UK construction industry unexpectedly picked up in September – PMI

(qlmbusinessnews.com via uk.reuters.com — Tue, 6th Oct, 2020) London, UK —

LONDON (Reuters) – Britain’s construction industry unexpectedly picked up speed in September, helped by a post-lockdown bounce in the housing market, a survey showed on Tuesday.

The IHS Markit/CIPS UK Construction Purchasing Managers’ Index accelerated to 56.8 from 54.6 in August, above all forecasts in a Reuters poll of economists which had pointed to a slight slowing.

“Following August’s slowdown, growth in UK construction activity rebounded strongly in September,” Eliot Kerr, an economist at IHS Markit, said.

“Forward-looking indicators point to a sustained rise in activity, with new work increasing at the quickest pace since before the lockdown and sentiment towards the 12-month outlook at its strongest for seven months.”

Construction firms continued to cut jobs, although at a significantly slower rate than in August.

Increases in activity in home-building – which reported the fourth sharp monthly increase in a row – and in commercial construction more than offset a fall in civil engineering work.

Britain’s housing market has boomed since coronavirus restrictions were lifted in May, driven by a tax cut, pent-up demand from earlier in the year and demand for more spacious homes after the lockdown.

Some industry officials have warned that the housing market recovery is likely to run out of steam with unemployment likely to rise as the government pares back its job support programmes.

The all-sector PMI – a combination of the construction, services and manufacturing surveys – fell back to 56.6 from August’s six-year high of 58.7, reflecting slower growth in Britain’s dominant services industry.

Reporting by William Schomberg

Ocado stock market value soared to £21.66bn overtaking Tesco as UK’s most valuable retailer

(qlmbusinessnews.com via theguardian.com – – Wed, 30th Sept 2020) London, Uk – –

Delivery-based supermarket’s value rises to £21bn despite selling 1.7% of UK’s groceries

Ocado has overtaken Tesco to become the UK’s most valuable retailer after its stock market value soared to £21.66bn.

Tesco is worth £21.06bn despite controlling nearly 27% of the UK grocery market. By comparison Ocado, which is already worth more than double the combined value of Sainsbury’s and Morrisons, sells just 1.7% of the UK’s groceries.

Former Tesco boss Sir Terry Leahy once famously described Ocado as a “charity” due to its track record of losses during the noughties.

Ocado has eclipsed Tesco just as the supermarket’s new chief executive, Ken Murphy, prepares to take charge on Thursday. He replaces Dave Lewis who has been running the UK’s biggest retailer since 2014.

Murphy faces a baptism of fire as Tesco grapples with recession, running supermarkets during a pandemic and a potential no-deal Brexit. He also needs to get the share price, which has gone sideways under Lewis, moving.https://www.theguardian.com/email/form/plaintone/3887Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

The Tesco board is painfully aware of the march of the Ocado share price. In the summer the company suffered one of the biggest-ever shareholder revolts over executive pay. Shareholders objected to a late change to part of an executive pay plan, which handed an additional £1.6m to Lewis and £900,000 to finance director Alan Stewart.

The change involved removing online grocer Ocado from a comparator group against which Tesco’s share performance was measured. With Ocado included the two men would not have qualified for the extra payout.

Investors have fallen in love with Ocado on the back of the success of its tech business Ocado Solutions, which sells its grocery-picking expertise to foreign supermarkets. The coronavirus pandemic has also triggered a boom in online shopping. At the height of the pandemic online food sales nearly doubled but, despite the recent slowdown, they now account for 12.5% of total grocery sales versus about 7% pre-crisis.

By Zoe Wood

Nokia wins contract with BT to supply 5G radio equipment

(qlmbusinessnews.com via uk.reuters.com — Tue, 29th Sept 2020) London, UK —

STOCKHOLM/HELSINKI (Reuters) – Nokia NOKIA.HE has clinched a deal with Britain's biggest mobile operator BT BT.L to supply 5G radio equipment, the Finnish company said on Tuesday, in one of the first major wins under new CEO Pekka Lundmark.

The deal will make Nokia BT’s largest equipment provider and comes just months after Britain said it would ban China’s Huawei Technologies from next-generation 5G telecom networks.

