UK virus cost soars in April as borrowing hits record high

( via – – Fri, 22nd May 2020) London, Uk – –

Government borrowing surged to £62bn in April, the highest monthly figure on record, after heavy spending to ease the coronavirus crisis.

It means the deficit – the difference between spending and tax income – was larger last month than forecast for the whole year at the time of the Budget.

The data from the Office for National Statistics revealed the soaring cost of support, such as furlough schemes.

But Chancellor Rishi Sunak said things would be worse without government aid.

The government's independent forecaster, the Office for Budget Responsibility (OBR), has predicted that borrowing for the whole year could reach £298bn, more than five times the estimate at the time of the March Budget.

Jonathan Athow, deputy national statistician at the ONS, described April's figure as “pretty much unprecedented”. It said the cost of furlough schemes alone was £14bn in April.

“Borrowing now is about six times what it was [in April] last year, so we are talking about some really significant changes in the government finances,” Mr Athow told the BBC.

He added it was impossible to forecast the current year's public finances because of the “high amounts of uncertainty”. Tax receipts have fallen heavily, as the Treasury has allowed companies to defer some payments. The amount received from VAT in April was negative, with the government collecting less than was handed back in repayments.

How much does the government spend?

  • More than £880bn was spent on services such as defence, policing, the NHS, schools and welfare benefits in the last financial year
  • Most of this comes from taxes, which totalled about £840bn last year
  • Usually the government spends more money than it has. It borrows money by selling bonds – a promise to repay the money with interest
  • The total debt has increased over time. It is currently £1.9 trillion – about £28,000 per person in the UK
  • Although the debt in cash terms has gone up, money raised from taxes has risen too, which means the debt can be manageable

Meanwhile, borrowing by the state in March 2020 has been revised up by £11.7bn to £14.7bn, the ONS said.

It said this was driven by a reduction in previous estimates of tax receipts and National Insurance contributions.

The surge in borrowing comes after Chancellor Rishi Sunak stepped up financial support for businesses and employees after vast areas of the economy were forced to halt due to the coronavirus lockdown.

After publication of the figures, Mr Sunak said that if the government had not provided financial support, the cost to the economy and people's livelihoods would be much worse.

“Our top priority is to support people, jobs and businesses through this crisis and ensure our economic recovery is as strong and as swift as possible,” he said.

“That's why we've taken unprecedented steps to provide lifelines to people and businesses with our furlough scheme, grants, loans and tax cuts.”

Analysis By Dharshini David

Buy now – worry later?

For the past decade, the government had been trying to practise strict financial housekeeping, aiming for position where it could cover day-to-day spending with the money form our taxes and eliminate the deficit.

But then the crisis hit – and as the chancellor claims, the schemes put in place have provided a lifeline to tide millions over, to prevent an even bigger economic disaster. It was worth ripping up the rulebook for, he said.

However the bills are mounting, just as the amount received from taxpayers slumped.

This year's deficit could be the equivalent of the biggest slice of our income since the Second World War – and that hole needs plugging

For the moment, the government has increased its borrowing on financial markets, through bonds, effectively IOUs – but there is a limit to how much it can do so.

Ultimately, economists say taxes will have to rise, or spending cut – the emergency raft will have a price tag which we can't escape

But the chancellor will have to impose those carefully to avoid jeopardising a recovery. And if he opts for tax hikes, he'll risk breaking some election promises

‘Britain is poorer'

The scale of the economic consequences was underlined on Friday in separate retail sales data from the ONS. These showed that High Street sales crashed last month as shops closed for the lockdown.

It was also announced on Friday that a mortgage payment holiday scheme for homeowners in financial difficulty during the pandemic has been extended for another three months.

As a result of the jump in borrowing, total public sector debt rose to £1,888bn at the end of April – £118.4bn higher than April 2019.

Former chancellor George Osborne told the BBC: “We have to come to terms with the fact that Britain is poorer and the economy is smaller than it would have been.”

Asked if the economy would bounce back, he said: “Bounce is the wrong word, but it will recover.”

Ruth Gregory, an economist at Capital Economics, described April's borrowing as “alarmingly high”, but added that a small easing of the lockdown from 13 May probably meant the government would not have to borrow as much this month.

And despite the pressure on public finances, Charlie McCurdy, a researcher at the Resolution Foundation, said there were no signs the government was struggling to raise money on the financial markets.

“Record low interest rates mean the UK's higher debt burden should remain more than manageable,” he said.

EasyJet announces cautious restart on some routes from 15 June with strict face mask rule

( via– Thur, 21st May 2020) London, Uk –

The airline announces a cautious restart on some routes from 15 June ahead of an investor vote that could see its CEO forced out.

EasyJet says it plans to resume a small number of flights next month with strict safety protocols for passengers and crew alike.

Top of the measures, the no-frills carrier said, would be the wearing of face masks for all those aboard its aircraft.

The company said it would likely operate domestic flights within the UK and France from 15 June with the only international service being Gatwick to Nice initially.

The UK airports to see the limited domestic services return will be Bristol, Birmingham, Gatwick, Liverpool, Newcastle,
Edinburgh, Glasgow, Inverness and Belfast, easyJet added.

Shares were more than 2.5% up in early trading after a plunge of 60% in the year to date.

The airline made its announcement as it faces a series of headaches away from flight operations – largely grounded by COVID-19 since March.

It revealed on Tuesday a hacking of its digital systems that exposed personal details of nine million customers.

The easyJet chief executive and chairman are also facing a fight for their futures as the airline's founder, Sir Stelios Haji-Ioannou, bids to have them removed from their posts in a shareholder vote due on Friday.

Easyjet has furloughed thousands of staff and borrowed £600m under a government-backed financing scheme as it seeks to shield itself from the effects of the coronavirus crisis that has hit the industry hard, with BA, Ryanair and Virgin Atlantic collectively planning 18,000 job losses.

It said that the cautious commencement of flights would only go ahead with a series of measures agreed with regulators and in-line with the advice of national governments.

These steps include:

:: Customers, cabin and ground crew will be required to wear masks

:: Enhanced cleaning and disinfection of easyJet aircraft

:: Availability of disinfectant wipes and hand sanitiser onboard

EasyJet said there would be no onboard food service.

The Luton-based airline looks set to be the second operator to resume flights after Wizz Air restarted services from the town's airport earlier this month.

BA and Ryanair are targeting July.

Johan Lundgren, the easyJet chief executive, said of its plans: “These are small and carefully planned steps that we are taking to gradually resume operations.

“We will continue to closely monitor the situation across Europe so that when more restrictions are lifted the schedule will continue to build over time to match demand, while also ensuring we are operating efficiently and on routes that our customers want.”

By James Sillars

Britons spurned by banks caught in a coronavirus credit crunch

( via — Thur, 21st May, 2020) London, UK —

LONDON (Reuters) – When a payroll glitch left Natalie Gallagher so short of cash this month she couldn’t afford her bus fare to work, she turned to her usual lender Amigo for an emergency top-up loan.

