No 10 attacks ‘selfish and irresponsible’ union over rail strike chaos – live updates

Credit Suisse is said to be considering a fresh round of job cuts after issuing a dire warning on a loss in the second quarter.

The Swiss lender is considering headcount reductions across divisions including investment banking and wealth management in different regions, Bloomberg reports.

Shares slumped as much as 7.6pc. If the losses hold, it will be the bank’s lowest closing price in around three decades.

Credit Suisse this morning warned it expects a loss at a group-wide level and at its investment bank in the second quarter.

The bank has been hit by challenging market conditions in the wake of Russia’s invasion of Ukraine and interest rate rises to tackle inflation.

Credit Suisse has also been grappling with its own crises, including a $5.5bn hit from Archegos, the collapse of partner Greensill Capital and a string of profit warnings.

Petrol prices have surged by more than 2p in just 24 hours as the cost of filling up a full tank of fuel hurtles towards £100.

The average pump price hit 180.73p per litre yesterday, up from 178.50p on Monday, marking the biggest one-day increase in 17 years.

Diesel prices were also up by more than a penny to hit another record high of 186.57p, according to RAC figures.

The latest jump takes the cost of filling up a 55-litre family car to £99.40, with prices set to break through the £100 mark as soon as tomorrow. Diesel drivers are already paying £102.61 to fill up a full tank of fuel.

Simon Williams, RAC fuel spokesperson, said: “These are unprecedented times in terms of the accelerating cost of forecourt fuel. Sadly, it seems we are still some way from the peak.”

The motoring body said Asda had increased its average forecourt price by nearly 5p in a single day. It warned the move would likely spur rival supermarkets, which dominate fuel retailing, to raise their prices as well.

Britain is on the brink of recession as rocketing prices, tax hikes and a shortage of workers derail the recovery from Covid and bring the economy grinding to a halt, the Organisation for Economic Cooperation and Development (OECD) has warned.

Tim Wallace has more details:

Families will be forced to eat into their savings or take on more debt as prices spiral higher than earnings, the economic think tank warned, with inflation rising into double digits later this year because of global supply bottlenecks and energy market turmoil.

Even next year inflation will be more than double the Bank of England’s 2pc target, the OECD said, as the EU’s oil embargo against Russia keeps costs high.

This is part of a major global slowdown. Worldwide GDP will rise by 3pc this year, one-third slower than the OECD predicted in December, before the invasion of Ukraine.

But even before the war, inflation was taking a toll as living costs increased because of the rebound from the pandemic and China’s zero-Covid lockdowns.

The OECD said: “In most OECD economies, real household disposable income was already declining on a year-on-year basis in the last quarter of 2021, despite strong employment growth, and in many that decline is estimated to have continued in the first quarter of 2022.”

​Read Tim’s full story here

In a further sign of weakening demand in the housing market, residential construction work grew at its weakest pace in two years last month.

The latest S&P Global Construction PMI registered 56.4 in May – down from 58.2 in April and the lowest reading for four months.

Weakness in housing activity was the biggest drag on performance, with survey respondents saying subdued consumer confidence and worries about the economic outlook had hit demand.

Higher borrowing costs and intense inflationary pressures were also cited as factors likely to hold back growth over the next 12 months.

Tim Moore at S&P Global said:

May data signalled a solid overall rise in UK construction output as resilience across the commercial and civil engineering segments helped to offset weakness in house building.

Residential construction activity was close to stagnation in May, which represented its worst performance for two years amid signs of softer demand and a headwind from low consumer confidence.

UK house price growth slowed for a third straight month in May in a further sign the cost-of-living crisis is bringing the housing boom to an end.

The average price rose by 10.5pc compared to May last year to hit £289,099 – down from April’s 10.8pc increase and the smallest increase since January.

Prices rose in monthly terms for an 11th consecutive month, up by 1pc in May after a 1.2pc increase in April.

Russell Galley, managing director at Halifax, said a shortage of homes for sale remained the main driver for house prices, despite a tightening cost-of-living squeeze as inflation approaches 10pc.

He added: “However, the housing market has begun to show signs of cooling. Mortgage activity has started to come down and, coupled with the inflationary pressures currently exerted on household budgets, it’s likely activity will start to slow.”

The war of words over the summer travel chaos continues to escalate, with former British Airways boss Willie Walsh launching a fresh salvo on Grant Shapps.

Mr Walsh, who now leads industry body IATA, said the Transport Secretary had been “absolutely useless” in his approach to the pandemic.