The size of the contract was not disclosed.

Nokia has won 63% of the BT contract, or about 11,600 radio sites, a source familiar with the matter said.

Nokia currently powers BT’s network in Greater London, the Midlands and rural locations, but the new contract will add multiple towns and cities across the United Kingdom.

BT Group CEO Philip Jansen said the agreement would allow it to continue the rollout of fixed and mobile networks, with digital connectivity critical to the UK’s economic future.

Under the current ban, UK operators will not be able to purchase 5G components from Huawei from the end of this year and must remove all existing Huawei gear from the 5G network by 2027, offering opportunities for for Nokia and Sweden's Ericsson ERICb.ST.

Nokia had a 21% share of the global radio access network (RAN) market in 2019, versus 29% for Ericsson and Huawei’s 31%, according to data from Moody’s.

While Nokia has been winning contracts from operators across the world, it suffered a setback earlier this month when it lost out to Samsung Electronics 005930.KS on a part of a contract to supply new 5G equipment to Verizon VZ.N.

Nokia is under new management with Lundmark taking the top job last month and telecoms veteran Sari Baldauf becoming the chairwoman in May.

Reporting by Supantha Mukherjee and Anne Kauranen

How Palantir Built Data-Mining Empire

Source: CNBC

After 17 years, data analytics company Palantir is making its public market debut. Best known for its sometimes controversial work with U.S. government agencies like the CIA, the DoD and ICE, Palantir has increasingly been working with commercial customers as well, which investors hope will put it on a path to profitability.

Chancellor Rishi Sunak gives businesses extra flexibility on repaying COVID-19 loans

(qlmbusinessnews.com via uk.reuters.com — Thur, 24th Sept 2020) London, UK —

LONDON (Reuters) – British finance minister Rishi Sunak said on Thursday he would introduce a new scheme to give businesses flexibility to repay loans taken out during the coronavirus crisis, giving them up to 10 years to repay the loans rather than six.

Under the government’s Bounce Back Loan Scheme, 1.3 million small businesses have taken out a total of 38.0 billion pounds ($48.4 billion) in loans worth up to 50,000 pounds each, from banks which have received a 100% state guarantee.

“To give those businesses more time and greater flexibility to repay their loans, we are introducing Pay-as-you-Grow. This means loans can now be extended from six to 10 years, more than halving the average monthly repayment,” Sunak told parliament.

“Businesses who are struggling can now choose to make interest only payments, and anyone in real trouble can apply to suspened repayments altogether for up to six months.”

Reporting by David Milliken and Andy Bruce

Lockdown fears cause shares to fall sharply in travel, hotel and pubs

(qlmbusinessnews.com via bbc.co.uk – – Mon, 21st Sept 2020) London, Uk – –

Leading shares across Europe have fallen sharply in morning trading amid fears that a renewed rise in coronavirus cases will blight economic prospects.

In London, the benchmark FTSE 100 share index was down more than 3%, with airlines, travel firms, hotel groups and pubs leading the rout.

Worst hit was British Airways owner IAG, which slumped more than 12%.

Similar falls were seen on markets in Paris, Frankfurt and Madrid.

Banking shares were affected by an extra set of concerns as allegations of money-laundering surfaced in leaked secret files.

HSBC, the bank at the centre of the scandal, saw its share price fall more than 5% in London, but the revelations dragged down the entire sector, with Barclays, Lloyds and NatWest all dropping about the same amount.

The downward trend affected all but a handful of stocks on the UK's 100-share index. Only online delivery service Just Eat, supermarkets Tesco and Morrisons and miner Fresnillo made it into positive territory.

The FTSE 250 index, seen as a better reflection of the health of the UK economy, was down 4% by lunchtime.

One of its biggest fallers was pub and restaurant owner Mitchells & Butlers, which dropped more than 15% as concerns grow that the hospitality industry would have most to lose from a fresh lockdown.

The pound also lost ground against the dollar, falling 0.47% to $1.2863 by lunchtime. It fell marginally against the euro to €1.0910.

Why does all this matter to me?

Many people are more affected by stock market falls than they might think.

There are millions of people with a pension – either private or through work – who will see their savings (in what is known as a defined contribution pension) invested by pension schemes. The value of their savings pot is influenced by the performance of these investments.