But she was out of luck. Like many of the lenders that thousands of higher-risk borrowers in Britain depend on, Amigo had tightened its criteria for handing out cash in the wake of the coronavirus.

“They approved my top-up but 10 minutes later I got a text saying my reason for the top-up isn’t one they were doing right now,” she said. “Amigo was my only real option.”

While mainstream banks have been obliged to give customers payment holidays on mortgages and discounted three-month overdrafts, less support has been offered to so-called subprime borrowers who often need extra cash just to stay afloat.

Some lenders have closed their doors to new customers while others have been unable to extend cash lifelines to borrowers since lockdown restrictions banned weekly visits by doorstep lending agents to their homes.

According to the Money Advice Service, about 17 million people in Britain have less than 100 pounds in savings to dip into when a crisis strikes and those working in some of the sectors worst hit by the pandemic are particularly vulnerable.

More than 6 million workers in the retail, travel, hospitality and beauty sectors are 25% more likely than people in other industries to have no money to fall back on, the Centre for Social Justice think-tank said last month.

“The bottom line is that there’s nowhere for these people to go,” Roger Gewolb, founder of loan comparison site FairMoney said. “The consumer lending market has come to a standstill.”

Gallagher, 29, from Manchester in northern England, said while past debts with payday lenders such as Wonga had damaged her credit rating, she was surprised to be rejected this month.

“I’d understand if I wanted a new loan or had missed payments but I have never missed a payment,” said Gallagher, who works with offenders.

A spokesman for Amigo said Gallagher’s request was declined because the purpose of the loan wasn’t covered in its current lending criteria, which have been tightened since the pandemic.

“An Amigo loan is intended for considered purchases, rather than day-to-day expenses; this is why the minimum loan we offer is 1,000 pounds ($1,225).”


While some low-income borrowers just struggle to budget, others have been blacklisted by the mainstream financial system and rely on alternative credit providers such as guarantor or doorstep lenders to make ends meet.

Credit score provider ClearScore, which shows consumers what deals are available based on their circumstances, said subprime borrowers could on average access only 0.17 of loans in a snapshot of the market on May 16. On Jan. 1, the average was 1.

On the same date in May, prime borrowers on average found 1.79 loans available, while those in the middle, or non-prime borrowers, found 0.81 products on average.

Britain’s largest subprime lender, Provident Financial Group, has tightened its underwriting criteria while rival Non-Standard Finance is now only lending to key workers such as doctors, nurses, supermarket staff and delivery drivers.

The subprime credit market had already shrunk in recent years after tighter regulation and interest rate caps pushed a slew of payday lenders out of business.

Without financial safety nets and affordable access to credit, millions of hard-up Britons have sought government welfare payments, with 2.5 million applications for Universal Credit benefits between March 16 and May 5.

Almost 11 million people have missed or expect to miss a bill that could result in bailiff enforcement and even eviction, research from the Citizens Advice Bureau shows.

Debt charities say the absence of government schemes to help indebted Britons at a time when subprime lenders are pulling back from the market has been keenly felt.

“High-cost short-term credit may seem to offer a short-term financial stopgap but too often it can become an expensive repeat trap,” said Sue Anderson at debt charity StepChange.

“It is unlikely to represent a sustainable solution to people’s financial pressures, whereas a well-designed no-interest loan scheme could potentially make a helpful contribution,” she said.

Plans to offer interest-free loans to some struggling borrowers – a policy proposed by former finance minister Philip Hammond in 2018 – have yet to come to fruition.

A Treasury spokesman said it remained committed to working with stakeholders with a view to piloting a scheme to support the most vulnerable and sustainable over the longer term.

Lenders are prohibited from selling credit to anyone they don’t think can pay it back, which is likely to exclude many people who have lost their jobs so far in the pandemic.

That means those employed in industries hit badly, or those who have seen their household income cut whilst on furlough, are finding a dwindling range of options among subprime lenders.

“I would imagine 35% of the population are now in this non-prime or subprime position and there’s more coming,” FairMoney’s Gewolb said. “All they can do is find a guarantor or have a conversation with a guy down the boozer who has friends with baseball bats and no consumer credit licence.”


The England Illegal Money Lending Team, which investigates and prosecutes loan sharks, said it was launching a live website chat on May 26 to give victims another safe way to seek advice and support.

“These unpleasant individuals spell nothing but misery for those who borrow money from them,” team head Tony Quigley said.

Based on data from 2018 and 2019, the organisation said it took an average of 2.75 years for someone targeted by predatory lenders to engage with the authorities, suggesting any spike in loan shark activity now might not be visible until 2023.

Analysts say it is no surprise subprime lenders are acting cautiously. Even in benign market conditions, companies serving subprime customers typically absorb higher defaults than banks who focus on higher-quality borrowers.

In 2019, 13.6% of the loans made by Provident’s subprime credit card business Vanquis turned bad, while the so-called impairment rate for its doorstep lending was 39%.

But for loans made by Royal Bank of Scotland, for example, which tends to lend to people with better credit ratings and focuses on mortgages, the rate was just 0.21%.

With little consensus on the outlook for the British economy, few mainstream lenders say they are prepared to help borrowers who didn’t measure up before the pandemic.

David Duffy, chief executive of Virgin Money, said the bank was prioritising existing clients and had not considered altering its lending criteria to offer credit to subprime borrowers.

A spokesman for the banking trade body UK Finance, said: “Lenders work hard to ensure the balance is right between helping customers to budget effectively and meet their payment needs while lending responsibly and ensuring longer-term affordability.”

Others were more blunt about a subprime shutout.

“It’s almost certain people won’t be able to get credit,” one senior banking executive said. “Clearly if you are in that category, then you are in a much more difficult scenario.”

By Sinead Cruise, Iain Withers

Rolls-Royce to cut 9,000 jobs amid virus crisis

( via – – Wed, 20th May 2020) London, Uk – –

Rolls-Royce has said it will cut 9,000 jobs and warned it will take “several years” for the airline industry to recover from the coronavirus pandemic.

The Derby-based firm, which makes plane engines, said the reduction of nearly a fifth of its workforce would mainly affect its civil aerospace division.

“This is not a crisis of our making. But it is the crisis that we face and must deal with,” boss Warren East said.

The bulk of the job cuts are expected to be in the UK at its site in Derby.

Rolls-Royce employs 52,000 people globally and Mr East told the BBC's Today programme that the company had not yet concluded on “exactly” where the job losses would be, due to having to consult with unions.

But he said: “It's fair to say that of our civil aerospace business approximately two-thirds of the total employees are in the UK at the moment and that's probably a good first proxy.”

Rolls-Royce's civil aerospace business has a number of sites in the UK, but the largest plant is in Derby.

The company said it will also carry out a review of its sites but declined to comment on which ones may close.

John, a worker in Rolls-Royce's civil aerospace division who spoke to the BBC on condition of anonymity, said that while he expected there would be job cuts, the eventual 9,000 figure was “a shock”.

“Since the Covid-19 outbreak we knew that business would shrink,” he said.

But he said the scale of the cuts as well as the potential closure of some sites was a surprise.

