Aurelia Butler

LONDON (Reuters) – For Oleg Kechin, owner of a chain of barbershops, forecasts that Russia will be plunged into its deepest economic crisis in a generation feel overdone. U.S. President Joe Biden may have promised that Western sanctions would wreak economic havoc in Russia, but Kechin’s business is still drawing in customers in the town of Saransk, which lies 510 km (320 miles) southeast of Moscow.”There’s no deep crisis. In general, everything’s fine,” he said. “Everyone’s talking about a decrease in purchasing power, but I haven’t noticed it.”Yet, such confidence may not be entirely well placed, if some indicators are to be believed. Trade with the outside world has plunged, consumers are reluctant to spend and rising prices on basic items are starting to squeeze household budgets.Russian officials insist the economy is holding up. The central bank slashed interest rates by three percentage points to 11% on Thursday and expects to cut its forecast for inflation for this year from the current prediction of 18-23%.Under capital controls and orders that exporters sell half their hard currency earnings, the rouble has rallied and, at about 66 to the U.S. dollar, is stronger than before Russia sent its armed forces into Ukraine on Feb. 24. [RU/RUB] President Vladimir Putin, who has welcomed the departure of foreign firms which have sold up or just dumped Russian assets, said Russia could not be isolated from global trade.But not everyone is convinced the economy will escape unscathed. Roman, a 25-year-old in Moscow, who asked not to be identified by his full name, said middle class life was not “drastically different” than before but he saw worrying signs.”One thing that bothers me … is constant price rises for everyday goods and even vegetables. I think that signals the worst is yet to come.” he said. “The situation with the labour market in my sphere doesn’t make me very optimistic either.”‘DEMAND CRISIS’Some indicators justify his concerns. VAT receipts, which reflect consumer spending, fell 54% in April year on year, the Kommersant daily said, citing preliminary finance ministry data.Economy Minister Maxim Reshetnikov said on Friday there was a “demand crisis” in business and consumer spending.Russia has stopped publishing most data on financial flows, but figures compiled by the Bank of Finland based on local customs data show imports have plunged – and not just from the West.Chinese exports to Russia were down by a quarter in April and shipments from Vietnam, South Korea, Malaysia and Taiwan more than halved, the bank said.The economy minister said manufacturers were re-establishing supply chains broken by sanctions and said 2,000 “backbone companies” could access preferential lending programmes.But inflation is still at its highest in two decades at more than 17%. That means a 10% hike in pensions and the minimum wage announced by Putin still leaves many facing a cut in household incomes in real terms. Rising prices may not be Russia’s biggest problem. The strong rouble has already brought down weekly inflation sharply, but it won’t fend off a broader threat to economic output from Russia’s increasing isolation.Reshetnikov said there were “fears that we could break into a deflationary spiral, when a reduction in money in the economy leads to a reduction in production, lower prices, and so on.”Meanwhile, financing a military campaign in Ukraine will put pressure on the budget. Finance Minister Anton Siluanov said on Friday that Moscow required “huge financial resources” for what Moscow calls its “special military operation”.STIMULUSRussia has already dipped into its National Wealth Fund, which has about $110 billion of liquid assets, to support spending, which is up 22% this year, the economy minister said.The finance minister said Moscow had earmarked 8 trillion roubles ($123 billion) of stimulus for “the current circumstances”, although it was not clear how much of that was new money and over what period.The full impact on economic output and jobs from the withdrawal of Western firms, ranging from carmakers to banks, has yet to seen. Sergei Guriev, economics professor at France’s Sciences Po, expected the impact to be felt more sharply in the next few months.”The real pain has not started yet as some exiting companies are still paying wages and some companies continue production using their inventories of imported parts,” said Guriev, who is also a former chief economist at the European Bank for Reconstruction and Development. Morgan Stanley (NYSE:MS) economists see a 13% drop in household consumption in 2022 and a 23% fall in investment. The bank’s chief regional economist, Alina Slyusarchuk, said in a note that Russia’s potential long-term growth rate was now just 1%.The outlook appears to be dimming for smaller Russian firms, although there is little way to gauge it precisely with so little