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Pound retreats after chancellor announces VAT holiday until June - business live New York sees 1,000% increase in unemployment claims - business live
(32 minutes later)
The pound is up as European markets rebound and the UK waits for details of the chancellor’s plan to protect wages in response to Covid-19The pound is up as European markets rebound and the UK waits for details of the chancellor’s plan to protect wages in response to Covid-19
With less than an hour of trading left all the major markets are back in the red - again. If this holds, it will be the worst week on US stock markets since the financial crisis of 2008.
As it stands:
Dow Jones - down 3.3%
S&P 500 - down 3.3%
Nasdaq - down 2.3%
New York - now a major center of new Covid-19 infections - is cracking under the strain of people applying for unemployment benefits.New York - now a major center of new Covid-19 infections - is cracking under the strain of people applying for unemployment benefits.
As restaurants, bars, hotels and other businesses close thousands are trying to get benefits in order to meet their bills.As restaurants, bars, hotels and other businesses close thousands are trying to get benefits in order to meet their bills.
The New York state labor department said it received 159,000 calls by noon on Thursday, compared with the average of 10,000 calls a day. In some parts of the state, the department said, there was a 1,000% increase in claims. The website is seeing a 400% increase above normal in logins each day.The New York state labor department said it received 159,000 calls by noon on Thursday, compared with the average of 10,000 calls a day. In some parts of the state, the department said, there was a 1,000% increase in claims. The website is seeing a 400% increase above normal in logins each day.
You can read the full story here:You can read the full story here:
This as Goldman Sachs is warning new claims for unemployment could pass two million for the week ending March 21, his most conservative estimate of a million claims which would top the record high of 695,000 in 1982.This as Goldman Sachs is warning new claims for unemployment could pass two million for the week ending March 21, his most conservative estimate of a million claims which would top the record high of 695,000 in 1982.
Sterling is in retreat after chancellor Rishi Sunak announced some truly historic measures which will see a big increase in government borrowing.Sterling is in retreat after chancellor Rishi Sunak announced some truly historic measures which will see a big increase in government borrowing.
You can read the main announcements for business here, and follow the reaction to Sunak’s speech here.You can read the main announcements for business here, and follow the reaction to Sunak’s speech here.
The pound is up by 1.2% for the day - a percentage point less than points earlier this afternoon - at $1.1621 against the US dollar.The pound is up by 1.2% for the day - a percentage point less than points earlier this afternoon - at $1.1621 against the US dollar.
Sunak’s announcements came after the FTSE 100 gained 0.76% on Friday, closing at 5,190.78 points - the lowest end-of-week close since 2011.Sunak’s announcements came after the FTSE 100 gained 0.76% on Friday, closing at 5,190.78 points - the lowest end-of-week close since 2011.
In Europe the Stoxx 600 gained 1.8%, with the Cac 40 in France gaining 5%.In Europe the Stoxx 600 gained 1.8%, with the Cac 40 in France gaining 5%.
Dominic Rushe will now take over the live blog. JJDominic Rushe will now take over the live blog. JJ
Here are some more reactions to the chancellor’s emergency package.Here are some more reactions to the chancellor’s emergency package.
Adam Marshall, director general of the British Chambers of Commerce, said:Adam Marshall, director general of the British Chambers of Commerce, said:
Matthew Cady, investment strategist at Brooks Macdonald, an investment manager, said:Matthew Cady, investment strategist at Brooks Macdonald, an investment manager, said:
Kallum Pickering, senior economist at Berenberg, an investment bank, said:Kallum Pickering, senior economist at Berenberg, an investment bank, said:
And the pound is now back to a 1.5% gain, at $1.1665 against the US dollar.And the pound is now back to a 1.5% gain, at $1.1665 against the US dollar.
Some reaction is starting to come in from business groups and unions.Some reaction is starting to come in from business groups and unions.
Michael Izza, chief executive of the ICAEW, an accountancy body, said:Michael Izza, chief executive of the ICAEW, an accountancy body, said:
Mike Clancy, general secretary of Prospect, a union, said:Mike Clancy, general secretary of Prospect, a union, said:
There’s a bit more movement in the pound now, and it’s going in reverse.There’s a bit more movement in the pound now, and it’s going in reverse.
One pound will buy you less than $1.17 - so it has given up some of the earlier gains. It’s up by 1.8% for the day.One pound will buy you less than $1.17 - so it has given up some of the earlier gains. It’s up by 1.8% for the day.
Closing pubs, bars, restaurantsClosing pubs, bars, restaurants
Boris Johnson said all cafes, bars, pubs and restaurants must close tonight.Boris Johnson said all cafes, bars, pubs and restaurants must close tonight.
Nightclubs, theatres, gyms, cinemas and leisure centres must also close on the same timescale.Nightclubs, theatres, gyms, cinemas and leisure centres must also close on the same timescale.
Paying wagesPaying wages
To protect jobs, the chancellor announces that the government will step in and help pay wages, for the first time in UK history. It’s called the coronavirus job retention scheme.To protect jobs, the chancellor announces that the government will step in and help pay wages, for the first time in UK history. It’s called the coronavirus job retention scheme.