Unite the union said the decision was “shameful opportunism”.

“This company has accepted public money to furlough thousands of workers,” said Unite's assistant general secretary for manufacturing, Steve Turner.

“Unite and Britain's taxpayers deserve a more responsible approach to a national emergency. We call upon Rolls-Royce to step back from the brink and work with us on a better way through this crisis.”

Rolls-Royce initially furloughed 4,000 workers in the UK last month. Some 3,700 people remain on the Coronavirus Job Retention Scheme though which the government pays 80% of a worker's wage up to £2,500 a month.

But Mr East said: “No government can extend things like furlough schemes for years into the future. We have to look after ourselves and make sure we meet medium term demand.”

Analysis: Domonic O'Connell

Job cuts a heavy blow

This morning's job losses are hardly unexpected – airlines have cut their flying hours by 90% or more, and Airbus and Boeing have slashed their production numbers for the next few years – but they are still a heavy blow to one of the UK's few world-class manufacturing companies.

While the details of where the cuts will fall have not been finalised, it is likely that two-thirds will go in the UK.

The company has already used the government's furlough scheme to help pay the wages of about 4,000 staff, but Warren East, Rolls-Royce's chief executive, said companies could not expect the government to continue such a scheme for several years.

There was also a clear hint this morning that some factories may close – the company said it would review its future manufacturing footprint.

Some questions remain for Roll-Royce. Investors are scratching their head about when the company's revenues – much of which rely on aircraft to be flying for money to flow – will return.

The company has not yet tapped its shareholders for more money – some expect that may eventually come.

Air travel has ground to a virtual standstill since the coronavirus began spreading across the world and many airlines have announced steep job cuts.

Global air traffic is expected to decline by 45% this year, according to investment bank Baird. It also forecasts that airlines are expected to lose $310bn (£253bn) in revenue in 2020.

Rolls-Royce said the impact of the pandemic on the company and the whole of the aviation industry “is unprecedented”.

It added that it is “increasingly clear that activity in the commercial aerospace market will take several years to return to the levels seen just a few months ago”.

As well as the job losses, the company said it would cut costs in areas such as its plants and properties. It expects to make cost savings of £1.3bn.

Paul Everitt, chief executive of ADS, the aerospace industry association, said: “The crisis is having a major impact on aerospace companies who provide high value, long-term jobs in all regions and nations of the UK, putting thousands more jobs at risk now and in the months ahead.”

Farms still need up to 40,000 British residents to harvest fruit and vegetables

( via – – Wed, 20th May 2020) London, Uk – –

Farmers fear British workers will leave crop-picking jobs when lockdown eases

Farmers are facing an uncertain summer and autumn as industry representatives said they still needed to recruit – and retain – as many as 40,000 British residents to harvest fruit and vegetables.

With the peak picking season just a few weeks away, thousands of British workers are needed to replace the foreign workers who usually travel to the UK to pick crops. There are deep concerns that even if enough workers initially come forward, many will quit as the lockdown eases and they are able to return to their usual employment.

The centrepiece of the recruitment campaign is the government and industry portal Pick for Britain. The site crashed on Tuesday just as the government was urging people to join a “land army”. ITV and Waitrose announced a campaign to support the drive, which will include adverts and a film following new recruits.

Ali Capper, who runs an apple and hops farm in Worcestershire and chairs the British Apples and Pears trade body, said she did not like the land army image.

“I find the rhetoric of the land army unhelpful,” she said. “That’s looking back how things were through rose-tinted spectacles. Our businesses aren’t like that any more. The rhetoric may bring forward large numbers of people but some only want to do the odd day here and there or don’t want to do the hours that are required. That’s very difficult for business. What we want is people who will sign up and commit.”

About 70,000 workers are needed to bring in the British harvest over the spring, summer and autumn.

Tom Bradshaw, vice-president of the National Farmers’ Union, said the level of interest in Pick for Britain had been “overwhelming”. But he added: “The difficulty has been in turning that into pickers that stick – people that are going to turn up day in, day out.”

He said the Pick for Britain site had had well over 100,000 hits from unique users and the latest estimate from April was that 25% to 30% of pickers on farms were British. The figure is usually below 1%.

But Bradshaw added: “We have got 20,000 to 40,000 more workers to find and those are going to be difficult.” He said that farms were still expecting eastern European workers to come to the UK but quarantine rules were creating uncertainty. If the government’s plan to impose two weeks of isolation on new arrivals by air is applied to seasonal workers it could create a “huge shortage”.Advertisement

Jack Ward, CEO of the British Growers Association, said: “We’re OK or OK-ish.” But added that farmers were worried not all workers who have said they will start in June will do so.

“And there’s a nervousness about the rest of the season,” he said. “As we progressively come out of lockdown, some people working on farms will return to their original roles. A lot of growers are sensing they are going to be continually topping up the workforce, recruiting and retraining as the season goes on.”

When the Growers Association carried out a survey of salad and brassica farmers, only about a third said they had all or almost all the workers they needed.

Sarah Boparan, operations director of Hops, one of the UK’s biggest agencies for hiring farm labour, said it had thousands of British applicants for jobs but only about 20% completed interviews. She said the agency and farms have had to change the way they work to be more flexible – offering two-week stints rather than the usual two to six month contracts – to suit British workers.

Doug Robertson, managing director at Florette UK, a leading salad brand, called for more guidance from the government. He said: “Currently we have planted up to the middle of June, with plants being raised which will take us to the end of August but there is huge uncertainty around how much we will actually need to harvest.”

Nick Marston, chairman of the industry body British Summer Fruits, said there were thousands of British people now working on farms. But he warned there could be problems later in the year if they returned to their old jobs.

The Department for Environment, Food and Rural Affairs said the majority of roles for the early part of the harvest season have been filled. A spokesperson said: “The demand for seasonal workers is expected to increase in the coming weeks and months. This is why we are working hard now to ensure our farmers and growers have the support they need ahead of this time.”

By Steven Morris and Sarah Butler

Rishi Sunak warns UK facing recession ‘the likes of which we haven’t seen’ due to Covid-19 crisis

( via – – Tue, 19th May 2020) London, Uk – –

Rishi Sunak warns UK facing recession ‘the likes of which we haven’t seen’ due to Covid-19 crisis

The chancellor, Rishi Sunak, has warned that Britain is facing a “severe recession, the likes of which we haven’t seen” and lasting economic damage from the coronavirus pandemic.

In a downbeat assessment of the country’s economic prospects after a sharp rise in unemployment benefit claims, the chancellor warned a Lords committee it was “not obvious there will be an immediate bounceback” from recession.

The government’s lockdown controls to limit the spread of the virus brought the economy to an effective standstill, with Sunak saying: “I certainly won’t be able to protect every job and every business, we’re already seeing that in the data, and no doubt there will be more hardship to come.”

The government had been hoping for a V-shaped recovery from the pandemic, but the chancellor said the “jury is out” on the “degree of long-term scarring” on the UK economy. He suggested that the outcome was uncertain because economists were “dealing with something unprecedented so economic forecasting is not as precise as it might normally be”.