official data now being published and businesses no longer required to report results.”Very few companies want to create a strategy or plan long-term, large-scale contracts right now,” said Anastasia Kiseleva, a partner at a small public relations firm in Moscow.”Businesses – especially small ones – will be engaged in pure survival, not developing or creating anything new.”Survival-mode, however, is nothing new to many Russians, who have lived through several deep crises since the collapse of the Soviet Union in 1991.”The worst is ahead of us,” said Yevgeniy Sheremetov, who runs a tour company near Lake Baikal in Siberia. “But residents of this country are used to difficulties. I have my summer house, with potatoes and cucumbers. After the 1990s, nothing can scare me.” More

Investing.com — The Memorial Day holiday in the U.S. means it’s a quiet session in world markets, but Chinese and European stocks are higher after Shanghai announced the lifting of more COVID-19 lockdown measures. Eurozone inflation looks to have overshot expectations in May, but the ECB’s chief economist again ruled out a half-point raise in interest rates in July. EU leaders are due to meet later, but are struggling to overcome Hungarian objections to the proposed ban on Russian oil imports from the end of the year. And the weakness in the U.K. economy is finally – but only gradually – reaching the housing market. Here’s what you need to know in financial markets on Monday, 30th May.1. Chinese reopeningShanghai emerged further from its COVID-19 lockdown, announcing the resumption of public transport services from June 1.The city authorities also said restrictions on private cars will be lifted and movement into and out of housing communities will also be allowed from the same date – except for residential complexes in medium and high-risk areas and other designated control areas.The restrictions on China’s most important economic hub have been in place for over two months, and have triggered sharp declines in local economic output and a fresh surge in global supply chain problems.Authorities in the capital Beijing said the COVID-19 outbreak there was also under control, after a week of steadily declining case numbers.Benchmark Chinese stock indices rose by as much as 1.0% in response, while European indices rose by a little less.2. EU scrambles to save Russian oil embargo  The EU’s proposed embargo on Russian oil imports is still far from a done deal.A weekend of negotiations ahead of a two-day summit that starts later Monday failed to overcome Hungarian objections to the proposed ban on imports of crude and refined products that would come into force at the end of the year, despite including temporary exemptions for oil delivered via the southern arm of the Druzhba, which feeds Hungary, Slovakia, and Czechia.According to Reuters, EU leaders will also sign off on a $10 billion package of financial aid to Ukraine to keep its government functioning, as well as discuss measures to help the export of Ukrainian grain to world markets.On the battlefield, meanwhile, Russia continues to make steady progress in its efforts to capture the remaining, unoccupied parts of eastern Ukraine. Ukrainian authorities confirmed street fighting in the city of Sieverodonetsk, the largest city in the Luhansk region still under government control.3. Eurozone inflation surprises to the upsideInflation may have peaked in the U.S., but it still appears to be accelerating in the Eurozone.Preliminary data from Germany, the Eurozone’s largest economy, showed prices increased by between 0.9% and 1.1%, up from a nationwide average of 0.8% in April and defying expectations for a slowdown to 0.5%. A preliminary figure for the whole of Germany is due at 8 AM ET (1200 GMT).In both Spain and Belgium, the rise in prices accelerated to 0.8%, pushing the annual rates to 8.7% and 9.0%, respectively.   In comments made before the data, ECB chief economist Philip Lane told the newspaper Cinco Dias that two increases of 25 basis points in the ECB’s key rate this summer were preferable to a half-point increase in July.4. U.K. housing market weakensThe slowdown in the U.K. economy is finally reaching the housing market.Data from online real estate agent Zoopla showed the proportion of home offers being discounted in the last month rising to 5% of the total. The average price cut is around 10%, it noted.  Homes are also taking longer to sell.Zoopla estimated that annual house price inflation slowed to 8.4% in April from 9.0% in March. It expects that to fall further to around 3% by the end of the year.That will still mean house prices post new record highs between now and then, against a backdrop of a chronic mismatch between supply and demand.5. Oil edges higher on prospect of Chinese demand reboundCrude oil prices pushed higher in response to the news out of China, which paves the way for a recovery in demand from the world’s biggest importer.By 6:30 AM ET, U.S. crude futures were up 0.4% at $115.47 a barrel, while Brent futures were up 0.5% at $116.18 a barrel.Data released by the U.S. CFTC on Friday had shown speculative long interest in oil hit its highest in two months last week as the prospect of revived Chinese demand, coupled with continued supply shortfalls, tightens the market further. More