Speaking at a conference in Paris, he said Mr Shapps didn’t know what he was talking about when it came to aviation, adding: “Since the beginning of the pandemic, as minister of transport, he’s done nothing for the industry.”

The airline lobbyist admitted there’d been some management missteps amid a faster-than-expected rebound in travel demand, but downplayed the extent of problems at airports, describing them as “isolated and sporadic”.

The Department for Transport said the Government’s priority had been protecting public health, with travel curbs buying vital time for the rollout of vaccines, and that the sector received £8bn of support during the pandemic.

Britons aren’t just facing a summer of rail misery – it seems the woes blighting air travel are also set to deepen.

The boss of Wizz Air has warned that fares might rise by as much as 10pc over the key holiday period as holiday makers look to get away after a year of restrictions.

Jozsef Varadi said prices are already more expensive now than in the year before the pandemic, adding he expected them to rise even further between July and September.

It came as Wizz Air warned that recent disruption at airports would probably drive it to an operating loss in the first quarter.

Mr Varadi said:

We see strong consumer demand for summer, but expect an operating loss for the first quarter of [fiscal year] 2023.

The airline industry remains exposed to externalities such as air traffic control disruption and continuing operational issues within the airports sector, adding to a volatile macro environment.

As a result, at this point, we are not providing further financial guidance for the year.

The FTSE 100 is treading water this morning as gains for energy stocks were offset by inflation worries.

The blue-chip index dipped marginally to 7,591 points.

Shell and BP were the biggest boosts, rising 0.6pc and 1.1pc respectively as oil prices continued their ascent. AstraZeneca also gained more than 1pc.

But banking stocks including HSBC and Barclays dragged down the index amid concerns about the economic outlook, while miners also lost ground.

The domestically-focused FTSE 250 also slipped marginally. Wizz Air fell 2.8pc after it warned recent disruption would drive it to a loss in the first quarter.

There’s particular consternation over the RMT’s decision to stage strikes on alternate days.

Just one in five trains are set to run on June 21, 23 and 25 as workers stage a walkout. But shift patterns mean services will also be disrupted on days in-between, effectively shutting down the network for an entire week.

A Whitehall source told the Telegraph the alternate days tactic was “nasty”.

Downing Street has launched a blistering attack on the RMT over its plans to strike, describing them as “selfish” and “thoroughly irresponsible”.

But Mick Lynch, head of the union, has hit back. He tells the BBC: “This Government are experts at being selfish and irresponsible”.

Sajid Javid has blasted unions for their decision to strike, saying they must get round the negotiating table and “just talk like civilised adults”.

He said:

We obviously don’t agree with this decision of the unions. I think it is not just going to be a bad outcome for travellers if these strikes went ahead I actually think it is bad for the workers because you need to have an industry that is going to be sustainable.

We know as a result of the pandemic there are some habits that have developed and things might not go quite back to what they were pre-pandemic.

Let’s remember during the pandemic I think the Government put in some extra £16bn to support the rail industry, that is almost something like £600 per household. These are huge amounts of money and that kind of thing can’t continue.

What I would urge the industry to do and the unions is to basically get round the table and keep talking. That is the best way. Just talk like civilised adults and find a way through.

The FTSE 100 has made a tentative start to the day as traders weigh up inflation and the risks of an economic slowdown.

The blue-chip index is little changed at 7,601 points.

The latest wave of disruptive strikes are likely to fuel calls for a minimum service obligation that would prevent unions from shutting down the entire network.

Huw Merriman, chairman of the Transport Committee, told the BBC’s Today programme that the Government had to follow through on its manifesto promise:

When it comes to the rail strike we know the unions over the years have fought very hard and been successful at getting terms and conditions to the members, so they will not back down easily on this.

It was proposed in the Conservative party manifesto in 2019 that there would be a minimum service obligation so that trains have to run as they do in France, Italy and Spain during strikes, where a third to a fifth of trains operate.

That legislation has not been put in place, so without that it will be difficult to just negotiate with unions if the trains grind to halt, which it looks as if they will.

We regard the rail as an essential service, that is why we kept it running during the pandemic for key workers.

So if it was right that we kept the railway running then, it is surely right that we keep it running during industrial action.

I am saying that the Government committed if it was re-elected in 2019 that it would bring in minimum service obligation. 

If the Government wants to succeed in reforming the railways and getting through this industrial action then it may well need this legislation in place in order to strengthen its arm.