Sunak had suggested as recently as last month that Britain could “bounce back” quickly thanks to the government’s support measures and the nation’s “fundamentally sound” economy prior to the crisis.

Speaking at the daily Downing Street press conference in mid-April, he said “we can recover quickly and strongly and get our lives back to normal”.

Referring to relatively weak levels of growth in Europe as lockdown measures were gradually lifted elsewhere, he added: “In all cases it will take a little bit of time for things to get back to normal, even once we’ve reopened currently closed sectors.”

Official figures earlier on Tuesday showed 856,500 people signed up for universal credit and jobseeker’s allowance benefits in April, driving up the overall claimant count by 69% in a single month. Economists said the figures would have been far higher without the Treasury’s furlough wage subsidy scheme.

The emergency financial support unleashed by the Treasury, with a rapidly rising price tag worth tens of billions of pounds every month, is designed to minimise the lasting damage to the economy by helping companies to stay afloat and by keeping people in their jobs.

However, Sunak warned that the depth of the Covid-19 recession and the length of time it could take for business activity to return to normal could hit the country’s productive capacity.

“The longer the depth of the recession, I think everyone would agree – all economic forecasters and economists would agree – it is likely the degree of that scarring will be greater,” he said.Advertisement

About 8m jobs have been protectedthrough the government’s furlough scheme. But with the gradual reopening of the economy as lockdown controls are lifted over the coming months, the chancellor is preparing to scale back the support from the current level of 80% of workers’ wages and pass some of the £14bn-a-month cost of the scheme to employers.

Sunak suggested he would reject requests for the 80% subsidy to be retained longer for sectors due to reopen last – including leisure and hospitality firms such as pubs, theatres and restaurants.

He told the Lords committee: “I thought about a sectoral approach and in practice it would be very difficult to implement.

“There’s an entire supply chain of those companies, which are in practice very hard to start to differentiate between those businesses.”

By Richard Partington, Economics correspondent

Energy firm OVO/SSE to cut 2,600 jobs in digital drive

A union accuses the company of reneging on a promise not to cut jobs as it continues the integration of the SSE brand.

OVO Energy, which bought the household supply business of SSE for £500m just months ago, has announced plans to slash 2,600 jobs.

The company said its integration plans, including a drive for digital and investment in a zero carbon future, had been accelerated by the COVID-19 pandemic.

OVO said it had initially expected the moulding of the two companies to have taken a number of years but it hoped to achieve the cuts through volunteers though it could not rule out compulsory redundancies.

The GMB union accused the company of cutting its way to profitability as the industry suffers the effects of the government's default tariff price cap and falling wholesale energy costs.

Research by price comparison site Uswitch suggested home energy deals had fallen to their lowest since the summer of 2018.

OVO said of the roles affected by its cuts: “As part of the integration, the company will remove complexities and duplication by combining SSE Energy Services and OVO's home services, lettings business, metering, commercial efforts and support functions.

“It will continue to digitise legacy SSE processes and move the business onto a common set of systems to meet the demands of an increasingly digital consumer and a more agile workforce.

“To accommodate these changes, and as part of a move towards more flexible working the Selkirk, Reading and Glasgow Waterloo Street office locations will be closed.

“The employees in these sites will be able to either work from home or at an alternative office.”

The union Unison said plans to offshore a further 700 jobs to South Africa were abandoned by the company.

Stephen Fitzpatrick, OVO's chief executive, said: “Today is a very difficult day. We have a brilliant team here and this news isn't a reflection of anyone's work.

“What should have been a much longer process to digitise the SSE business and integrate it with OVO has been accelerated due to the impact of the coronavirus.

“We are seeing a rapid increase in customers using digital channels to engage with us, and in our experience, once customers start to engage differently they do not go back.

“As a result, we are expecting a permanent reduction in demand for some roles, whilst other field-based roles are also heavily affected.”

The GMB union accused the company of betraying its workforce.

National secretary Justin Bowden said: “Coronavirus outbreak or not, this is a massive betrayal of promises made to workers and politicians that the sale to OVO would not result in job losses.

“The COVID crisis and the SVT cap have affected the whole energy retail market but you cannot just cut your way out of a crisis in search of profit.”

By James Sillars

Bank of England, revives negative interest rates talks amid COVID-19 crisis

( via — Mon, 18th May 2020) London, UK —

LONDON (Reuters) – A chorus of comments from top officials at the Bank of England about negative interest rates has revived talk that the British central bank might resort to cutting borrowing costs below zero to cushion the economy from the coronavirus shutdown.

The BoE has cut rates twice as the COVID-19 crisis escalated in March to a record low of 0.1%.

Most economists say its next move will be to add to the firepower of its 645 billion-pound bond-buying programme as soon as June 18, at the end of its next scheduled meeting.

But investors on Monday began to price in the possibility of the BoE overcoming its long-standing reluctance to take rates below zero from the end of 2020 as it contemplates what could be the biggest economic slump in three centuries.

The shift in markets came after the BoE’s chief economist, Andy Haldane, said the central bank was looking more urgently at negative interest rates as well as at buying riskier assets.

“The economy is weaker than a year ago and we are now at the effective lower bound, so in that sense it’s something we’ll need to look at – are looking at – with somewhat greater immediacy,” Haldane told the Daily Telegraph newspaper in an interview published late on Saturday. “How could we not be?”

The comments from Haldane, who is typically one of the BoE’s most outspoken policy-makers, struck a more urgent note than the message from Governor Andrew Bailey.

Last week, Bailey said taking rates below zero “is not something we are currently planning for or contemplating,” but he added it was not wise to rule anything out.

Alan Monks, an economist with JP Morgan, said the comments, along with Deputy Governor Ben Broadbent’s saying on May 12 the BoE needed to keep on weighing up the pros and cons of negative rates, suggested the central bank was reviewing its stance.

“Despite the mixed messaging, it appears the MPC (Monetary Policy Committee) believes this is a debate which is at least worth revisiting,” Monks said in an email to clients.

The departure in March of former governor Mark Carney, who was particularly resistant to going negative, might have created space for fresh discussions, he said.

While the European Central and the Bank of Japan have cut their benchmark rates below zero in a bid to get banks to turn their cash into loans and boost economic growth, the BoE has said it believes such a move would be counterproductive, because it would hurt banks and make them less likely to lend.

But investors have not missed the apparent willingness to contemplate the question anew.

Rob Wood, an economist with BofA Global Research, said the brevity of the recent comments allowed for misunderstandings, but the BoE seemed to be signalling that 0.1% was no longer the floor for rates, and a cut to zero was possible in August.

“We think a policy rate of 0% is easier for the BoE to contemplate and they will need to exhaust other options, which will take time, before taking rates negative,” Wood said.

Going below zero would further weaken sterling, which is already touching two-month lows against the dollar and the euro because of the prospect of failure in London’s post-Brexit trade talks with Brussels.

But saying never to sub-zero borrowing costs no longer made sense, Wood said.

“We see the probability of negative rates higher for 2021 than 2020,” he said. “We can’t rule it out anymore.”

