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You can find the current article at its original source at https://www.theguardian.com/business/live/2020/mar/11/financial-markets-coronavirus-fears-bank-of-england-slashes-interest-rates-business-live
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| Wall Street stocks fall amid concerns on coronavirus response – business live | |
| (32 minutes later) | |
| The escalating coronavirus crisis has forced the first emergency UK interest rate cut since 2008 | The escalating coronavirus crisis has forced the first emergency UK interest rate cut since 2008 |
| Sunak has just finished his budget – after one hour and three minutes. | |
| Sterling has ended up after the budget... almost exactly where it was before. It’s a gain of 0.25% for the day to $1.2940. | |
| UK government bond yields have actually fallen – not the response that you would usually expect after a relatively big fiscal expansion. The 10-year gilt is at 0.26%, having hovered around 0.3% as Sunak started speaking. (Bond yields fall as prices rise when investors buy more debt.) | |
| There is still a lot more to come on the political response which you can follow here: | |
| The S&P 500 is down by 2.6% at the opening bell to hit 2,808 points, while the Dow Jones industrial average has fallen by 2.7% to 24,337 points – a 671 point fall. The Nasdaq lost 2.4%. | |
| Lufthansa has just announced thousands of flight cancellations in response to the coronavirus, covering the period from 29 March to 24 April. | |
| The German flag-carrier had already said it would cancel as many as half its flights. | |
| Sterling is now flat for the day against the dollar – possibly a reaction to a budget that looks pretty expansionary on the fiscal front. | Sterling is now flat for the day against the dollar – possibly a reaction to a budget that looks pretty expansionary on the fiscal front. |
| A pound now buys $1.292 against the US dollar, a gain of 0.07%. | A pound now buys $1.292 against the US dollar, a gain of 0.07%. |
| Sunak says he will limit entrepreneurs’ relief, the heavily criticised tax break given to people who sell their businesses. | Sunak says he will limit entrepreneurs’ relief, the heavily criticised tax break given to people who sell their businesses. |
| The relief was “expensive [...] ineffective and [...] unfair”, Sunak says. | The relief was “expensive [...] ineffective and [...] unfair”, Sunak says. |
| The lifetime limit on how much relief sellers can claim will fall from £10m to £1m. | The lifetime limit on how much relief sellers can claim will fall from £10m to £1m. |
| The £6bn raised over the next five years from the change will be spent on tax reliefs on research and development, buying buildings, and increasing employment allowance. | The £6bn raised over the next five years from the change will be spent on tax reliefs on research and development, buying buildings, and increasing employment allowance. |
| While Sunak has been speaking the market selloff has accelerated. | While Sunak has been speaking the market selloff has accelerated. |
| The FTSE 100 is now down by 0.3%. S&P 500 futures indicate Wall Street could fall by 3.3% in 25 mins when markets open. Dow Jones industrial average futures are down by 3.1%. | The FTSE 100 is now down by 0.3%. S&P 500 futures indicate Wall Street could fall by 3.3% in 25 mins when markets open. Dow Jones industrial average futures are down by 3.1%. |
| CBI lead economist Alpesh Paleja notes that the Office for Budget Responsibility’s forecasts need to be taken with a large dose of salt. | CBI lead economist Alpesh Paleja notes that the Office for Budget Responsibility’s forecasts need to be taken with a large dose of salt. |
| The government will boost spending by £175bn over the next five years, increasing productivity, Sunak says. | The government will boost spending by £175bn over the next five years, increasing productivity, Sunak says. |
| Growth will be 0.5 percentage points higher than it would have been without the spending, he says, citing the Office for Budget Responsibility’s forecasts. | Growth will be 0.5 percentage points higher than it would have been without the spending, he says, citing the Office for Budget Responsibility’s forecasts. |
| Pre-coronavirus the OBR had forecast GDP growth of 1.1% in 2020, 1.8% in 2021, 1.5% in 2022, 1.3% in 2023, and 1.4% in 2024. | Pre-coronavirus the OBR had forecast GDP growth of 1.1% in 2020, 1.8% in 2021, 1.5% in 2022, 1.3% in 2023, and 1.4% in 2024. |
| The total fiscal response to the coronavirus outbreak is £30bn, Sunak says. | The total fiscal response to the coronavirus outbreak is £30bn, Sunak says. |
