Indebtedness in the UK has reached a new record this year and production has almost halved.
Britain’s most sensitive inventory index has now fallen to a minimum of four months as European stock markets fall more in red numbers.
The FTSE 100 has just reached 5771 emissions, 50 emissions today and its lowest point since mid-May.
Then he recovered a little, but can still finish the week in a final minimum of four months.
European equities suffered higher losses, with France falling by 2%.
Stocks are weakening, as investors see Wall Street expected to fall in a few hours.
The hope that Congress will soon be able to agree on a stimulus package may fade, as XM analyst Raffi Boyadjian explains:
Treasury Secretary Steven Mnuchin and House of Commons Speaker Nancy Pelosi have reportedly been in talks to restart negotiations on a new pledge bill to help the US economy. the virus crisis.
But while the fact that the White House and Democrats are responding is a positive step towards reaching a bipartisan agreement, there is a deep skepticism about the option of an agreement. President Trump of $1. 5 trillion has indicated that he is willing to settle for and well above the $1 trillion limit set by Republicans.
In a blow to the UK car industry, engine production fell by more than a third last month.
New SMMT figures show that there was a drop in calls from domestic brands last month, as well as from foreign buyers.
Mike Hawes, executive leader of SMMT, said the industry needed, adding a flexible industrial agreement on Brexit.
“These figures come at an incredibly worrying time for the industry as it prepares for a momentary wave of coronavirus. New restrictions here and at major export destinations will undermine customer and business confidence and place even more uncertainty on an already fragile market. “
In the meantime, the end of the Brexit transition era is imminent and while the Chancellor’s announcements yesterday are welcome, we urgently want a zero fee deal agreed and put in place through the end of the year to keep professional production positions at the sector “.
The Revolution bar chain has announced that it may be forced to close some of its services due to new government restrictions on Covid-109.
In a newly published, Revolution said the most recent adjustments, adding 22-hour waste of time and mandatory table service, have “exacerbated” already difficult trading conditions.
Lately you’re consulting with advisors on strategic options. One option is a voluntary agreement of the company (a debt restructuring agreement with creditors that can be used to terminate leases), up to the duration of its estate.
Revolution says:
The Commission is lately assessing the possible effect of the latest developments on the Group’s activities before deciding what the next steps deserve to be. One of the characteristics considered is relief in the duration of the Group’s assets through the status quo of a voluntary trade agreement (“CVA”).
A resolution has not yet been taken and much remains to be done before the Council adopts a resolution on any appropriate course of action. The revolution has a solid balance sheet after the increase in equity of 15 million pounds and the expansion of its banking services announced in June. the Commission takes into account that the long-term nature and the possibility of them having an effect on the most recent operational constraints means that it will have to take into account all the mandatory characteristics to ensure that your business remains viable.
Companies in the bar and restaurant sector warned that early end time would have a serious effect on sales and customer confidence.
It was last night, as shown in this video clip . . . . .
Chief Treasury Secretary Steve Barclay was forced to protect emergency measures announced through Rishi Sunak amid complaints that he will not be saved by an unemployment crisis this winter.
Barclay told Sky News that “unfortunately” each and every task cannot be saved, as can current loan figures.
He explained:
There is a total diversity of investments in the economy in these sectors, while protecting so many jobs that are viable, where other people were protected first with leave of absence and now through the winter program.
“It is right that we also take a look at the burden on the economy as a whole, these measures have a significant budgetary burden and that is why it is right to target jobs that are feasible which, unfortunately, will be a difficult winter. “
Here’s the full story:
Companies that get as close as possible to the Covid-19 pandemic now lead the falls in the London stock market.
British Airways parent company IAG has dropped 5. 7% to 89 pence, its lowest level since November 2011.
Rolls-Royce, which manufactures and maintains jet engines, lost 3% to 145p, its lowest level since early 2004.
Also relegated are the hotel chain Intercontinental (-2. 6%), the real estate developer Land Securities (-1. 8%) compass (-1. 7%). Miners have also fallen for fear that the coronavirus will damage global expansion for some time.
But the FTSE hundred is still stagnant, in fact, with only 10 problems with united Utilities water company elevators (2%), Homeserve repair corporations (1. 5%) Lloyds Bank (1. 5%).
Covid-19 also created a new generation of “reverse travelers,” London-based staff for outdoor work in the capital.