The European Central Bank’s chief economist has said quarter-percentage point interest rate rises in July and September will be its “benchmark pace”, rebuffing calls for a bigger increase to end its negative rate policy instantly this summer.Eurozone inflation is expected to hit a new high of 7.7 per cent when figures for May are published on Tuesday — nearly quadruple the ECB’s 2 per cent target. But its chief economist Philip Lane said the process of removing its stimulus “should be gradual”.“Normalisation [of monetary policy] has a natural focus on moving in units of 25 basis points, so increases of 25 basis points in the July and September meetings are a benchmark pace,” he told Spanish business newspaper Cinco Días. Lane was more specific than ECB president Christine Lagarde, who last week signalled for the first time a clear plan to end its eight-year experiment with negative rates by saying borrowing costs were on track to hit zero by the end of September.The ECB’s deposit rate is minus 0.5 per cent and has been in negative territory since 2014, when the region faced a sovereign debt crisis. Most of its policymakers agree on the need to start raising rates, but there are divisions over the pace of the move.Economists said Lane’s comments on Monday were an attempt to quash calls by more hawkish members of the ECB’s governing council for it to follow the lead of the US Federal Reserve by raising rates at a more aggressive pace of half a percentage point at a time.“The only explanation I can come up with is that this is indeed a desperate attempt by Lane (and Lagarde) to take back control of the discussion and to prevent a 50-basis point rise in July,” said Carsten Brzeski, global head of macro research at ING.Austria’s central bank governor Robert Holzmann, one of the most hawkish members of the ECB governing council, said last week that it should raise rates by half a percentage point in July as “everything else risks being seen as soft”.But ECB executive board member Fabio Panetta warned that “signs of economic stress are emerging in the hard data — signs which may become more visible in the coming months”. In that context, pre-committing to change policy “seems unnecessary and unwise”, he added.Data published on Monday showed inflation in Spain had risen faster than expected in May to 8.5 per cent, while German inflation is expected to have risen to 8 per cent, its highest level for more than 40 years.The ECB is expected to predict that inflation will remain higher than it previously estimated, while growth will be slower than anticipated, when it issues new economic forecasts at its meeting in Amsterdam next week.

Despite the continued surge in inflation, the ECB is likely to keep rates on hold next week, while announcing plans to stop buying more bonds at the start of July.Lane said any further ECB rate rises after September would depend on how the economy performs. “This debate will continue in the autumn and at that point we’ll have more information and will know more about the dynamic of inflation and second-round effects on wages,” he said.Lex Hoogduin, a professor at the University of Groningen and a former board member of the Dutch central bank, tweeted that by only “reluctantly raising interest rates to zero” the ECB was “taking a very big risk”. More

Bus and rail transport will also resume basic operations from June 1, including a ferry that connects districts separated by the city’s Huangpu river, the Shanghai city government said in a statement on its official WeChat account”The epidemic situation in our city has been effectively controlled and the situation continues to improve,” it said in its statement. People will still be required to wear masks, discouraged from gathering and encouraged to get vaccinated, it added. Shanghai imposed a city-wide lockdown on its 25 million residents on April 1 to combat the spread of COVID-19, exacting harsh measures that caused widespread public anger over issues such as crowded quarantine centres, difficulties in accessing food and loss of income. It had in recent weeks relaxed some curbs, but most of the public transport network remained shut and people could only drive if they had obtained prior approval. More

