What’s affecting UK’s economy?

• The United Kingdom is experiencing a labor shortage.
• There aren’t enough workers to keep the country’s economy going forward.
• Many employees are fed up with inflation eating away at their earnings.

The United Kingdom is experiencing a labor shortage. There aren’t enough workers to keep the country’s economy going forward. And, many employees are fed up with inflation eating away at their earnings.

Thousands of rail employees went on strike on Tuesday. It was the largest rail walkout in 30 years, over demands for improved pay and working conditions. It brought significant sections of the network to a halt. On Thursday and Saturday, there will be more strikes.

Tube services were also interrupted due to a separate strike by London Underground workers.

Read more: UK economy shrinks again

The National Union of Rail, Maritime and Transport Workers warn that the railway strikes might last months, and that teachers, nurses, and other workers may strike as their pay lags behind increasing inflation rates, which are now expected to top 11% later this year. Last Monday, Unison, a union that represents 1.3 million public sector workers, announced it was “strike-ready.”

According to Kate Nicholls, CEO of trade organization UK Hospitality, this month’s rail strikes alone could cost the tourist, leisure, and theatre industries more than £1 billion ($1.2 billion).

Maggie Simpson, director of the Rail Freight Group, told that she expected between 30% and 40% less freight to be transported by train over the course of the week. In addition, important products such as fuel and grocery items are being prioritized for delivery. She expressed concern about a lack of trust among firms that were increasingly relying on trains to transport their goods.

A summer of strikes would be a major setback for an economy that has slowed to a halt. However, a record number of vacancies — 1.3 million at the last official count — had already slowed activity in fields such as aviation, hospitality, and social care.

Read more: UK economy rebounds record 7.5% from pandemic in 2021

Mandira Sarkar, the proprietor of Mandira’s Kitchen, a food delivery and catering business in the southwest of England, calls the labor scarcity a “slow death” for her six-year-old firm.

She told CNN Business, “It’s been a real catastrophe… [we’re] practically down on our knees because we can’t seem to find the people.”

Widening labour shortages across industries have hampered firms’ ability to expand and forced others to cut back on offerings. Gatwick Airport, south of London, announced this week that it would reduce its summer schedule by up to 13% in July and August due to a labor shortage.

During the epidemic, the airline sector cut employment as travel demand plummeted, and it has struggled to hire and train enough staff to cope with a substantial rise in passenger numbers in recent months.

Due to the inconvenience at Gatwick, EasyJet (ESYJY), a budget airline, announced on Monday that it would decrease its summer schedule to around 90% of what it was in 2019.

But it isn’t merely a lingering effect of the pandemic. Brexit has stopped free labor movement between the UK and Europe, making it far more difficult for British firms to tap into a large pool of workers.

Read more: UK economy contracts in April as inflation weighs

Sarkar said she “desperately” needs to hire two people to work full-time in her kitchen, and she attributes the shortage to the combined effects of Brexit and the epidemic.

Due to a lack of staff, Sarkar has had to turn away customers, and she anticipates her revenues to be 40% lower this year than in 2021.

“During the pandemic, all of the eastern European people, all of the people we had who worked in the hospitality business vanished, leaving this great, gigantic gaping hole,” she recalled.