My colleague Hilary Osborne explains:
Londoners are looking for outdoor work in the capital as the city’s economy stagnates, one of the UK’s largest recruitment sites has sprung up, suggesting a wave of “reverse travelers” or an exodus of ongoing residents.
Indeed’s figures of millions of open jobs and research show that on 18 September, the number of tasks published in London fell by 55% to the same date in 2019.
The sharp decline reflects the effect of workplace closures and the reduction of hotel facilities in the city’s labour market.
Many restaurants, hotels and commercial and tourist spaces remain closed or operate at reduced capacity.
With a shortage of vacancies on the ground, Indeed said more task seekers living in London are now looking for paintings elsewhere. In August, the number of other people looking outside London increased by 27% year-on-year, and 30% higher at the start of the year.
Josie Dent, CEBR’s leading economist, also warns that Covid-19’s overall monetary burden is still unknown:
Despite new winter stimulus measures announced through the government, the completion of the licensing program will save the government cash during the months it lasted; however, as unemployment is expected to rise, benefit applications will increase, offsetting some of the cost savings derived in addition, with the spread of coronavirus in sight, the Chancellor will most likely continue to stimulate the economy by supporting staff and businesses for the foreseeable future.
Today’s knowledge highlights the budgetary burden of the coronavirus crisis; however, since social estating is expected to remain in place for at least six months, it will be some time before the full effect of surprise becomes apparent.
Chris Giles of the FT says today’s traditionally high debt figures represent all public spending prices in Covid-19:
The UK’s public finances continued on its way to a record peacetime deficit in 2020-21, and the central government borrowed 221. 2 billion pounds in the first five months of the fiscal year to combat the coronavirus pandemic.
Although this figure is lower than predicted by the Office of Budgetary Responsibility, the budget control body, official statistics still want to incorporate expected losses into government-backed loans to businesses and 24 billion pounds of new NHS expenditures, vaccines and coronavirus testing. . Treasury unveiled Thursday.
The central government’s monetary needs of 221. 2 billion pounds between April and August were 11 times higher than the largest amount of money borrowed at this level of the year since the start of registrations 36 years ago.
Giles also points out that yesterday’s winter economic plan will not go up much to national borrowing (which is why some critics say this program is not enough to cope with losses).
Covid-19’s fears led European stock markets to red numbers this morning.
Airline stocks led the downfall: British Airways’ IAG fell by 5%, Lufthansa in Germany fell 4% and Ryanair fell by 2. 7%.
Europe’s Stoxx 600 index lost about 3. 4% this week, on track for its worst weekly functionality since June.
Increased coronavirus cases and the advent of new restrictions affected inventory costs this week; economists warn that expansion in the UK and eurozone could stagnate in the coming quarter.
Here it is this morning:
Investors are on the lookout for occasions in the United States, where House Democrats are preparing a new $2. 4 billion economic stimulus package, which may come with an aid budget for airlines and restaurants, Politico said.
That’s less than the charge of his existing plan, but higher than Republicans would like. House minority leader Kevin McCarthy rejected the concept of a contingency plan drawn up by Democrats.
Current UK loan figures obviously show the budget burden of the Covid-19 pandemic, says Charlie McCurdy, researcher at the Resolution Foundation:
The budget burden of the Covid crisis reached 173. 7 billion pounds over the summer, and loan accumulation will continue until the end of the crisis.
“August’s loans largely reflect the top spending to fight the virus and its impact, with more than 10 billion pounds spent on retention and self-employment systems this month alone. This highlights the magnitude of the next blow to the popular lives of families as the Chancellor announced relief in support.
“While tax increases will be needed to give public finances back a sustainable foundation, this is not a task for today. Debt service prices declined in August and are likely to continue to do so in the coming years. “
The resolution has also produced several graphicsArray . . . one seems that the loans are lower than the official forecasts so far this year (but this possibly would not last) . . .
. . and how for workers outside of vacations and the self-employed and the VAT relief for hotel corporations have higher indebtedness.
But if the national debt is sharp, the charge of its service remains manageable:
If we take a look at today’s car production figures. . . and the 44% drop in August, UK car production has fallen by more than 40% this year.
The SMMT estimated that this production loss charged brands more than 9. 5 billion pounds, while at least 13,500 jobs would have been eliminated in the UK automotive sector by 2020.
“The news [that production fell by 44% last month] comes as the UK prepares for a momentary wave of coronavirus, with local blockades in position in some parts of the country and stricter social and industrial restrictions on transmission rates.