Is the Ukraine war finally turning Vladimir Putin’s way? The Russian army is grinding forwards in the Donbas. If Putin’s military can capture Ukraine’s industrial heartlands and cut the country off from the sea, Ukraine’s survival as a viable state would come into question. That grim scenario is certainly possible. But it is not inevitable — or even likely. However, to prevent Russia achieving a semblance of victory, the western alliance backing Ukraine has to hold its nerve and increase its support for Kyiv. The momentum in the war must shift back towards Ukraine before there is any prospect of an acceptable peace settlement.The war in Ukraine is essentially being fought on three fronts and among three protagonists. The first front is the battlefield itself. The second front is economic. The third front is the battle of wills. The three participants are Russia, Ukraine and the western alliance backing Ukraine.The Ukrainians are increasingly edgy because they worry that western support is going soft. They know that, in a straight fight with Russia, Ukraine has the advantage only on the third front — the battle of wills. As a country fighting for its freedom and independence, the Ukrainians are much better motivated.When it comes to firepower and economics, however, the bilateral advantage tilts towards Moscow. Russia has more heavy artillery and more aircraft than Ukraine and it is finally making that tell in the Donbas. Sabine Fischer, a German academic, says the mood in Moscow is “swinging back to ‘we can win this thing’”. Russia has suffered heavy casualties but so has Ukraine. President Volodymyr Zelensky said recently that his country is losing up to 100 men a day. The real figure may be higher.Ukraine has also sustained much more serious economic damage than Russia. The Russian economy is projected to shrink by 12 to 15 per cent this year. But Ukraine’s economy, smaller to start with, is expected to contract by 45 per cent.Other than higher morale, Ukraine’s great advantage is western support. If the western alliance gives the Ukrainians the weapons and the economic aid they need, then the balance of the war will switch back towards Kyiv.There was palpable nervousness among the large Ukrainian delegation to the World Economic Forum in Davos last week that western support may soften. The Ukrainians are alarmed by the slowness of weapons deliveries from the US and Germany, which is making it harder to push back the Russian advance. They worry that, by September, western countries will be focused more on their own economic problems than on the plight of Ukraine.They fear that some countries — probably led by France or Germany — will grab on to illusory peace negotiations and drastically reduce support to Ukraine. These Ukrainian anxieties will have been raised by the recent phone call between Putin and Olaf Scholz and Emmanuel Macron, the leaders of Germany and France.These fears are understandable. But I think (and hope) that they are wrong. Scholz’s speech in Davos showed a clear understanding of what is at stake in Ukraine. The chancellor argued that Russia is waging an imperialist war and stated that “Putin must not win”. Importantly, the Germans say the same thing in private — insisting that they have no intention of forcing Ukraine to cede territory and fully intend to deliver the promised weaponry. If the west holds its nerve, keeps its promises and accelerates the delivery of weapons, then the pressure on the Ukrainians to make territorial or other concessions to Moscow will ease. With more heavy weaponry, the Ukrainians should be able to hold the Russians off and then force them back. Professor Lawrence Freedman points out that “Russia must now defend a long front and substantial occupied territory. Its forces are already stretched and Moscow is scrambling to find reserves.” It is on the economic front, however, that Russia’s position could dramatically weaken over time. The Russian army has lost a lot of military equipment. Replacing it is very hard in an economy that is being hammered by western sanctions.The Russians are now so short of semiconductors that they are reportedly using computer chips from dishwashers and refrigerators in military equipment. The US government claims that Russia has lost around 1,000 tanks in battle and that two of the country’s tank manufacturers have had to stop production for lack of components.The financial squeeze on Putin is also tightening. At present, Russia is still receiving roughly €1bn every day from the export of oil and gas. But the EU plans to end imports of Russian oil by the end of the year and to drastically reduce gas imports as soon as possible. Germany is now constructing and leasing new terminals for the import of liquid natural gas, which will allow the process of cutting off gas imports from Russia to begin in earnest next year. The Russians do not have the pipelines in place to redirect that gas towards China and so face a disastrous hit to their national finances.The prospect of a prolonged war is horrifying. But until the Russian government abandons its goal of conquering new territory in Ukraine, there can be no prospect of real peace talks. That may only be possible when Putin’s troops run out of equipment and his government runs out of [email protected] More

