Are Strikes Bad for the UK Economy? Go Figure
It makes sense that the widespread walk-outs should have a negative effect. But don’t look for evidence in GDP.
Feb. 1 is shaping up to be the worst single day for the rolling strikes that began in June and have become a regular feature of this British winter. With teachers, civil servants and train staff set to protest at the same time, the action ought to be having a discernably negative effect on the UK economy. Unfortunately, economics is rather failing us here: This type of labor withdrawal from public-sector services — which emerges situationally and has few regular patterns — is not a simple thing to measure. Certainly not in real time.
Indeed, the latest gross domestic product data for November took economists rather by surprise, rising 0.1% on the month instead of an expected decline. Hospitality spending due to the World Cup was the most pertinent positive factor, but surprisingly, any negative knock-on effect from a series of railway strikes has not really shown up — so far anyway. It is also possible the UK may avoid a technical recession — defined as two consecutive quarters of negative growth — because the last quarter of 2022 may show very modest growth. Not much more than a statistical wobble above flatlining and lower depths. That isn’t likely to change. Bloomberg UK Senior Economist Dan Hanson does not expect a noticeable impact on growth from these strikes.