By William Schomberg

Some major UK train stations to put crowd-control measures in place

( via – – Mon, 18th May 2020) London, Uk – –

Security guards trained in crowd control have been put on duty at some major railway stations following the easing of coronavirus restrictions.

Train firms operated reduced services during lockdown, but more frequent trains are now running in England.

People are being encouraged to go back to work in England, but only to use public transport for essential journeys when they have no alternative.

Some industry figures expressed concern over increased passenger numbers.

Network Rail said passenger numbers on Monday were “very similar” to last week, when the figure was slightly up on the previous week. However, footfall through major UK stations was only about 10% of pre-pandemic levels.

New crowd-control measures include preventing passengers from boarding a train or entering a platform if there are already too many people.

And more radical steps are being considered, such as passengers being required to book time slots for when they can arrive at a station.

Train operators are already planning to limit numbers boarding specific services.

Many intercity trains will be reservation only and Avanti West Coast has said it would not allow carriages to be more than a third full.

Some train companies will block off seats to ensure that passengers spread out. It is also possible that if a service becomes busy early on, then trains will not stop at other destinations along their routes.

In future, train operators might not open the doors of certain carriages at earlier stations along a route so that people can get on at a later stop and still have the necessary space to keep their distance.

Network Rail chairman Sir Peter Hendy said an “enormous” effort had been made to manage the flow of passengers.

Stations have been reorganised, signs have been installed and space could be made outside for queuing in case entrances and exits are closed.

“We are relying on people to be sensible,” he told BBC Breakfast – adding that the rail industry was “keen” for people to wear face coverings while on public transport.

“We want people to stay apart if they humanly can and if they can't, then a face covering is a quite sensible thing to do for the brief moments when you might be getting on or off a train or moving through a station,” he said.

However, senior figures from the rail industry insist they will not be policing whether people are following government guidelines.

PC Jason Kelly said the number of passengers on his train from King's Cross to north Hertfordshire had risen from two to up to 40 after lockdown measures were eased last week.

The officer, who was returning home after a night shift, was not confident that social distancing measures could be met if passenger numbers rise further.

“For some people it's just like a normal day, people have got fed up with [coronavirus], they've had enough,” he said.

What is the situation around the UK?

People in England who are allowed to return to work have been asked not to use public transport if possible.

People in Wales have been told to avoid public transport where possible, and a reduced timetable will remain in place on Transport for Wales rail services.

Limited public transport services are running in Scotland for people who absolutely need to get to work and the situation is similar in Northern Ireland.

Transport for London (TfL) said it was introducing one-way systems, safety signs and announcements, and hand sanitiser dispensers to help people to keep to social distancing measures in the capital.

TfL says it will regularly update guidance on the 20 busiest stations to help people to avoid those areas.

The capital's public transport network has spoken to about 300 businesses and Transport Secretary Grant Shapps has indicated that office start times would be staggered to manage demand on public transport.

Meanwhile London's congestion charge, which was suspended in March, has been reintroduced.

Analysis: Tom Burridge

Staff often outnumber passengers here at Euston station.

British Transport Police officers and security guards are on duty, in case there are crowds.

Every so often dozens of people stream off a platform when a train arrives into London. However it's still incredibly quiet.

Yellow gates, which are folded-away, are dotted around. They could be used to close entrance points to the station or specific platforms if there are too many people.

There is hand sanitiser on offer in the centre of the concourse.

It's weird for station managers to be pleased that there aren't many passengers – but that's the situation here this morning.

During the crisis the government is covering the losses made by train companies, which saw revenues evaporate when travel restrictions began.

But industry forecasting predicts that significant passenger numbers will return several weeks from now.

BBC transport correspondent Tom Burridge said train companies have said they are nervous about how the situation can be managed, once crowds return, with one source saying: “We are counting on the individual conduct of passengers.”

Another source said the industry had “done everything we can to suppress demand”.

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Royal Mail chief Rico Back steps down with immediate effect

( via – – Fri, 15th May 2020) London, Uk – –

Rico Back steps down after less than two years at helm of struggling postal business

The Royal Mail chief executive, Rico Back, has stepped down with immediate effect in a surprise departure after less than two years in the job.

The 66-year old, who has been with the company for three decades, endured a battle with unions over restructuring plans for the ailing business.

He will be replaced in the interim by the company’s chairman, Keith Williams, a former chief executive of British Airways.

Back’s exit came as Royal Mail reported a £22m decline in UK revenues in April. The decrease follows a dramatic drop in the volume of letters being sent during the coronavirus lockdown. Letter volumes fell by a third last month, to 308m.

Back said: “It has been a privilege to lead a company that is so much a part of UK life at this crucial time in its history. I am proud of what I, together with our dedicated and loyal team, helped to build.Advertisement

“I look forward to seeing Royal Mail transform into a parcels-led international delivery company that continues to touch the lives of millions across the world.”

Under the terms of his departure, Back is on garden leave until 15 August and is to receive his salary and benefits during that period. He will then receive nine monthly payments totalling £480,000 in lieu of working his notice period, but will not receive a cash bonus or share awards for 2019-20 or 2020-21.

Royal Mail, which gave no explanation for Back’s departure, has agreed to pay £50,000 towards the legal fees he has incurred relating to his departure, and £25,000 towards “outplacement support”.

Back was often at loggerheads with unions over a range of issues during his tenure, most recently over accusations that the company were not providing employees with sufficient personal protective equipment during the coronavirus pandemic.

The Communication Workers Union , which represents thousands of postal workers, told members last month that they should stay away from work if their sorting office had not provided equipment such as masks, gloves and hand sanitiser. The CWU estimated that up to half of sorting offices did not have sufficient protection in place.

Royal Mail said on Friday it had committed just under £40m to purchasing PPE for employees. The company said staff absence had fallen from a peak of 20% to 11%.

Back was also criticised when it emerged he was running Royal Mail remotely from his home overlooking Lake Zurich during lockdown.

Royal Mail, which employs 143,000 staff in the UK, said it had set aside £25m for cash bonuses to be given to frontline staff who continued to work during the coronavirus crisis. Staff will each receive an award of up to £200 in June. No bonuses will be paid to Royal Mail’s executive directors this year.

Relations between Back and unions deteriorated over a £1.8bn transformation plan to move the business away from the declining letters market towards parcel delivery, which is booming because of online shopping. However, unions have threatened strike action over issues including job security, pensions and employment conditions.

Under Back’s leadership Royal Mail’s shares fell to their lowest point since the business was privatised in 2013. At the same time Back has been criticised for taking home an “astronomical” pay packet, which included a £6m “golden hello” when he moved from the company’s European subsidiary to become chief executive.

Despite a sharp fall in letter volumes, the volume of parcels delivered has risen 31% in April, as UK consumers buy more online because of lockdown measures.

Costs at the UK operation are up £40m in the period from 30 March to 3 May, driven, said Royal Mail, by “overtime and agency resource costs” because of high levels of staff absence, and the introduction of physical distancing measures and PPE.