Pension savers mostly let experts choose where to invest this money to help it grow and a proportion will be in shares.

Widespread falls in share prices are likely to be bad news for these investments, although pension investors stress these are long-term investments and are designed to ride out bouts of weakness.

Analysis: By Theo Leggett

There has certainly been an element of European unity on the markets today, with the FTSE 100 index in London, the Cac 40 in Paris, the Dax in Frankfurt and the Ibex in Madrid all suffering similar falls.

The reason behind the gloom seems pretty clear. With the number of Covid-19 cases multiplying rapidly here and in many European countries, there's a real prospect of new restrictions on daily life. In some regions – such as Madrid, for example – they're already in place.

The fear is that although these measures are unlikely to be as severe as the lockdowns in spring, they will nonetheless weigh on economic activity and could stifle the post-lockdown recovery.

Shares are down across the board, but inevitably, the companies which rely on people being able to get out and about and mingle are among the worst affected.

Airlines, tourism firms and hospitality businesses have already had a dreadful year – and investors know they can ill afford further setbacks.

‘Bitter pill'

Coronavirus cases have been surging in many European countries, as governments strive to avoid another round of national lockdowns.

In the UK, top scientists are warning that the country is at a “critical point” in the pandemic and “heading in the wrong direction”.

Prime Minister Boris Johnson is understood to be considering a two-week mini-lockdown in England – being referred to as a “circuit-breaker” – in an effort to stem widespread growth of the virus.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: ”The FTSE 100 is worst hit among its European peers with a storm of pessimistic news swirling, affecting sectors across the board.”

She added that concerns for the travel industry had had a “domino effect”, with aircraft engine manufacturer Rolls Royce hit, as investors saw no end to the falling demand for new planes.

At the same time, the prospect of evening coronavirus curfews, after a summer of recovering sales, was “a bitter pill to swallow” for the hospitality industry,

If you add the prospect of a no-deal Brexit into the murky mix, there is little surprise so many investors seem to have caught a severe case of the jitters today.”

UK economy continues recovery in July according to official figures

(qlmbusinessnews.com via bbc.co.uk – – Fri, 11th Sept 2020) London, Uk – –

By Dearbail Jordan Business reporter

The UK economy grew by 6.6% in July, according to official figures, but remains far below pre-pandemic levels.

It is the third month in a row that the economy has expanded.

But the Office for National Statistics (ONS) said that the UK “has still only recovered just over half of the lost output caused by the coronavirus”.

Hairdressers, pubs and restaurants contributed to growth after companies were allowed to reopen in July.

Is the UK economy back to pre-coronavirus levels?

Definitely not. The UK's economy – which is measured by the value and the volume of goods and services it produces – is still 11.7% smaller than it was in February, before lockdown was imposed.

Growth in July was also slower than the 8.7% expansion seen in June.

There are encouraging signs, however. Thomas Pugh, UK economist at Capital Economics, said the reopening of restaurants and pubs meant the accommodation and food services sector “rose by a whopping 140.8%” between June and July.

This had a knock-on effect for the alcohol industry which grew by 32.7%.

Keeping youngsters occupied while at home also continued to boost demand for toys and games, said the ONS, while holidaying in the UK supported campsites, cottages and caravan parks “because of a large increase in staycations”.

However, activity in the accommodation and food services sector was still 60.1% below the level recorded in February.

And while Mr Pugh expects the Eat Out to Help Out scheme to provide a further boost in August, “now that most sectors in the economy are open again there is little scope for further large rises in monthly GDP”.

Meanwhile, the car sector saw demand return to pre-pandemic levels.

“Car sales exceeded pre-crisis levels for the first time with showrooms having a particularly busy time,” said Darren Morgan, director of economic statistics at the ONS.

Analysis: By Faisal Islam

Up, up, but not away. The UK economy continued a sharp recovery from lockdown in July, growing by a bumper 6.6% in the month. But the rate of recovery was a little slower than in June, raising some concerns about the ongoing strength of the bounce back.

The economy is still nearly 12% smaller than before the pandemic crisis, and has recovered just over half of the lost output during the shutdowns.