Companies and organisations will be able to apply for a grant from HMRC to cover the wages of people who are not working due to coronavirus shutdowns, but who haven’t been laid off.Companies and organisations will be able to apply for a grant from HMRC to cover the wages of people who are not working due to coronavirus shutdowns, but who haven’t been laid off.
It will cover 80% of the salaries of these retained workers, up to £2,500 per month.It will cover 80% of the salaries of these retained workers, up to £2,500 per month.
It means that workers across the company can retain their jobs, even if their bosses can’t afford to pay them, Sunak explains.It means that workers across the company can retain their jobs, even if their bosses can’t afford to pay them, Sunak explains.
VAT holidayVAT holiday
no business will pay VAT from now to June, and they’ll have until the end of the financial year to repay those bills. That should help companies struggling with a cash flow crisis.no business will pay VAT from now to June, and they’ll have until the end of the financial year to repay those bills. That should help companies struggling with a cash flow crisis.
The chancellor this will injection £30bn into the economy.The chancellor this will injection £30bn into the economy.
Business loan schemeBusiness loan scheme
The government is also extending its coronavirus business interruption loan scheme, to be interest free for 12 months (up from 6 months).The government is also extending its coronavirus business interruption loan scheme, to be interest free for 12 months (up from 6 months).
Deferring self-assessment deadline for taxesDeferring self-assessment deadline for taxes
The deadline for self-assessment of taxes will be extended to January 2021, meaning that self-employed people will have longer to pay their taxes.The deadline for self-assessment of taxes will be extended to January 2021, meaning that self-employed people will have longer to pay their taxes.
The announcements appear to have barely affected the pound, which is still up by 2.1% against the US dollar. We will let you know if that changes.The announcements appear to have barely affected the pound, which is still up by 2.1% against the US dollar. We will let you know if that changes.
One pound will buy you $1.1727 at the moment.One pound will buy you $1.1727 at the moment.
The VAT holiday, which will affect almost every business in the UK, will represent a £30bn cash injection into the economy.The VAT holiday, which will affect almost every business in the UK, will represent a £30bn cash injection into the economy.
Chancellor Rishi Sunak is announcing historic measures to help businesses.
No businesses will pay VAT until the end of June, a deferral of tax payments for another quarter.
Boris Johnson has ordered pubs, cafes, bars and restaurants to close tonight as soon as they reasonably can.
Night clubs, gyms, cinemas and leisure centres should also close, he says.
Boris Johnson is now talking in his daily briefing. He is joined by chancellor Rishi Sunak.
Please go to the UK coronavirus live blog to follow coverage live.
EasyJet will ground the majority of its aircraft fleet from Tuesday 24 March, the airline has announced.
It will conclude rescue flights to repatriate customers by Monday, and will at most continue to run “a minimal schedule” of essential, mainly domestic routes.
With so many no-shows in recent weeks, EasyJet urged customers who do not intend to travel to rebook now to match any remaining flights to demand.
The airline has asked staff to take three months unpaid leave, but angered unions by also trying to reduce terms and conditions such as flexible rosters and meals.
*And apologies for the repetition on airlines’ unapid leave earlier. JJ
Sterling is up by 2.2% against the US dollar this week - although it is down by 8.4% in the month to date, an indication of just how rough the past few months have been.
The rise in the dollar’s value has been sparked by companies’ need to get hold of the reserve currency in any way they can, even if that means exchanging other currencies or even assets like bonds that are usually thought of as a boon during times of market turbulence.
Today the pound and other currencies have been aided by further central bank interventions to keep the flow of dollars coming. As this Reuters report explains:
The global aviation industry is going through unprecedented turmoil, and companies are desperate to secure their financial future.
That will mean pay halving for the next two months for British Airways pilots and potentially worse for Easyjet as the effects of global travel restrictions take hold, according to Reuters.
A quick spin around global markets as Europe’s trading day ends.
London’s FTSE 100 is up by 0.1%. That would almost look like a normal day - but it masks some big individual moves either way.
The FTSE 250 has gained 4.8%.
The Euro Stoxx 600 has gained 1.4%, buoyed by a 4.3% jump on France’s Cac 40 and 3% on the German Dax index.
US stock market indices are in the red, with the S&P 500 down by 2%.
Sterling has gained 2.2% against the US dollar. The euro is flat against the dollar.
Brent crude oil futures have gained 2.2% over the course of another bumpy day, with prices at $27.82 per barrel.
The three main US stock market indices have now all fallen back into the red.
The S&P 500 has lost 1.6%, the Dow Jones industrial average has lost 1.2%, and the Nasdaq composite is down by 1%.
The Farnborough air show, the UK aerospace industry’s key event, has been cancelled because of the coronavirus outbreak.
The biannual show had been scheduled for July, with tens thousands of executives and air fans due to gather in Hampshire. The show is usually the occasion for deals worth tens of billions of pounds.
In a statement, the organisers said:
JP Morgan is handing its front-line bank staff in the US $1000 each for working through the Covid-19 outbreak.
The measure is meant to support staff across its retail banking operations who have to keep its bank branches and call centres running and can’t work from home.
A memo sent to staff on Friday said front-line staff would receive a “one-time Covid-19 special payment equal to a maximum of US$1,000”.
This won’t apply to the bank’s near 16,000 UK employees, most of which work for its investment bank. Instead, they’re being offered up to five extra paid days leave to help staff manage care and service disruptions during the outbreak.