By Powerscourt on 28/06/2020
For many, this weekend was to be about dancing around a large field in Somerset in the company of Taylor Swift, Sir Paul McCartney and others. Those who survived the online stampede and secured Glastonbury tickets will have to try again next year. Perhaps they’ve joined those who’ve decided to pitch tents in their back gardens and watch highlights from previous years. At least the local cows are enjoying the peace and quiet organiser Emily Eavis told the Times yesterday.
On a more serious note, we should be looking in the other direction to north-western Germany this weekend as Europe faces its first major test in battling new outbreaks of coronavirus after lockdowns were lifted. With more than 640,000 people now back in lockdown, scientists will be keenly watching Germany’s efforts to contain the virus to see if it can provide a template for dealing with the inevitable coronavirus clusters that will emerge as restrictions are eased.
This is particularly relevant given the UK government is thought to be considering its first local lockdown within days after it was revealed that there were 658 coronavirus cases in the Leicester area in the two weeks to 16 June. A worried Matt Hancock is reportedly considering all options to contain the spike.
Switzerland substantially relaxed lockdown on June 22 allowing up to 1,000 into entertainment venues. This, it is quarantining 300 Zurich clubbers after an outbreak there.
Reuters calculates that there have now been 10m cases globally and the virus is hitting new records in India, South Africa and Brazil which now has more than 1m cases.
Statistics from the US continue to make for grim reading as the number of confirmed cases rose to more than 2.5 million on Saturday with record rises again in Arizona and Florida among other states. On Friday, Vice President Mike Pence defended holding political rallies. Late Saturday, he pulled out of planned rallies to be held in Arizona and Florida next week.
Closer to home, Scotland has reported no new deaths of people who had tested positive for coronavirus for the second day in a row. Nicola Sturgeon has said the country is working towards the “total elimination” of the virus with a prominent public health expert predicting it could be Covid-free by the summer if the decline in new cases continue.
It seems that Project Birch, set up by the Chancellor to help companies deemed strategically important but unable to access other government loan schemes, applies very strict criteria to those looking to access it to ensure value for money for the UK taxpayer. The FT says just six companies are in talks for the money, including Jaguar Land Rover and Tata Steel. They have to agree to strict conditions including curbs on executive pay. Mr Sunak has made clear that companies seeking bailouts would face an ‘exceptionally high bar’ and that he would not take stakes in return for taxpayer cash saying he shouldn’t be the one “trying to pick winners.” One of those seemingly unable to secure state backing is Virgin Atlantic which is now looking to raise £900 million (up from £750m) from debt funds to secure the future of the business. Alverez & Marsal is lined up as administrator if talks fail.
Looking ahead to the coming week, all eyes will be on Boris Johnson on Tuesday where he will deliver an address deigned to reset the agenda with an economic recovery plan promising a “decade of investment”. His plan cannot come soon enough though as the British Chamber of Commerce quarterly survey also expected this week is expected to show the biggest fall in economic activity in the 31 years the report has been published.
WHAT ARE COMPANIES SAYING?
Consumer & Retail
The Hut Group
Online beauty retailer The Hut Group (THG) has reignited speculation that it is heading for a long-awaited £5bn stock market debut after lining up meetings with an array of blue-chip investors including Schroders, T Rowe Price and Fidelity. Bankers are pushing privately held online retailers to consider floating after the enforced closure of all non-essential shops for three months because of the coronavirus lockdown funnelling more business onto the web. Stock market investors have piled into online retailers, betting that behavioural changes brought about by COVID-19 will stick.
Industrials & Transport
Virgin Atlantic is trying to raise up to £900m within days to avoid collapse. The airline, founded by Sir Richard Branson, has pumped up its bailout plans from £750m and is in talks with debt funds as hopes of a state-backed rescue fade. Virgin’s increased cash call underlines the dire state of an industry battered by the grounding of planes and the government’s quarantine. Long-haul carriers such as Virgin are due to be among the slowest to see passenger numbers recover.
IN THE NEWS
Coronavirus drags factories and services to record slump, British Chambers of Commerce to report – The Times
Six companies in ‘Project Birch’ rescue talks with Treasury – The Financial Times
With travel restrictions set to be lifted, sales of air tickets are rocketing – The Times