actively undermined the government’s negotiating position by frustrating and obstructing preparation to leave the EU. Everyone knows that the ex-Chancellor’s real objective was to cancel the referendum result”. 

One track mind

Rail prices are set to increase once again in January, based on the Retail Price Index inflation measure for July which will be announced today. Experts anticipate the rise will be about 2.8% which could mean a £100 increase in the yearly cost of commuting for some Britons. 
 
But the Campaign for Better Transport has been calling for the rate rise to be based on the Consumer Prices Index, which is typically lower than RPI and last month came in at 2%. The CBT has said the predicted ticket prices are “exorbitant”. 
 
Rail Minister Chris Heaton-Harris said "It's tempting to suggest fares should never rise. However, the truth is that if we stop investing in our railway then we will never see it improved”. 
 
Meanwhile, the TUC trade union has renewed its call for UK railways to be renationalised, arguing this would result in lower ticket prices. It notes UK commuters pay the highest ticket prices in Europe and the government should not be “subsidising private train companies”. 
 
At the beginning of this year train fares rose by an average of 3.1% in England and Wales and 2.8% in Scotland. The increase in the former was the highest since January 2013 and meant some annual season tickets shot up by more than £100.  


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