Powerscourt

By Powerscourt on 29/11/2020

Powerscourt Coronavirus Briefing – 29 November 2020

ANALYSIS

Boris Johnson is deploying tactics to garner support for his lockdown plans as global cabin fever sets in and vaccines feel tangibly close.

Using the UK’s beloved NHS to tug on Tory heartstrings, Cabinet Office Minister, Michael Gove, graced the pages of the Times yesterday to ask lawmakers to please think of the hospitals and healthcare workers when approving the Government’s new plans for a tougher lockdown, despite the prospect of many months under onerous curbs.

With only 3 days to go until England moves from national lockdown to a tiered system of restrictions, there has been no let-up from Johnson’s own Tory backbenchers voicing their criticisms of these plans. They know, after all, more than anyone that he is partial to a policy U-turn if enough pressure is exerted.

Although Johnson wrote to them yesterday promising “a sunset of 3 February” and fortnightly reviews of the upcoming lockdown style in an effort to sway their support, it doesn’t seem to have had much pull with his own backbenchers. Their prime beef being that the tiers will unnecessarily close businesses (and keep grannies away from their grandkids) in regions that have low infection rates but are assigned the strictest tiers. This, coupled with 155 people being arrested in London yesterday at the anti-lockdown protest, beef may remain on the Christmas menu for some time.

The Pfizer vaccine being approved for use in the UK could mean that the first shots of the 40 million doses order could be in our arms by as early as December 7th. The government has said it would roll out the vaccine via GPs, NHS hospitals and dedicated sites. Who gets priority still hasn’t been decided, although Father Christmas is elderly AND an essential worker…

With the world racing to win, approve and deploy vaccines, Tokyo is preparing for the delayed 2020 Olympics to go ahead in June 2021, whether the world is vaccinated or not. The revised budget for the event will be decided in a couple of weeks, however, it’s estimated that the delay has cost an additional $1.9 billion, and that’s without the additional cost of COVID-19 related measures for the summer games.

The enthusiasm of the Japanese for the delayed games has reportedly faded with just one in four eager to see them happen next year. The British Olympic Association has expressed their fears that it may have to cease their operation if the games are cancelled, claiming the delay has cost them £3 million so far. This announcement comes in the same week record numbers of cases have been reported in Japan and wider East Asia.

 

WHAT ARE COMPANIES SAYING?

Healthcare

Pfizer-BioNTech
The UK is poised to become the first western country to approve a COVID-19 vaccine, with the independent regulator set to grant approval within days. Deliveries of the vaccine developed by BioNTech and Pfizer would begin within hours of the authorisation, according to government officials. The first injections could take place from 7 December. The UK has ordered 40m doses of the two-shot product, which preliminary data found to be more than 95 per cent effective in preventing disease. 

 

Consumer & Retail

Birley Sandwiches
Birley Sandwiches, the City fast-food chain owned by Robin Birley, owner of the Mayfair private member’s club 5 Hertford Street, is on the brink of collapse after it revealed plans to file for administration. The sandwich chain, which was founded by Mr Birley in the early ’80s, has 10 shops in the City of London and has long been a popular lunch spot among bankers and office workers in the Square Mile. Mr Birley said the firm had been trading well prior to the pandemic and was profitable, however the shift to home working during the pandemic and harsh restrictions imposed on the hospitality sector have hit sales. 

 

Financials & Real Estate 

HSBC
HSBC is weighing up a complete exit from retail banking in the US after narrowing the options for how to improve performance at its struggling North America business. Senior management aim to present the plan to the bank’s board in the coming weeks as HSBC seeks to allocate resources away from the US in favour of more profitable businesses in Asia. The US retail network division made a pre-tax loss of $518m in the first three quarters of this year, following losses of $279m last year and $182m in 2018. Executives decided the impact of the coronavirus crisis and prolonged period of ultra-low interest rates required drastic measures. 

Legal & General
Legal & General has racked up a further £30m of losses in its attempt to revolutionise the property market with factory-built homes. Accounts for the FTSE100 insurer’s modular homes division show it has lost a total of £100m since 2016, but generated zero revenues. It aims to produce 3,000 properties from a factory near Leeds, but the project has been beset by delays, namely the COVID-19 pandemic. 

Starling Bank
Lloyds Banking Group and JPMorgan have declined to comment on reports that they could be interested in buying digital challenger bank Starling. The UK’s largest high street lender and America’s biggest bank by assets turned their attention to Starling, founded by Anne Boden, after it opened a data room as part of a plan to raise £200m in new funding. However, it is unclear whether Starling would want to put itself up for sale. Earlier this month, Starling became the first digital challenger bank to be profitable with an £800,000 operating profit for October, as its rivals continue to record large losses. 

Virgin Money
Virgin Money is the latest major bank to call an end to the traditional working day following the success of home working during the pandemic. Britain’s sixth-biggest lender, which pays Sir Richard Branson £11m a year to use the Virgin name, has decided never to go back to its old ways of working and plans to lest most staff choose where and when they work, to varying degrees. The FTSE250 lender’s chief executive David Duffy said the level of flexibility will be different for each role. 

 

IN THE NEWS

Big rebound in corporate earnings foreseen as pandemic shock eases Financial Times

Industry warns 80 per cent of UK pubs face ‘perilous position’ Financial Times

Arcadia, Debenhams – is this the moment COVID finishes off the high street? The Times




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