Anti-poverty campaigners have pointed to sharp price rises in the cheapest categories of many food staples, and surveys have shown growing numbers of Britons skipping meals as they are squeezed by the highest consumer price inflation in 40 years.Last week Britain’s government announced 15 billion pounds of grants to households to pay soaring energy bills, on top of 22 billion pounds of support earlier this year.The cost of the cheapest 500 gram (17.6 oz) pack of pasta at a British supermarket last month was 53 pence ($0.67), a 50% increase from 36 pence a year earlier, while the price of an 800 gram loaf of bread rose by 16% to 54 pence.In cash terms, the biggest increase was in the cost of 500 grams of minced beef, which rose by 32 pence to 2.34 pounds, a 16% increase.However, average prices for the cheapest brands of food and drink across 30 staple categories rose by 6-7%, the ONS said, the same as for food and drink overall.”There is considerable variation across the 30 items, with the prices for six items falling over the year, but the prices of five items rising by 15% or more,” the ONS said.The cost of potatoes fell 14%, cheese prices were down 7% and pizzas cost 4% less than a year before.The ONS described its analysis as “highly experimental” and said the results were sensitive to the exact goods chosen in particular categories. Bank of England Governor Andrew Bailey warned this month that Russia’s invasion of Ukraine could have “apocalyptic” further consequences for food prices, especially for developing counties.Both Russia and Ukraine are major exporters of grain, vegetable oil and other foodstuffs. (This story refiles to dropped word in final paragraph) More

If the rich don’t give a bit more today, they may have to give a lot more tomorrow. That was my conclusion from last week’s World Economic Forum in Davos. I came away feeling that the 0.1 per cent was more out of touch with the state of the world than it has ever been in the 20-odd years I’ve attended the conference.Maybe it was the Saudi-sponsored café on the promenade, branded with the name of Crown Prince Mohammed bin Salman, the man who, according to declassified US intelligence, was responsible for the murder of exiled Arab journalist Jamal Khashoggi. Or perhaps it was the socialite who told a Ukrainian official addressing her luncheon to “keep it short”. It could have been the conversations about climate change held over beef dinners. Or the massive armed police and security presence, which always makes me wonder if the global elite ever consider why so much protection is needed at these gatherings in the first place. Davos isn’t the problem — although it’s certainly not the solution. But the annual jamboree is a high-profile measure of the fact that despite all the talk over the past several decades about stakeholder capitalism and “doing well by doing good”, the state of the world isn’t improving.Indeed, I’d argue it’s getting worse, and a large part of that is down to the fact that, even as business talks about curbing emissions or improving education or bolstering healthcare, it is all too often undermining the public sector which is responsible for making those things happen. Aside from the Patriotic Millionaires, for example, who joined a protest demanding “tax us now!”, few of the super-rich seem to think about paying tax as anything other than a personal assault. Government is meant to give but never take.I marvelled at one executive who told public officials not to worry, that business “wasn’t asking for any money” to make a shift to a carbon neutral economy. How generous, given that corporate profits remain near record highs even as governments are struggling under the weight of pandemic fiscal programmes — plus the additional debts accrued over the past two years of slower growth and lower tax receipts.There was, as always, plenty of discussion about the declining skill levels in many rich countries as public education has failed to keep up with technology. In the case of the US in particular, we endured the usual moaning about the loss of global competitiveness from failing infrastructure. But nobody seems to dwell on the fact that the public sector lacks the capacity to properly rebuild these systems precisely because business has so successfully lobbied against its ability to do so.Don’t even get me started on the cost of private healthcare, or the mystery of why the US business community itself isn’t lobbying nonstop for a public sector alternative. This reform would make it so much easier to compete with European countries and other nations that support healthcare as a public good, one that brings significant (albeit not precisely tallied) economic benefits