Bad news, Governor: the wage-rise spiral is already raging

I’ve had the opportunity recently to take part in wage-rise discussions for several small entities in which I’m involved. The conversation has been much the same everywhere. ‘How about we offer them 3 per cent?’ ‘But that’s less than current inflation and they didn’t have a rise when they were on furlough last year.’ ‘So how about 5 per cent?’ ‘Safer to say 7, but they’d still be worse off than before the pandemic. And they’ll get 10 per cent or better if they move anywhere else.’

All of which was perfectly confirmed by official figures this week: annual pay settlements running at 3.7 per cent but (because so many people having been moving jobs for better wages) average pay up by 6.3 per cent in a year and by more than 10 per cent since February 2020. Meanwhile, unemployment is down to 4.1 per cent in an exceptionally tight labour market. Governor Bailey of the Bank of England took flak earlier this month for urging workers to restrain pay demands ‘otherwise it will get out of control’. Ground-level observation says it already has.

Selling our own security

My remarks (15 January and 5 February) on the late bolting of the stable door in terms of foreign acquisitions of UK technologies that have strategic value have been indirectly endorsed by former MI6 chief Sir Alex Younger, commenting in the FT on news that our leading (and indeed only major) microchip designer, Arm Holdings, may end up listed on the Nasdaq exchange in New York. Arm had arguably ceased to be a UK national asset when it was bought for $32 billion in 2016 by Softbank of Japan, which then agreed in 2020 to sell it for $40 billion to Nvidia, a Californian games-tech venture which claimed the merger would create ‘the premier computing company for the age of artificial intelligence’.