While the third quarter is on course to see a record number for growth and the official end of recession, fears remain that the recovery could peter out.

Business groups continue to push for extensions to government support packages that are due to close. The figures in July reflected the partial reopening of retail, manufacturing, and some public sector activities such as schools.

How long will recovery take?

Forecasts vary but the consensus is it won't be swift.

The UK fell into recession after activity shrank for the first and second quarters of this year after the government announced a lockdown to stop the spread of the coronavirus.

And in the three months to July, the economy shrank by 7.6%.

Mr Pugh questioned how strong the UK's recovery would be throughout the rest of the year.

“Talk of tax rises at the next Budget, a further deterioration in the Brexit negotiations and a worrying rise in the number of virus cases and tighter social distancing restrictions will all conspire to slow the recovery even further,” he said.

Dean Turner, economist at UBS Global Wealth Management, predicts that it will take until the end of 2021 before the UK recovers to pre-pandemic levels.

“Even with a managed exit from the Brexit transition agreement, it is unlikely that the lost output would be recovered before the end of next year,” he said.

“The latest twist in negotiations raises the prospect that any recovery may take longer.”

What risks lie ahead?

The number of coronavirus cases in the UK have begun rising again and social gatherings of more than six people will be illegal in England from Monday.

“The recovery likely will stall if, as looks likely, new Covid-19 infections continue to rise, keeping people working from home and avoiding consuming services that require close human contact,” said Samuel Tombs chief UK economist, Pantheon Macroeconomics.

“Accordingly, we continue to expect GDP to be about 5% below its peak at the end of this year.”

Meanwhile, the Coronavirus Job Retention Scheme is due to end on 31 October.

Chancellor Rishi Sunak has been emphatic that it will not continue. However, the Resolution Foundation think tank said he “needs to reconsider his plans to swiftly phase out support given that the economic crisis will be with us for some time to come”.

Former prime minister and chancellor Gordon Brown, warned that ending the furlough scheme was a “cliff-edge” that could trigger “a tsunami of unemployment”.

“The government's got to change course here,” he told the BBC's Today programme.

Morrisons reported a £155m hit to profits

(qlmbusinessnews.com via news.sky.com– Thur, 10th Sept 2020) London, Uk – –

The chain moves to reward staff and investors as it slaps itself on the back for its response to the coronavirus crisis to date.

Morrisons has reported a £155m hit to profits from costs related to the coronavirus crisis.

The UK's fourth-largest supermarket chain said – like rivals – it had seen a surge in sales during the first half of its financial year in the run-up to – and during – the COVID-19 lockdown that began in March, which saw all non-essential retail shuttered.

It revealed an 8.7% increase in like-for-like sales, when fuel sales were excluded, in the six months to 2 August compared to the same period last year.Where jobs are being lost in UK economyWhere jobs are being lost in UK economy

But it said total revenues were down 1.1% to £8.73bn, reflecting the loss of fuel sales during the period as roads remained largely empty.

Morrisons reported profit before tax and exceptional items of £148m – down 25.3%.

It blamed the coronavirus costs bill but said the net hit came in at £62m because of business rates relief of £93m.

The chain took on an additional 45,000 staff to cope with demand as the crisis gathered pace – with in-store customers stripping aisles of essentials such as toilet roll ahead of the lockdown itself.

It reported that online and home delivery order capacity rose five-fold to help meet demand, with five new growth channels – Morrisons.com store pick, food boxes, doorstep, Morrisons on Amazon and Deliveroo – now operating.

Its results statement said: “The mix of the very strong first-half sales growth was weighted towards online channels and lower margin categories. In addition, fuel sales growth was very negative, our cafes were temporarily closed, and we invested in supporting our colleagues, NHS workers and farmers with extra discounts.”

Morrisons said it was to reward staff with a guaranteed annual bonus of 6%.

It raised its interim dividend by 5.7% and forecast continued sales momentum in the second half of the year, part-aided by fuel sales starting to build.

Listed supermarket chains have largely been spared the bloodbath for share values witnessed by many during the COVID crisis.

Morrisons – down almost 3% in the year to date – saw its stock fall by 4% in early trading on Thursday.