Steve Montgomery, chairman of Rail Delivery Group and managing director of First Group, brands strikes “old hat” and says the industry needs reform.

He told the BBC’s Today programme:

We recognise it’s difficult for people at this moment in time, but strike action is not the answer. It is old hat. We need to think about how do we go and sit and talk about reform of the industry, because we are talking about the future of the railway at this moment in time.

National Rail has responded by saying the union “must recognise we are a public body and any pay increase has to be affordable for taxpayers”. 

Chief executive Andrew Haines said:

We cannot expect to take more than our fair share of public funds, and so we must modernise our industry to put it on a sound financial footing for the future.

Failure to modernise will only lead to industry decline and more job losses in the long run.

The first day of strikes – June 21 – will also see a walkout on the London Underground as the unions try to inflict maximum chaos.

The RMT said the Tube strike was over a “separate dispute over pensions and job losses”. 

It follows a strike at the beginning of this week, which comes as part of a row over how Transport for London is cutting its running costs – something TfL says the Government has ordered it to do to achieve financial sustainability on its operations by April 2023. 

TfL says its latest proposals to make savings mean “no changes to pensions and nobody has or will lose their job as a result of the proposals we have set out”. 

Instead TfL has suggested that it does not fill between 500 and 600 posts as they become vacant.

Rail workers have voted to strike after a row with Network Rail over pay freezes and proposed job cuts. RMT claims that as many as 2,500 jobs are at risk and that workers have been subject to years of pay-freezes. 

RMT General Secretary Mike Lynch said of the action: “We have a cost-of-living crisis, and it is unacceptable for railway workers to either lose their jobs or face another year of a pay freeze.”

The walk-out is set to kick off on June 21 with as many as 50,000 railway workers expected to strike and services across Network Rail and the London Underground due to be affected. 

As many as 40,000 workers on railway services will then strike again on June 23 and June 25, according to the Rail, Maritime and Transport (RMT) union.

However, union bosses said the action was due to affect rail services “for the entire week where the three days of action have been called”. This is because trains may not be at the right stations after the walk-outs take place. 

Read more here

Good morning.

The UK’s rail network is set to be effectively shut down for an entire week later this month in the biggest strike for more than 30 years.

Nationwide strikes have been announced on June 21, 23 and 25 by the RMT in what it described as the biggest dispute on the network since 1989.

More than 50,000 workers from National Rail and 13 other operators will walk out on June 21, coinciding with a Tube strike in London, and another 40,000 union members will strike on the subsequent dates.

Two critical by-elections will be disrupted, while revellers also face chaos heading to events including Glastonbury, several concerts and England’s cricket match against New Zealand.

5 things to start your day 

1) Ban gas boilers to tackle cost of living crisis, demands infrastructure tsar Sir John Armitt, chairman of the National Infrastructure Commission, said ministers should replicate the enforced ban on the sale of new petrol and diesel cars by 2030 to also apply to natural gas boilers.

2) 50,000 rail workers to shut down UK travel network with three days of strikes in June Rail union bosses have launched the strikes to coincide with by-elections and Glastonbury festival as they pile pressure on the Government.

3) UK launches first post-Brexit sat nav system to ward off Russian hack threat The British satellite navigation system will give pinpoint locations to aircraft, ships and driverless cars after Brexit meant the UK was ejected from the European alternative.

4) Tesco vegan burger adverts banned over ‘misleading’ environmental claims The Advertising Standards Authority said Tesco had implied that buying Plant Chef burgers would “positively affect the environment” by suggesting that customers could “do their bit” for the environment by swapping to plant-based burgers. 

5) Three in four Londoners will never return to the office full-time The study found that few agree with Boris Johnson’s criticism that working from home is inefficient because people find themselves “walking very slowly to the fridge, hacking off a small piece of cheese” and forgetting what they were doing.

What happened overnight 

Hong Kong shares on Wednesday began with a big gain following a strong lead from Wall Street.

The Hang Seng Index rose 1.2pc. The Shanghai Composite Index added 0.1pc, while the Shenzhen Composite Index on China’s second exchange inched up 0.06pc.

Tokyo stocks opened higher, with the benchmark Nikkei 225 index up 0.6pc.

Coming up today

• Corporate:  Aveva Group, Wizz Air Holdings, Workspace Group (full-year results); Nexus Infrastructure, Ramsdens Holdings (interims)
• Economics: Halifax house price index, PMI construction (UK); Industrial production (Germany); GDP (EU); Crude oil inventories (US)