in the form of a more productive workforce.The point here is that western business leaders have for many years blamed governments for not delivering on basic public services. But blanket privatisations and the neoliberal race to the bottom for offshoring both wealth and labour has ensured that it’s harder and harder for them to do so.Yet business is never willing to acknowledge its own role. Too many chief executives prefer to have endless and (often) empty and fruitless conversations about “stakeholder initiatives” and “public-private partnerships”. None of which is making up for the basic hollowing out of public services in many liberal democracies. Some progress is being made by politicians. The recent OECD tax agreement, led by US Treasury secretary Janet Yellen, is a step in the right direction. American Commerce secretary Gina Raimondo, the most senior member of the country’s Davos delegation, talked about how investment must take the place of deregulation and tax cuts as a growth prescription for the future. But you can’t fix a 40-year problem overnight. Building back the “human capital” (as Davos Man would put it) in US politics is going to take time. There’s an entire generation of talent missing, because from the late 1980s onwards, the money culture drew the best and the brightest to Wall Street or Silicon Valley rather than to Washington. That’s one big reason why we now have an ideologically and age-bifurcated political class, led by near-octogenarian centrists like Joe Biden or young radicals like Alexandria Ocasio Cortez.Business should mind that gap, which certainly isn’t good for “growth and stability”, the two things that executives keep calling for. They use this mantra during times that are increasingly economically and politically unstable thanks, in good part, to their own efforts. I fear the divide between the health and prospects of the public and private sectors, as well as between capital and labour, may get worse before it gets better.One of the important topics that was discussed in Davos was the expectation of a coming wave of white collar outsourcing and tech job displacement. As one American chief executive said when discussing remote work: “If you can do it in Tahoe, you can do it in India.”I wonder how that will go down with workers and voters in rich [email protected] More

Nicola Ryan is concerned about rising inflation. Not just the impact of price increases on her personally, or on her employer One and All, a school uniform maker based in Stockport, north-west England. She’s worried about the impact on all her co-workers who are trying to manage their household budgets. “We’re in a real crisis,” says Nicola, who is director of colleague support. “We know [staff are] really worried.” The summer months will be relatively easy compared with October, when the “pinch-point will be rising [energy] bills”.One and All has increased wages by 4.5 per cent for everyone except directors — an increase that would look generous in normal times, but now falls short of UK inflation, which hit 9 per cent last month and is expected to reach double digits in the autumn. But the company is doing its best to target help towards those in lower-paid roles, including manufacturing and warehouse work. It has increased the profit share for all staff, which it expects to be worth more than £2,000 per person this year, and set up an emergency fund to help those who are struggling. “We were really honest and said this was due to the cost of living crisis,” says Ryan. “We are preparing for October.” This is on top of existing interest-free crisis loans for unexpected bills such as a boiler breakdown and free financial management advice. One and All is accredited by the charity Living Wage Foundation (which sets its “real” living wage at £9.90 an hour in the UK and £11.05 in London) and is also committed to “real living hours”, guaranteeing predictable shifts of at least 16 hours a week. After two years of pandemic upheavals, employers in the UK — as in much of the developed world — are contending with rising costs. Although average wages are rising rapidly, by historic standards, inflation is rising even faster. Government support of the kind announced on Thursday by the UK’s chancellor, Rishi Sunak, will help a lot but it will not plug the gap for everyone, and many families will still be feeling the strains. And while some companies say they cannot afford to pay workers more, others feel both an ethical imperative and intense commercial pressure, against a backdrop of labour shortages, to help those on low incomes. “Organisations are saying that they are struggling on affordability but they feel a moral obligation to help employees. They are trying to make their benefits package the best it can be,” says Sheila Attwood, managing editor at the research group XpertHR, which tracks pay settlements by UK employers.