Arlene Ewing, investment manager at Brewin Dolphin, said of the company's update: “Morrisons' results are indicative of the wider challenge facing supermarkets – while many expected them to thrive in the current environment, buoyed by business rates relief among other things, that hasn't quite turned out to be the case.”

She added: “There are, nevertheless, positives to be taken in the form of expectations that COVID-19 costs will fall significantly in the second half, an increase to the dividend, and a relatively bullish outlook from management in this latest update.”

Chief executive David Potts said of the performance: “From the start of the pandemic we stepped up and put the company's assets at the disposal of the country to help feed the nation.

“Morrisons is at the heart of local communities and responded quickly when it mattered most, and we are very grateful for the British public's appreciation of all the vital work our colleagues are doing.

“I believe we are seeing the renaissance of British supermarkets.”

UK economy heading for its biggest contraction “in living memory”

(qlmbusinessnews.com via news.sky.com– Tue, 5th May 2020) London, Uk – –

A closely-watched survey shows an unprecedented slump for the dominant services sector during the first full month of lockdown.

The UK economy is heading for its biggest contraction “in living memory”, according to a report highlighting a slump in activity for the UK's powerhouse services sector.

The IHS Markit/CIPS Purchasing Managers' Index (PMI) for April suggested a contraction in quarterly GDP (gross domestic product) of at least 7%.

But it cautioned that the number would be expected to be far worse because its survey data does not cover large parts of the services economy including retail and activity among the self-employed – among the hardest hit by the COVID-19 crisis.

The sector's PMI reading came in at its weakest level since it first started in 1996, dropping to 13.4 in April from 34.5 in March.

Any reading above 50 represents growth.

A composite reading, that included manufacturing, released almost a fortnight ago laid bare the effects of the lockdown on the UK economy – in place since 23 March – highlighting an unprecedented slump.

Tim Moore, economics director at IHS Markit, said of the latest figures: “April's PMI data highlights that the downturn in the UK economy during the second quarter of 2020 will be far deeper and more widespread than anything seen in living memory.

“Historical comparisons of the PMI with GDP indicate that the April survey reading is consistent with the economy falling at a quarterly rate of approximately 7%, but we expect the actual decline in GDP could be even greater, in part because the PMI excludes the vast majority of the self-employed and the retail sector.

“Just one in five service providers managed to avoid a drop in business activity since March and those hardest hit by social distancing measures and travel restrictions often reported complete stoppages of business operations.”

The toll on the economy is acute because of massive government borrowing to pay for the series of support schemes on offer to businesses and individuals who are currently furloughed during the lockdown.

Government figures released on Monday showed the Job Retention Scheme was paying the bulk of wages due to 6.3 million people at a cost, to date, of £8bn.

Much depends on the timing of an easing in the lockdown – with details expected to be revealed on Sunday by the prime minister.

The Bank of England is due to give an update on its projections for the economy when it delivers its latest Monetary Policy Report this week.

A member of its rate-setting committee, Gertjan Vlieghe, has already suggested the UK could be living through the worst economic slump for several centuries with the recovery from lockdown likely to be U-shaped rather than one resembling a ‘V' – or quick bounce back.

A scenario by the Office for Budget Responsibility has pointed to the possibility of a 35% second quarter contraction in GDP with a leap in unemployment of two million.

Howard Archer, chief economic adviser to the EY ITEM Club, said he did not expect any further stimulus to arise from Thursday's meeting of the Monetary Policy Committee.

He said after the PMI reading: “We expect the economy to contract around 13% quarter-on-quarter in the second quarter on the assumption that there is some lifting of restrictions on activity during the quarter.”

Reporting James Sillars

WeWork co-founder Adam Neumann files a lawsuit against Japan’s SoftBank over $3bn deal

(qlmbusinessnews.com via theguardian.com – – Tue, 5th May 2020) London, Uk – –

Former CEO of office-sharing company accuses Japanese bank of abusing its power.

Adam Neumann, WeWork’s co-founder and former chief executive, has filed a lawsuit against Japan’s SoftBank, accusing it of abusing its power in order to terminate an agreement to buy $3bn (£2.4bn) of stock from him and other early investors in the office-sharing company.

