By Powerscourt on 10/05/2020
At 7pm today, Boris Johnson makes his much-trailed televised address to the British people. The talk ahead of that talk has swung back and forth depending on which group seems to have the upper hand: the so-called ‘hawks’, ministers who want to reopen the economy, and the others who want to beat the virus first, economic misery notwithstanding.
We are now getting more concrete detail into the likely contents of the Prime Minister’s speech. Gone is the “Stay Home, Protect the NHS, Save Lives” slogan to be replaced by “Stay Alert, Control the Virus and Save Lives”. The PM is going to unveil a new 5-tier Covid-19 warning system as part of his road map to gradually unlocking the economy in the week after the Bank of England warned the country was on course for its sharpest recession on record. The Government will encourage those who cannot work from home to return to premises such as offices and factories, provided they can do so safely.
In the daily briefing yesterday however, Transport Secretary Grant Shapps warned that the 2-metre social distancing rule meant that even when the UK transport networks returned to operating at full capacity, only one in 10 passengers would be able to travel, to minimise the risk of transmitting the virus. What that means for the UK’s millions of daily commuters is less clear. It also poses questions for TfL, which is burning through £21 million a day, giving it another 2 months before running out of money and needing a Government bailout as passenger numbers collapse (it has asked for £2 billion urgently).
So, whatever we are told tonight, it is premature to see this as much of a relaxation of the lockdown strategy, even if the Garden Centres do open. The PM is also likely to confirm that from next month, passengers arriving at British airports and ports (other than from Ireland) will be placed in quarantine for up to a fortnight.
Away from the UK, both China and South Korea reported new spikes in cases on Sunday, setting off fresh concerns in countries where outbreaks had been in decline, though life in Italy and Spain looks to be returning to normality rapidly, as they emerge from a much tighter lockdown.
WHAT ARE COMPANIES SAYING?
Consumer and Retail
The online retail platform has said that in April alone, 50,000 new independent retailers have signed up to the online trading site as sellers. Rob Hattrell, boss of eBay’s UK arm said that “Businesses are trying to find a way to survive.” This follows recent figures from BDO which show that sales at high street stores fell by 93%, while online and catalogue sales increased by 109%. eBay reported that it has seen overall shopper numbers double since the start of the lockdown, with specific products doing much better than others. Hot tub sales are up 480%, while dumbbell and resistance band sales are up 220%.
UK supermarket chain Morrisons is expanding its current partnership with Amazon to deliver same-day grocery deliveries in response to increased demand. The company has said that by the end of May, Amazon Prime customers will be able to order same day delivery groceries from 40 stores, up from 17 in March. The company is set to formally announce this at a trading update on Tuesday.
The recipe box company has seen a 452% rise in customer numbers since the end of March. It has also seen a 387% increase in sales of its recently launched frozen meals. The company said that it had converted its workplace canteen to “grab-and-go food” and was enforcing two-metre distancing in its factory. Staff are also being temperature-checked when they arrive for work. The company’s competitors have seen similar trends, with UK based Gousto hiring an additional 400 staff to meet demand and Hello Fresh reporting customer numbers up 89% in Q1.
Financial Services & Real Estate
The UK bank has come under some criticism for not providing an explanation for why customers had been left waiting for money to come through its bounce back loans scheme. Barclays said it had approved more than 50,000 loans worth £1.5bn last week. The Sunday Times reports that sources close to Barclays said “error messages” on its site should be fixed early this week. The bank said: “We’re sorry some customers are experiencing issues.”
Industrials & Transport
The US airline has announced that it has abandoned its attempt to raise $2.25 billion in a bond issuance. The bonds would have payed as much as 10% interest, and the company was planning to use the money to pay a loan secured in March. The company did not say in any public statement why the issuance was scrapped, however the Financial Times reported that it was based on the high rate of interest the company would have been forced to pay. Separately, the company has applied for $4.5 billion of further secured loans from the US federal bailout fund, however has decided whether or not to tap into them yet.
Having been told by the Alameda County health department that Tesla was not able to re-open its factory as planned, CEO Elon Musk has sued them. The company said that it had informed health authorities in Alameda County, where the Fremont factory is located, about its restart plans, but claimed the acting official did not return calls or emails. The company said that the county authority was going against the federal and California state constitutions.
Sky News has reported that the airline has put advisers ‘on standby’ to handle a potential administration as it continues its efforts to secure a £500m rescue fund. The company has retained Alvarez and Marsal, a restructuring specialist, to draw up contingency plans for a possible insolvency.
IN THE NEWS
Coronavirus: 100,000 dead if UK eases lockdown too fast, scientists warn – Sunday Times
Trillion-dollar club tightens grip on fund market during crisis – Financial Times
Top U.S. Health Officials Will Quarantine After Being Exposed – New York Times