During the pandemic, many companies strengthened sick pay arrangements or offered new benefits relating to wellness and mental health. Now the focus is shifting to food, childcare or transport. In the UK, the supermarkets Sainsbury’s and Iceland have increased staff discounts, while the Norfolk and Suffolk NHS Foundation Trust has set up a staff food bank.In the US, some employers are offering help with driving expenses, according to Becky Frankiewicz, president of ManpowerGroup North America, a multinational staffing company. “Gasoline subsidies are a new incentive. Transportation vouchers and [help with] rideshares for the under $20/hour worker, that’s fairly widespread.”In France, tax breaks give employers an incentive to offer lunch and holiday vouchers, and business group Medef has proposed that the levy companies pay to fund public transport could be redirected to help car commuters fill their tanks. Take-up of the “prime Macron”, a tax-free bonus that employers can offer low-paid workers, has been low. Economy minister Bruno Le Maire has exhorted companies to do more. Recent research by the CEBR found that 10 per cent of UK employees missed days at work due to financial problems, while a further fifth of workers were less productive because they spent working hours worrying about money — at a total annual cost to businesses of more than £6bn. However, employers are wary of taking on responsibility for everyday living costs, such as energy. “Most companies believe it’s best addressed through fixed pay. It provides more security. Allowances are hard to stop,” says Alasdair Wood, senior director at the consultancy Willis Towers Watson.Many employers remain tight-lipped about the issue, says Norman Pickavance, an HR director and leader in financial inclusion. “Tackling it means acknowledging the problem — which means they have to do something about it.” The most obvious solution is to increase pay, he points out. “Everything else looks like window dressing.” Yet the UK’s CIPD — representing HR professionals — says even when employers cannot afford to raise wages, they can still follow good practices to protect staff from poverty. One is to ensure the lowest-paid employees receive a fair wage. In the UK, the number of accredited Living Wage employers has almost doubled since the start of the pandemic. Under pressure from activist investors, Sainsbury’s this year began paying the real living wage to its direct employees, as have other supermarkets, although it is not formally accredited. Greater flexibility around wages can also help. Aviva, the insurer, is among companies that allow staff to sell back unused annual leave. And Willis Towers Watson says employers in low-wage sectors are increasingly adopting tools such as Wagestream, which offer instant access to earned pay. There are concerns around such apps — which carry transaction charges, and could simply delay financial difficulties. But employers in areas such as hospitality and care say they are better than payday loans.Other forms of flexibility also count, with many white-collar workers now questioning the value of commuting. Tim Oldman, chief executive of Leesman, a workplace research company, says: “We’ve had two years without commuting costs [on] our monthly salaries. Around the world, employees are considering the cost of the commute.” 

Some companies are now repositioning homeworking as a cost of living rather than a work-life balance matter. Neil Carberry, chief executive of the UK’s Recruitment & Employment Confederation, says: “Firms are thinking very flexibly about meeting employees’ concerns . . . Hybrid working reduces commuting costs and in this environment is more attractive.”There is also a new focus on pay and career progression, says Duncan Brown, an independent adviser on reward management. Many low-paid jobs offered “a fixed rate with no progression or career structure”, he says, but his 20-something children would now ask as a matter of course at interviews when pay would be reviewed. Frankiewicz agrees: “The most exciting thing is that employers and employees are now realising that blue-collar workers are expecting and demanding a career plan.” Traditionally this has been a white-collar incentive.Whatever their longer-term prospects, some employees are going to struggle over the next few months. Some employers are offering targeted help: John Lewis, the employee-owned retailer, is doubling its Financial Assistance Fund, acknowledging staff will find it “tough financially”. Most, however, do not step in directly: the buzz in HR departments around “financial wellbeing” generally translates into offers of financial education and budgeting tools; nudges to save more in a pension; or perhaps signposting towards debt advisers where needed. For those workers whose problem is a lack of pay rather than the ability to manage money, this can look like a cynical distraction. But advisers say they help “normalise” conversations about money worries. “We’ve been encouraging employers to get people to talk about money issues more openly,” says Charles Cotton, a senior adviser at the CIPD. “Companies should look at these things in the round,” says Wood. “A financial wellbeing app on its own won’t do any good. But you can get a lot of help from a decent financial education, like tracking your expenses as part of the strategy.” Employers will have to pay closer attention to workers’ personal circumstances as the income squeeze worsens. “Companies are learning as they go along,” says Wood, observing that most senior executives do not have experience of leading companies through a period of high inflation. “The key thing is uncertainty,” he says. “Nobody knows when this will end.” More