| Sterling has pared some of its gains – it’s now up by 0.1% for the day against the US dollar (having a few minutes earlier been up by 0.3%). | Sterling has pared some of its gains – it’s now up by 0.1% for the day against the US dollar (having a few minutes earlier been up by 0.3%). |
| Sunak announces a temporary business interruption loan scheme, which he says will unlock up to £1bn of working capital loans. | Sunak announces a temporary business interruption loan scheme, which he says will unlock up to £1bn of working capital loans. |
| Retailers, leisure and hospitality businesses with a rateable value less than £51,000 will have business rates abolished for the coming year. | Retailers, leisure and hospitality businesses with a rateable value less than £51,000 will have business rates abolished for the coming year. |
| The policy will cost £1bn, an average of £25,000 per business. | The policy will cost £1bn, an average of £25,000 per business. |
| There will also be a £3,000 cash grant to every small business. | There will also be a £3,000 cash grant to every small business. |
| Sunak says that the coronavirus response has been “clearly and closely coordinated with the Bank of England”. | Sunak says that the coronavirus response has been “clearly and closely coordinated with the Bank of England”. |
| He pledges to use fiscal action with a three-point plan: | He pledges to use fiscal action with a three-point plan: |
| Sterling is up by 0.2% for the day as Sunak says there will be supply-side and demand-side effects from coronavirus. | Sterling is up by 0.2% for the day as Sunak says there will be supply-side and demand-side effects from coronavirus. |
| But he adds that it will be temporary. | But he adds that it will be temporary. |
| Shares on the FTSE 100 have fallen back into the red, now down by 0.2% today. | Shares on the FTSE 100 have fallen back into the red, now down by 0.2% today. |
| Shares around the world appear to be back on the retreat, with US futures suggesting that there could be another steep selloff when the market opens. | Shares around the world appear to be back on the retreat, with US futures suggesting that there could be another steep selloff when the market opens. |
| Rishi Sunak is up now delivering his first budget. | Rishi Sunak is up now delivering his first budget. |
| Renowned emerging markets investor Mark Mobius has noted that not all of the global selloff has been warranted. | Renowned emerging markets investor Mark Mobius has noted that not all of the global selloff has been warranted. |
| Speaking on Bloomberg television, he said that there are “incredible opportunities and bargains” in emerging markets and gold, the traditional safe-haven asset. The chaos on oil markets will hurt oil companies and exporters, but it could also cushion the blow for consumers. He said: | Speaking on Bloomberg television, he said that there are “incredible opportunities and bargains” in emerging markets and gold, the traditional safe-haven asset. The chaos on oil markets will hurt oil companies and exporters, but it could also cushion the blow for consumers. He said: |
| There are “terrific bargains in Turkey”, while Indonesia will also benefit from lower oil prices, he added. But there are still big risks out there (not least given potential disruption to financial markets). It is “time to buy like the way porcupines make love”, Mobius said. His interviewer helpfully chimed in with the answer: “Carefully”. | There are “terrific bargains in Turkey”, while Indonesia will also benefit from lower oil prices, he added. But there are still big risks out there (not least given potential disruption to financial markets). It is “time to buy like the way porcupines make love”, Mobius said. His interviewer helpfully chimed in with the answer: “Carefully”. |
| Hello, Jasper Jolly here. I’ll be focusing on global markets as the coronavirus turmoil continues, so head to the budget live blog for a UK focus (although I’m sure a bit of budget reaction will sneak in here as well). | Hello, Jasper Jolly here. I’ll be focusing on global markets as the coronavirus turmoil continues, so head to the budget live blog for a UK focus (although I’m sure a bit of budget reaction will sneak in here as well). |
| That Goldman Sachs note from a few minutes ago does not appear to have helped global markets: US stock market futures have extended their declines – in spite of the Bank of England’s intervention today. | That Goldman Sachs note from a few minutes ago does not appear to have helped global markets: US stock market futures have extended their declines – in spite of the Bank of England’s intervention today. |
| Futures for the S&P 500 are down by 2.8%, and Dow Jones industrial average futures are down by 2.6%. | Futures for the S&P 500 are down by 2.8%, and Dow Jones industrial average futures are down by 2.6%. |