A spokesman for the CWU said the appointment of a new chief executive provided a chance for Royal Mail to mend relations with staff.

“The change of chief executive by Royal Mail Group must now bring about a total change in strategy and direction,” the union said. “Postal workers have been outstanding during this pandemic and are ready to embrace innovation, new products and building on their role in every community in the UK.

“It is absolutely critical that the new chief executive wants to work with the CWU to overcome the challenges we all face and deliver the postal service the public and our members deserve.”

By Mark Sweney

East Coast train operator LNER introduces mandatory ticket reservations

( via – – Fri, 15th May 2020) London, Uk – –

East Coast train operator LNER is to introduce mandatory seat reservations on all train services from Monday.

The measures, to help stop the spread of coronavirus, would mean passengers with flexible tickets would have to pick a train to travel on, in advance.

The company operates services between London and Leeds, and Edinburgh, York, Newcastle and London,

Separately, Avanti West Coast is urging customers to reserve tickets, but has not made it compulsory.

Avanti, which runs services linking London, Glasgow, Manchester and Birmingham, is also encouraging people to wear face coverings when they travel.

Passengers might be refused travel if the guidelines are not followed.

Chiltern Railways is also advising its passengers to book tickets in advance where possible and to wear masks.

LNER confirmed its shift to mandatory bookings in a tweet.

This contained “tips” for passengers, travelling on its trains, including:

  • Wear a facemask if you cannot keep your distance
  • Ignore the seat number on your ticket and choose your own seat
  • Keep 2 metres apart where possible
  • One person to a row unless travelling as a household
  • In standard class leave two empty rows and one in first class
  • Avoid facing other passengers

The company concluded by asking: “Can you travel another way? Help us keep the trains clear for those who really need them.

Avanti's new measures also take effect on Monday and the company said it may not allow carriages to be more than a quarter full.

“We're appealing to our valued customers to help us and other passengers by only travelling with a reservation,” said Avanti West Coast's managing director Phil Whittingham.

“If everyone does this, we'll be able to keep social distancing in place on board, both for our customers and our people.

“If customers do turn up without a reservation, we'll do our best to help but we can't guarantee they'll be able to take the train they want.”

The train operator is asking passengers to book in advance on the Avanti mobile app where possible, and to avoid using facilities at the station or handling cash.

People should also check before they travel, in case the time of their train has changed.

Other measures being introduced by Avanti include face masks for staff, while waiting rooms and lounges will be shut.

There will also be enhanced cleaning procedures on board trains and at stations, focusing especially on cleaning door buttons, grab handles, tables and all touch points, as well as equipment such as phones, chip and pin machines, self-service ticket machines and point of sale systems.

Shops on board Voyager services, which travel between London and destinations such as Blackpool, Shrewsbury, Birmingham, Edinburgh and North Wales, will be closed and no food and drink will be available.

The shops on Pendolino services will still be open, but re-usable coffee cups will not be accepted.

Increased train services

Avanti said a new timetable was being brought in from Monday, in line with updated travel advice from the government that will see train services increase to about 70% of the normal timetable.

During the coronavirus pandemic only half of normal rail services have been running.

Chiltern Railways also revealed a new timetable, which comes into force on 18 May, and has advised its passengers to book tickets in advance where possible and to wear masks.

The company – whose trains from London Marylebone travel on routes to Aylesbury, Oxford, Stratford-upon-Avon and Kidderminster – also told travellers to avoid rush hour and allow more time for their journey.

Meanwhile, bus operator National Express says it has begun selling coach tickets for a restart to services on 1 July, subject to government advice.

The easing of travel restrictions is likely to be done gradually – the government has suggested that working hours might be staggered to limit passenger numbers.

People in England who are allowed to return to work have been asked not to use public transport if possible.

If maintained, the two-metre social distancing measure would cut capacity on trains by up to 90%.

A recent Transport Focus survey suggested more than 60% of UK passengers would not feel comfortable using public transport unless social distancing was in place.

It found 51% would not be happy unless passengers were required to wear masks.

BT in talks to sell multi-billion pound stake in Openreach

( via — Thur, 14th May 2020) London, UK —

LONDON (Reuters) – BT Group Plc (BT.L) is in talks to sell a multi-billion pound stake in its wholly owned network subsidiary Openreach to infrastructure investors to help fund an ambitious expansion in fibre broadband, the Financial Times reported on Thursday.

The FT said potential investors, including Australian investment firm Macquarie Group Ltd (MQG.AX) and a sovereign wealth fund, had held talks in the last three weeks with the former telecoms monopoly.

Macquarie, however, was not interested in a deal, a source close to the investment firm told Reuters.

BT declined to comment on the FT report.

Upgrading Britain’s broadband network is the centerpiece of Chief Executive Philip Jansen’s strategy for BT, but rolling out the fibre connections to 20 million premises by the mid to late 2020s will cost 12 billion pounds.

Shares in BT fell to 11-year lows, giving it a market capitalisation of 10 billion pounds, after the company cancelled its divided a week ago to help weather the economic impact of the coronavirus.

Jansen said the pandemic, which has seen a surge in the use of mobile phones and data, had made the network upgrade “a matter of extreme urgency”.

Cancelling the dividend until 2021/22 and only then reinstating it halve the previous level will save BT 3.3 billion pounds, analysts noted.

The company has multiple call on the cash, including its 5G mobile network, pension deficit and expensive sports rights that underpin its consumer broadband offer.

It will also face more competition across mobile, fixed-line and TV after cable TV company Virgin Media and mobile operator O2 agreed to merge a week ago.

Jansen, however, said last week he was focused on upgrading Britain’s broadband infrastructure, and he confident the regulator Ofcom and the government would create the right conditions for investment.

“Clearly in this environment the political and regulatory will to encourage investment is very, very high,” he said.

On Wednesday he demonstrated his confidence in BT’s prospects by spending 2 million pounds buying the company’s shares, according to a stock market filing on Thursday.

A person associated with the company’s chairman and a non-executive director also purchased stock, the filing said.

Reporting Paul Sandle and Pamela Barbaglia in London

Lloyd’s of London set to pay out up to £3.5bn over pandemic

( via– Thur, 14th May 2020) London, Uk – –

The insurance market expects that the cost of the crisis will ultimately be “far in excess” of other disasters such as 9/11.

Lloyd's of London is set to pay out up to £3.5bn to customers as a result of the coronavirus pandemic.

The insurance market said it was on a par with the impact of 9/11 but that it expects the eventual overall cost of COVID-19 to the industry to be “far in excess” of that and other catastrophes.

Lloyd's estimates that overall, when taking into account falling investment values as well as the cost of paying claims, the global insurance industry stands to lose £164bn this year.

Chief executive John Neal said: “The global insurance industry is paying out on a very wide range of policies to support businesses and people affected by COVID-19.

“The Lloyd's market alone is currently expected to pay claims amounting to some $4.3bn (£3.5bn), making it one of the market's largest pay-outs ever.

“What makes COVID-19 unique is the not just the devastating continuing human and social impact, but also the economic shock.