SoftBank, which is run by Japanese billionaire Masayoshi Son who is also WeWork’s biggest investor, announced in early April that it was walking away from the share tender rescue deal hammered out last October to save WeWork from collapse.

It said at the time it had “no choice” but to scrap the rescue deal because WeWork had failed to meet several conditions. It also cited concerns about “multiple, new, and significant pending criminal and civil investigations”.

Neumann would have been the biggest beneficiary of the payouts to minority shareholders, as he was lined up to sell $970m worth of shares.

The lawsuit, filed in a Delaware court, said Softbank and its Vision Fund had let down Neumann and WeWork staff.

“Mr Neumann put his trust in [SoftBank and the Vision Fund] to be stewards of WeWork, which he — and thousands of others — had worked so hard to build,” the lawsuit said.

Neumann had upheld his end of the bargain, according to the filing, while WeWork’s Japanese investors had not.

“The abuses committed by [SoftBank] and SBVF [SoftBank Vision Fund] are so brazen that they have prompted legal action by a special committee of WeWork’s board,” the lawsuit added.

Responding to Neumann’s lawsuit, Rob Townsend, the SoftBank chief legal officer, said: “SoftBank will vigorously defend itself against these meritless claims.”

He added: “Under the terms of our agreement, which Adam Neumann signed, SoftBank had no obligation to complete the tender offer in which Mr Neumann – the biggest beneficiary – sought to sell nearly $1bn in stock.”

Neumann resigned as chief executive last September from the firm he co-founded in 2010, after scrapping plans for a stock market flotation. Investors balked at the company’s sky-high valuation. It had been valued at $47bn, despite losing $3bn in the past three years, but that valuation was slashed to $8bn by the time of the bailout in October.

SoftBank has been losing money on its investments and last week predicted a wider full-year loss of 900bn yen (£6.8bn). It expects to lose £5.3bn from its investment in WeWork alone.

By Julia Kollewe

UK Finance figures show one in nine mortgage borrowers on payment break

(qlmbusinessnews.com via news.sky.com– Tue, 14th April 2020) London, Uk – –

UK Finance figures showed that around 61,000 mortgage holidays were being granted every day over recent weeks.

One in nine home loans in the UK are now on a mortgage holiday because of measures to support those affected by the coronavirus pandemic, new figures show.

UK Finance, the trade body for Britain's banks and building societies, said lenders had agreed to give repayment breaks to more than 1.2 million mortgage borrowers.

The number of payment holidays in place more than tripled in the two weeks between March 25 and April 8, growing from 392,130 to 1,240,680, the organisation said.

That meant an average of around 61,000 were being granted by lenders every day.

The figures were disclosed after a series of measures to help people facing financial difficulties due to the pandemic – including mortgage holidays – were announced by lenders a month ago.

For the average mortgage holder, the payment break amounts to £260 a month of suspended interest payments.

UK Finance chief executive Stephen Jones said: “The industry has pulled out all the stops in recent weeks to give an unprecedented number of customers a payment holiday, and we stand ready to help more over the coming months.

“We understand that the current crisis is having a significant impact on household finances for people across the country.”

However, Mr Jones said that payment holidays were not the right solution for everyone and borrowers should check with their lenders about the support available and how to apply.

The mortgage holidays are designed to help people struggling to make their payments, for example if they have had a pay cut or their work has temporarily stopped due to COVID-19.

They can request a mortgage payment holiday of up to three months.

Payment holidays are available to customers who are up-to-date on their mortgage payments. They will still owe the money and interest will still accrue.

Homeowners applying for a mortgage payment holiday will need to self-certify that their income has been either directly or indirectly impacted by coronavirus.

UK Finance has said firms will make every effort to ensure payment holidays do not negatively impact on credit files.

It added that telephone lines were extremely busy so customers were advised to look at their lender's website in the first instance.

Borrowers have been urged not to cancel their direct debits before a payment holiday has been agreed, as this will be counted as a missed payment and could impact their credit file.

Banks have been under pressure to act as the coronavirus crisis takes a heavy toll on the economic situation of millions of Britons.

Many have already axed dividends and cut bonuses for top bosses.

