By Powerscourt on 26/07/2020
A day of bad news for those hoping that coronavirus was on the wane – global coronavirus cases have seen their biggest single-day increase to date, with a rise of more than 284,000 in just 24 hours. Deaths from the disease also surged to their highest one-day level since April, according to the World Health Organisation, after it warned the world would not return to the “old normal”.
There is concern closer to home as well – which is impacting those Brits who have decided to head to the Costas for some sun this summer. Spain is taking new measures to cut what officials are calling a significant new spike in coronavirus cases, amid fears of a more widespread “second wave”. In response travellers returning to the UK from Spain after midnight tonight will have to quarantine for 14 days, the government has said.
That other national favourite – the curry – is also under threat according to the Financial Times. The paper reports that the Indian restaurant trade has been battered by the lockdown despite a growth in takeaways – and that despite the easing of lockdown rules – customers are in still in short supply.
In some ‘good news’, UK retail sales were near pre-lockdown levels in June, as the reopening of shops released pent-up demand. The amount of goods sold last month increased by 13.9% compared to May according to the Office for National Statistics. June’s rise in retail sales followed record falls in April and a partial recovery in May as the coronavirus pandemic led to widespread shop closures. But it masked “big changes” in retail, with food and online sales up, while clothing was still “struggling”, the ONS said. Online sales continued to go “from strength to strength”, the ONS added, accounting for £3 out of every £10 spent by consumers.
Turning to the future for UK businesses and the FT reports that the Treasury is in talks with the UK’s largest banks about an industry-wide plan to help tackle the tens of billions of pounds of bad debts expected under the government’s light-touch coronavirus “bounce back” loans scheme. Over £33bn has been borrowed by more than 1 million small companies. The Office for Budget Responsibility said this month that up to 40 per cent of these loans could default, with £53bn assumed to be lent in the six months the scheme will run – suggesting the scheme could cost the taxpayer £16bn. An option being discussed by officials and bankers is to extend loans for up to a decade to give struggling borrowers more time to repay. The Banks are believed to be against long extensions, wary of the greater work and risk.
WHAT ARE COMPANIES SAYING?
Retail & Consumer
Kate Nicholls, chief executive of lobby group UK Hospitality, said hotels in the luxury sector as well as conferencing and banqueting have been “particularly badly hit” during the pandemic, with 20% of jobs at large chains now at risk. About 1,000 jobs are vulnerable at Marriott hotels, which is consulting over redundancy at the 60 it manages in Britain, and its offices. Millennium, owned by Singaporean tycoon Kwek Leng Beng, has also started a redundancy consultation with staff. The InterContinental Hotels Group (IHG), owner of Holiday Inn and Hilton has announced 2,100 cuts globally.
The Sunday Times reported the Bullring owner has had to tap into the government support scheme after collecting just 16% of rent it was due in June. Hammerson issued £75m of debt under the government’s Covid corporate financing facility (CCFF) this month and now there are fears mounting over its future prospects with shares plummeting by 77% this year.
Industrials & Transport
The Telegraph reported Rolls-Royce is exploring an emergency sale of its ITP Aero division, which makes parts for the Eurofighter Typhoon, as part of its efforts to raise billions to see it through the pandemic. The engineer is in early talks for a quick sale of the division to a private equity buyer prompted by the crisis as it battles a collapse in fees it normally makes from selling and maintaining jet engines for airliners.
Ryanair has threatened to take the Irish government to the High Court if it does not expand the “green list” of safe countries to include Britain and the 27 EU member states according to the Sunday Times. Last week the airline wrote to Micheál Martin threatening an injunction and judicial review within seven days if the government did not revise its list of lower-risk countries to include popular travel destinations including Britain, France, Spain and Germany.
The South Korean pharmaceutical company backed by Bill Gates, may be capable of producing 200 million coronavirus vaccine kits by next June, the Microsoft Corp, co-founder said in a letter to South Korean President Moon Jae-in. Bill Gates has been seeking to cooperate closely with the South Korea to develop a vaccine according to Bloomberg.
Currys PC World, JD Sports, Sotheby’s, Jigsaw and Accenture have all pulled online adverts from Google after a Sunday Times investigation found the tech giant placed them on websites spreading “dangerous nonsense” about vaccines and the coronavirus. The five companies demanded Google remove their ads from websites promoting false claims that vaccines cause autism and that people who have a Covid-19 vaccine will have a tracking chip implanted in them. According to the Sunday Times, Google was accepting web pages that violate its policies and as a result was earning millions of pounds in revenue via its digital advertising platform. Google takes about 30% of the money generated from these ads.
IN THE NEWS
Treasury and banks in talks to tackle coming wave of bad Covid debt – The Financial Times
EY Item Club warns Covid contraction could last until 2024 – The Sunday Times
Tourists must quarantine on return home from Spain – The Telegraph