“Taking all those factors together will challenge the industry as never before, but we will keep focused on supporting our customers and continuing to pay claims over the weeks and months ahead.”

Lloyd's said its preliminary pay-out estimate was in the range of £2.4bn-£3.5bn based on the assumption of “material social distancing rules and restrictions” lasting until the end of June, and that this could rise further if the current lockdown continues into another quarter.

It said 15% of the pay-outs covered the UK with the remainder covering the rest of the world.

Nearly a third of the claims (31%) were for cancellations of major events such as the Olympics with others covering areas such as property insurance and trade credit.

The level of total pay-outs expected by Lloyd's compares to a $4.8bn (£3.9bn) total following hurricanes Harvey, Irma and Maria in 2017 and $4.7bn (£3.8bn) resulting from the terror attacks of 11 September 2001.

“Lloyd's believes that once the scale and complexity of the social and economic impact of COVID-19 is fully understood, the overall cost to the global insurance non-life industry is likely to be far in excess of those historical events,” it said.

For the insurance market as a whole, Lloyd's estimates losses on claims totalling £86bn, plus an additional £77bn hit as the value of investments collapses.

In the UK, small businesses are challenging insurers who they say have denied them payments for disruption.

The insurers say most small business policies do not cover the pandemic.

Among those under scrutiny is Lloyd's of London insurer Hiscox.

Mr Neal said the UK domestic property sector accounted for less than 2% of the Lloyd's market, adding that “any valid claims should be paid”.

By John-Paul Ford Rojas

Chancellor Rishi Sunak warns of ‘significant recession’

( via – – Wed, 13th May 2020) London, Uk – –

The chancellor has said it is “very likely” the UK is in a “significant recession”, as figures show the economy contracting at the fastest pace since the financial crisis.

The economy shrank by 2% in the first three months of 2020, as coronavirus forced the country into lockdown.

Rishi Sunak told the BBC that just “a few days of impact from the virus” in March pushed the economy into decline.

Economists expect an even bigger slump in the current quarter.

Mr Sunak said: “It is now very likely that the UK economy will face a significant recession this year, and we're already in the middle of that as we speak.”

The first quarter drop was driven by a record fall in March output, and comes after the economy stagnated in the final quarter of 2019.

Ruth Gregory, senior UK economist at Capital Economics, said the figures showed the UK economy was “already in freefall within two weeks of the lockdown going into effect”.

She added: “With the restrictions in place until mid-May and then only lifted very slightly, April will be far worse.”

While analysts expected a larger quarterly decline of 2.6% in the first three months of the year, it still represents the biggest contraction since the end of 2008, when Lehman Brothers collapsed.

The Office for National Statistics (ONS) said there had been “widespread” declines across the services, manufacturing and construction sectors.

This includes a record 1.9% fall in services output, which includes retailers, travel agents and hotels.

Household spending shrank at the fastest pace in more than 11 years as restaurants and high street shops remained shut.

The ONS said a rise in spending on food, alcohol and new TVs only partially offset the decline.

Opening up

The figures come as some of the lockdown restrictions are starting to be eased. Some employees in England who cannot work from home are now being encouraged to return to their workplaces.

Sectors “allowed to be open, should be open”, the government says. These include food production, construction and manufacturing.

In other developments, estate agents in England can now reopen, viewings can take place and removal firms and conveyancers can re-start operations, so long as social-distancing and workplace safety rules are followed.

On Tuesday, Mr Sunak announced an extension of the furlough scheme subsidising wages to the end of October.

Mr Sunak said Wednesday's GDP data underlined why the government had taken “unprecedented action” to support jobs, incomes and livelihoods” at a time of severe disruption.

France and Italy saw much bigger contractions of 5.8% and 4.7% respectively in the first quarter, where lockdowns were imposed up to two weeks earlier.

However, analysts expect a double-digit drop in UK gross domestic product (GDP) in the coming quarter.

The Bank of England has warned that the UK economy is likely to suffer its sharpest recession on record this year, even if the lockdown is completely lifted by the end of September.

While the Bank said the economy could shrink by 14% in 2020, it expects the downturn to be short and sharp, with growth of 15% predicted in 2021.

The decline is also expected to be less prolonged than during the financial crisis, when the economy kept shrinking for more than a year.

The economy also took five years to get back to the size it was before the meltdown.

The Bank of England expects the UK to rebound more quickly this time, returning to its pre-crisis size within two years.

Analysis: By Faisal Islam

The chancellor has acknowledged to me it was “very likely” the UK is already in the middle of a significant recession.

On the reality that the UK has been in recession for four months he said: “Well, as you know, recession is defined technically as two quarters of decline in GDP. We've seen one here with only a few days of impact from the virus, so it is now, yes, very likely that the UK economy will face a significant recession this year, and we're already in the middle of that as we speak.”

Asked about the leak to the Telegraph of an internal Treasury options paper which contained dire numbers for the UK deficit, and a view that a rapid “V-shaped” recovery was “optimistic”, the chancellor said that it was “too early to speculate”

However, he added: “What we do know is in order to make sure that recovery as swift and as strong as we will like it to be, we need to take action now to protect people's jobs and support businesses through this time.”

The reason why the number for the first three months matters is that it shows how devastating even a week or two of shutdown can be.

It means that April's month-long closure of large swathes of the economy is likely to have hit GDP by 20-25%. This first quarter fall is bad enough and is one of the worst five economic quarters since modern records began in 1955. But the current quarter will see a hit at least 10 times worse, and off any imaginable scale in living memory.

The much hoped for sharp bounce back – for example as contained in the Bank of England scenario last week, and the precise reason why so much rescue funding has flowed – is looking far from certain.

Europe’s largest travel group Tui warns of 8,000 job losses as travel firm faces ‘greatest crisis’

( via – – Wed, 13th May, 2020) London, Uk – –

Coronavirus forces Europe’s largest travel group to permanently cut costs by 30%

Tui plans to cut up to 8,000 jobs in response to the coronavirus chaos engulfing the tourism industry.

Europe’s largest travel group said it needed to reduce costs permanently to tackle “unquestionably the greatest crisis the industry and Tui has ever faced”.

It lost €740m (£650m) in the first three months of the year, requiring a rapid German state bailout as the company bled cash and cancelled most of its holidays until June.

Travel restrictions in most of its main markets have destroyed demand for holidays, with nine in 10 Tui employees furloughed or given pay cuts in a desperate attempt to lower costs. Tui had more than 70,000 employees in September.

The German government backed a €1.8bn loan in March to help the company survive, but Tui said the travel industry would change permanently after the pandemic, requiring significant cuts.

Tui told the stock market on Wednesday: “We are targeting to permanently reduce our overhead cost base by 30% across the entire group. This will have an impact on potentially 8,000 roles globally that will either not be recruited or reduced.”

The pandemic has forced the travel industry to shrink significantly, despite job retention schemes. Tui’s job cuts come after British Airways revealed plans to axe 12,000 roles, and Ryanair and Virgin Atlantic said they would cut 3,000 jobs apiece.

