Battered Britain

The UK is facing a fresh wave of industrial turmoil as Rishi Sunak’s government refuses to boost pay offers for large numbers of public-sect [View in browser]( [Bloomberg]( The UK is facing a fresh wave of industrial turmoil as Rishi Sunak’s government refuses to boost pay offers for large numbers of public-sector workers, arguing that to do so would drive the nation’s double-digit inflation rate even higher. The disputes over pay are just the tip of the iceberg for the prime minister. The British people are facing the biggest drop in living standards on record, essential services like transport and healthcare are crumbling, and the country’s mounting interest payments are squeezing public finances despite taxes at the highest in 70 years. Key reading: - [UK Steps Up Contingency Plans as Weeks of Strike Chaos Begin]( - [Sunak Vows Action to Deal With ‘Unreasonable’ UK Strike Leaders]( - [Hunt Bows to Bleak Reality as UK Faces Weak Growth, Rising Taxes]( - [UK Braces for ‘Austerity on Steroids’ With Little Left to Cut]( - [Tory MPs Rush for the Lifeboats in Sign of Desperation for Sunak]( One faction in his governing Conservative Party argues that Sunak has resigned himself to the UK’s economic decline and is simply trying to manage that process. Those lawmakers want bolder action to revive growth, but their champion, Liz Truss, had her chance to execute on that plan and comprehensively messed it up. The result is growing anger and unrest among the British workforce. A two-day train operators strike starts tomorrow. Planned walkouts this week include driving examiners, Royal Mail postal workers, bus drivers, highway workers and ground handling staff at Heathrow airport. Most worrying for Sunak is on Thursday when Royal College of Nursing staff strike for the first time in their history. The government is seeking to face down the strikes, threatening tough new legislation to restrict stoppages and preparing to call in the army to help run essential services. With the opposition Labour Party riding high in polls, Britain’s worst industrial strife since the 1980s is a key test for Sunak less than two months into his premiership. There are worrying echoes from history for the government after 12 years in power and an election looming. Industrial action in the 1970s swept away an exhausted Labour government and ushered Margaret Thatcher into office. — [Kitty Donaldson]( Striking Royal Mail workers outside Buckingham Palace on Friday. Photographer: Jose Sarmento Matos/Bloomberg Sign up [here]( for the Bloomberg Businessweek newsletter for unique perspectives and original reporting every weekday. And if you’re enjoying this newsletter, sign up [here]( for Balance of Power. Global Headlines Covid deluge | Covid-19 is [rapidly spreading]( through Chinese households and offices after the country’s pandemic rules were unexpectedly unwound last week. Despite pleas from state media and health experts for people to self medicate and recover at home, many citizens — fearful of the virus after three years of messaging on its dangers — are flocking to ill-prepared hospitals. - China is warning citizens against some [questionable]( and risky attempts at self-treatment as authorities seek to tackle panic-buying of drugs. Rallying round | Group of Seven leaders will hold a virtual [meeting]( today hosted by German Chancellor Olaf Scholz to consider Ukraine’s needs following Russian attacks on its energy infrastructure. European Union foreign ministers are also meeting in Brussels to discuss support for Ukraine through the winter. President Joe Biden held phone talks with Ukrainian leader Volodymyr Zelenskiy yesterday “to underscore ongoing US support.” - Turkish President Recep Tayyip Erdogan spoke separately to Zelenskiy and Russian leader Vladimir Putin on ways to expand an agreement to [safeguard]( global grain shipments. - Follow our rolling coverage of the war [here](. Climate tool | The European Parliament and member states aim to reach a tentative deal on a landmark [carbon levy]( on imported goods from third countries, seeking to shield the bloc’s industry during a green transition while helping deter polluters elsewhere. They’ll thrash out key details of the Carbon Border Adjustment Mechanism today, including a provision on which products are covered. 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Photographer: Audrey Cordova Rampant/Bloomberg Explainers you can use - [Horror of a Hotter World on Stark Display in Parched East Africa]( - [How Wirecard Went from Fintech Star to Criminal Court]( - [Why US Power Substations Are Such Vulnerable Targets]( Uphill battle | Surging interest rates, a looming recession and rising crime are [dimming prospects]( for New Zealand Prime Minister Jacinda Ardern to win a third term next year. It’s a rapid reversal of fortunes for Ardern, who stormed to a landslide victory just two years ago on the back of her early success at keeping Covid out of the country. Bloomberg TV and Radio air Balance of Power with [David Westin]( on weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here](. News to Note - Iran [executed]( its second prisoner in less than a week over anti-government demonstrations, state-run media reported. - Florida Governor Ron DeSantis thanked some of his donors at a closed-door meeting in Miami yesterday, [sidestepping]( any mention of Donald Trump and possible plans to run for president. - The US’s resolve to claw back [lost influence]( in Africa will be put to the test this week when dozens of the continent’s leaders and officials gather for three days of talks in Washington. - Karen Bass was sworn in as Los Angeles mayor yesterday after she became the [first female]( and the second Black person elected to run the US city. - A [man charged]( in the 1988 Lockerbie bombing of a Boeing 747 airliner over Scotland that killed 270 people is in US custody. - European and US diplomats demanded an [immediate end]( to scattered attacks and road blockades in Kosovo as tension with ethnic Serbs threatens to boil over into violence. Thanks to the 38 people who answered Friday’s quiz and congratulations to Larry Willoughby, who was the first to name the Netherlands as the country that’s planning new controls on exports of chipmaking equipment to China, aligning it more closely with US curbs on Beijing. And finally ... US Army veteran Michael Taylor led the team that helped fallen auto executive Carlos Ghosn flee Japan and possible prison time in a daring escape act in 2019. As [Reed Stevenson]( reports, the [extraction]( came at a high cost for Taylor and his son, Peter. They served time in a Japanese prison before being transferred to the US, where they were released last month. The senior Taylor is now reaching out to his former client, seeking to revisit the financial arrangements for the James Bond-style mission. Taylor in Acton, Massachusetts, on Nov. 30.  Photographer: Kayana Szymczak/Bloomberg News Follow Us Like getting this newsletter? 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