Therefore, assistance to sectors such as automobiles, where many companies cannot operate at full capacity, is now and the employment assistance programme, as well as other monetary measures announced yesterday, is good news.
These are the key issues of monthly SMMT fitness control in the industry:
Interestingly, the ONS reduced its UK loan estimate in July from more than one billion pounds to 15. 4 billion pounds.
This is a remarkably vital review and shows how complicated it is to keep up with the British economy during the pandemic.
Here is the opinion of Reuters:
British government borrowing reached 35. 920 billion pounds in August, a record point for the month below its peak at the start of the monetary year, as the government dealt with the economic damage of the coronavirus pandemic.
The amount of public borrowing in July was revised down by more than 11 billion pounds, but loans during the first five months of the year rose higher to its highest point at 173. 7 billion pounds, surpassing the annual total at the height of the monetary crisis. .
The UK Office of Fiscal Responsibility’s recent top forecast estimates that year-round loans will amount to a record 372 billion pounds, or 18. 9% of gross domestic product, a proportion observed since World War II.
More information here: UK loans reach new record in August
Britain has already borrowed more than in any year (at more than 173 billion pounds since April), as this chart shows:
Capital Economics’ Andrew Wishard suspects that lending speeds will slow in the coming months as taxation weakens.
In particular, because the leave formula is being replaced by the wage subsidy formula (in which the Treasury would charge up to 22% of a worker’s salary on a reduced-time worker).
Wishard says:
Of course, the government was still expected to borrow a huge amount of cash this year, and borrowing since the beginning of the year is 22% less than the OBR had projected in July. this year (14% of GDP).
However, after an impressive uptick in the 3rd quarter, we believe that the resurgence of the virus and new restrictions will lead to a stagnation in GDP for the rest of the year, affecting tax revenues.
But with the stuttering of recovery and no symptoms of fear in the gold market, the government is right to refocus on supporting the economy rather than raising taxes, Wishard adds.
As a percentage of the economy, the UK’s national debt has now been at its point since 1961 (almost 102% of GDP).
At the time, Harold Macmillan was Prime Minister (playing Greece opposite American Rome), and Britain was still paying off the debts accumulated during World War II.
August’s loans boosted UK public debt to a new record of 2,023. 9 billion pounds.
This represents approximately 101. 9% of gross domestic product (GDP) and 249. 5 billion pounds more than in the same period of the year.
The ONS now estimates that UK loans can exceed 372 billion pounds for the existing monetary year, twice as much as the currency crisis.
Hello and welcome to our ongoing policy of the global economy, money markets, the euro and businesses.
The British economy suffered a double blow from the Covid-19 pandemic this morning: loans increased and car production nearly halved.
The UK borrowed 35. 9 billion pounds last month, reports the Office of National Statistics, a record for August.
This is an accumulation of 30. 5 billion pounds compared to August 2019, and the third highest loan of any month since registration began in 1993.
This means that the UK has borrowed 173. 7 billion pounds since the start of the fiscal year in April, to cover the economic damage of the pandemic.
This is 146. 9 billion pounds more than at the same time last year and indebtedness from April to August (again since 1993).
The ONS says the accumulation of loans was due to declining tax revenues and the continued burden of protecting the economy from the worst crisis in decades.
Recently, Britain can borrow at record levels, with the Bank of England in a position to expand its QE bond purchase program (lately 745 billion pounds) if necessary. Therefore, there is no short-term challenge to financing this debt, and a sudden increase in austerity can derail a fragile economy.
But yesterday, Chancellor Rishi Sunak indicated that the Treasury will face long-term “difficult decisions” after introducing a new system of wage subsidies. This plan will provide something for part-time workers, but it is unlikely to prevent unemployment from emerging sharply. Winter.
And industries, such as the automotive sector, are suffering as the blows of the coronavirus crisis require both at home and abroad.
The Society of Automobile Manufacturers and Traders reported overnight that UK car production fell by 44% last month with August 2019. Factories suffered a decline in exports and also a decrease in domestic orders.
Only 51039 came here from British production lines last month, up from 92153 in August 2019, according to the SMMT.
Mike Hawes, CEO of SMMT, explains:
“This era is worrying British car brands and suppliers, as the coronavirus crisis is weighing heavily on the sector.
For a moment, companies are suffering from a wave of tighter social and industry restrictions, making attempts to restart the sector even more difficult.
After touching a minimum of three months yesterday, European stock markets are expected to go up today, hoping that the deterioration in the economic outlook could lead to more stimulus.
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