Tui was reviewing its business to identify areas to cut and could pull out of entire markets or destinations. Cuts to its airline were highly probable and it would “divest and address” unprofitable businesses.

Tui said it was ready to restart holiday travel, but it also warned of the difficulties faced by travel companies trying to operate with the prospect of a vaccine still far off.

The company said it was preparing to implement physical distancing measures at airports and on aircrafts. It would also call for mandatory masks and stop buffets and team sports in its hotels and cruise ships “without compromising customer enjoyment and travel experience”.

However, customers were still making inquiries online, indicating a continued demand for travel despite the pandemic and economic crisis, Tui said. “Customers want to travel as soon as tourism can take off responsibly and safely,” it said.

By Jasper Jolly

UK coronavirus lifeline extended for workers for four more months

( via — Tue, 12th May 2020) London, UK —

LONDON (Reuters) – Britain extended its job retention scheme — the centrepiece of its attempts to mitigate the coronavirus hit to the economy — by four months on Tuesday but told employers they would have to help meet its huge cost from August.

Finance minister Rishi Sunak said 7.5 million temporarily laid off employees — almost one in every four British workers — were now on the scheme.

He said they could rest assured that they would continue to get 80% of their wages — up to 2,500 pounds ($3,089) a month — until the end of October.

But Sunak said the scheme was expensive and could not continue indefinitely.

“We have stretched and strained to be as generous as possible to businesses and workers,” he told parliament.

“This scheme is expensive. It is the right thing to do — the cost of not acting would have been far higher — but it is not something that can continue indefinitely into the future.”

The scheme is designed to stop a rise in unemployment from turning into the kind of leap seen in the United States.

But at about 10 billion pounds a month, its cost is close to the amount Britain spends on public health services.

Sunak said that from August, employers currently using the scheme would be allowed to bring furloughed employees back part-time, something business groups had been calling for.

He also told companies they would have to start sharing the cost of the scheme from August.

The United Kingdom is racking up new debt at a furious pace: it is due to issue 180 billion pounds of government debt between May and July, more than previously planned for the entire financial year.

The country’s debt mountain exceeds $2.5 trillion and its public sector net borrowing could reach 14% of gross domestic product this year, the biggest single-year deficit since World War Two.

An employers’ group said the inclusion of part-time working in the furlough scheme would help companies get back up to speed but said it needed more information on how businesses would be asked to make contributions.

“Many firms that would normally be on a strong footing are still in dire straits,” said Edwin Morgan, director of policy at the Institute of Directors.Slideshow (3 Images)

Sunak said he would provide further details by the end of May.

An economic think-tank said there was a risk that extending the furlough scheme, preventing companies from starting to reorganise their staff and adjust their business models, risked a rise in joblessness once it expires.

“It would have been better to spell out much more clearly what the government intends now, rather than delaying the detail of what Mr Sunak proposes,” Len Shackleton, a research fellow at the Institute for Economic Affairs, said.

Reporting by Andy Bruce and Elizabeth Piper

Morrisons sees sales increase from lockdown

( via– Tue, 12th May 2020) London, Uk – –

The supermarket group says its first quarter has been “highly volatile”, affected by panic buying and lockdown.

Morrisons has reported a 5.7% rise in group like-for-like sales in its latest quarter, saying that demand was boosted by the coronavirus lockdown.

Morrisons, Britain's fourth largest supermarket group after Tesco, Sainsbury's and Asda, said the first quarter to 10 May had been “highly volatile”.

Sales were up during the period of coronavirus panic buying in the first half of March, before being hit by the initial lockdown and weak Easter sales.Coronavirus UK tracker: How many cases are in your area?

However, a “significant improvement” was seen in recent weeks, the group said.

Group sales jumped 10.8% over the last two weeks of the quarter, with a 9.6% contribution from retail and 1.2% growth in wholesale.

Retail sales were up 5.1% across the 14 weeks to 10 May and wholesale revenue increased 0.6%.

Frontline employees will get a 6% “thank you” annual bonus – up threefold from last year, the supermarket group said.

Looking ahead, Bradford-based Morrisons said there is little certainty but its best estimate is that 2020-21 costs relating directly to COVID-19 are likely to be broadly offset by £228m in savings through the government's business rates holiday.

Chief executive David Potts said: “We are facing into the unprecedented current challenges and are playing our full part to help feed the nation: working with determination, creativity and pace to serve customers as well as we possibly can.”

Also in the results:

  • Fuel like-for-like sales fell by around 70% after the UK went into lockdown in late March
  • The group more than doubled the number of online delivery slots through a significant increase in stores available for order picking, and is launching a click-and-collect service at nearly 280 stores by mid-June
  • Morrisons recruited 25,000 workers to boost capacity and offset staff absences during the virus pandemic

Shares in Morrisons were up by 3.2% at 11am.

By Sharon Marris

Aviation watchdog warns airlines over passenger refund rights

( via – – Mon, 11th May 2020) London, Uk – –

The aviation watchdog has warned airlines that they are legally required to provide refunds to customers who had their flights cancelled because of the coronavirus.

By law, plane operators must refund customers within seven days if their flight is cancelled.

But with fewer than 10% of UK flights taking off, airlines are struggling to deal with all the requests for refunds.

The Civil Aviation Authority (CAA) said it could take action against airlines.

“We are reviewing how airlines are handling refunds during the coronavirus pandemic, and will consider if any action should be taken to ensure that consumer rights are protected,” the regulator said in a statement.

Last month, consumer group Which? said it had received thousands of complaints from people struggling to secure a refund for their cancelled travel. Instead, airlines were offering customers vouchers to be used when lockdown are lifted.

‘Systematically denying refunds'

The travel industry's own estimates suggested £7bn of travellers' money was affected, Which? said.

Now the CAA has stepped in. “Under the law, consumers are entitled to receive a refund for their cancelled flights, despite the challenges the industry is currently facing,” it said.

“We support airlines offering consumers vouchers and rebooking alternatives where it makes sense for the consumer.

“But it is important that consumers are given a clear option to request a cash refund without unnecessary barriers.”

The regulator said it did not expect airlines to “systematically” deny consumers their right to a refund.

“We expect airlines to provide refunds for cancelled flights as soon as practically possible, whilst appreciating there are operational challenges for airlines in the current circumstances.”

Ryanair boss Michael O'Leary has said it will take up to six months to refund passengers for flights cancelled because of the coronavirus pandemic.

He told the BBC that the airline was struggling to process a backlog of 25 million refunds with reduced staff.

Airlines have been forced to ground the majority of their fleets because of the crisis, which has all but eliminated demand for air travel.

As a result, British Airways, Virgin Atlantic and Ryanair have all announced thousands of job cuts.

Airlines have also said that plans to introduce a 14-day quarantine period for anyone arriving in the UK from any countries apart from the Republic of Ireland and France will further hurt demand.

UK airports suggested that a quarantine “would not only have a devastating impact on the UK aviation industry, but also on the wider economy”.

Karen Dee from the Airport Operators Association, which represents most UK airports, said the measure should be applied “on a selective basis following the science” and “the economic impact on key sectors should be mitigated”.