But analysis by Sky News last week revealed that banks were raising interest rates on mortgages, defying efforts by the Treasury and Bank of England to ease the burden on households.

John-Paul Ford Rojas

Pound takes a hit as Boris Johnson’s battles coronavirus

(qlmbusinessnews.com via news.sky.com–Tue, 7th April 2020) London, Uk – –

Market experts say the PM's condition will be reflected in sterling's value as he is treated for COVID-19 in intensive care.

The pound has taken a hit against the safe haven dollar on news of Boris Johnson's deterioration as he battles coronavirus in intensive care.

Sterling lost six tenths of a cent against the greenback late on Monday evening when it was confirmed the PM's condition had taken a turn for the worse.

Market analysts warned that the UK currency was likely to be pegged to developments on Mr Johnson's health as Dominic Raab, the foreign secretary, steps up to assume some of his responsibilities.

The pound had been trading at around $1.23 in advance of the Downing Street statement but had recovered most of the ground lost during Asia trading overnight.

Its fortunes were in stark contrast to those of equity markets after the week began with solid gains in Asia and in Europe.

The Dow Jones Industrial Average in New York clawed back almost 8% of value lost since markets first took fright from COVID-19 in February.

Tuesday saw a cautious clawback in Asia, despite that lead from New York, while the FTSE 100 built on the previous session's 3% gain and was a further 3% up, hitting 5,752 going into the afternoon.

Coronavirus: Prime Minister Boris Johnson moved to intensive care after condition worsens

Analysts saw US indices making further strides at the open on Wall Street.

They attribute the rally this week to signs the COVID-19 crisis could be easing in the worst-hit regions of Europe.

Travel-related stocks – worst hit since the rout in values began in February – saw the biggest gains in London with cruise operator Carnival and easyJet both up 20% though still sharply down on the year to date.

Oil firms also staged a recovery on growing investor hopes of an output cut to boost weak prices being agreed by major producing nations.

Cineworld was among companies to update on its fortunes – as all its 787 cinemas closed globally.

It suspended the payment of its latest dividend while bosses said they had agreed to defer pay and bonuses.

But market analysts said the pound was a clear focus given Mr Johnson's condition – marking a new front for its fortunes since the collapse in value witnessed since the Brexit vote in 2016.

Chris Scicluna, head of economic research at Daiwa, said: “Clearly the pound has weakened and that reflects the uncertainty and clarity over how much authority Raab will have.

“From an economic point of view there's unlikely to be much change.

“But if and when there are difficult decisions to be made, the lack of guidance at the top could be concerning.”

Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo, said: “The currency market has remained fairly calm, but there will be more downside for sterling if Johnson's condition worsens.”

By James Sillars

US Senate agree massive economic relief package worth more than $1.8 trillion

(qlmbusinessnews.com via bbc.co.uk – – Wed, 25th Mar 2020) London, Uk – –

US President Donald Trump and the Senate have agreed a massive economic relief package worth more than $1.8 trillion (£1.5tn).

The package includes money to bail out industries that have been affected by the coronavirus crisis.

Republican Senate Majority leader Mitch McConnell described it as a “wartime level of investment” in the economy.

Markets surged in the US on Tuesday in anticipation of a deal, and shares rose in Europe and Asia on Wednesday.

On Wall Street, the Dow Jones jumped by 11.4% on Tuesday – its biggest one-day gain since the Great Depression.

Japan's benchmark Nikkei 225 index closed 8% higher on Wednesday following news of the relief deal.

Markets in Europe were also trading higher, with London's FTSE 100 index up more than 1%.

Full details of the deal agreed in the US will not be published until later on Wednesday. However, it is expected to contain measures to help people pay bills if they are laid off because of the virus, expand unemployment assistance by $250bn and get $350bn in emergency loans to small firms.

Mr McConnell said it would also “stabilise” key industrial sectors and give money to hospitals and other healthcare providers which were having difficulty getting equipment.

“We're going to pass this legislation later today,” Mr McConnell added.

Senate Democratic Leader Chuck Schumer called the package “the largest rescue package in American history”. He said it was a “Marshall Plan” for hospitals. “Help is on the way, big help and quick help.”

Separately on Tuesday, President Trump said he wanted to get the economy up and running again by Easter.

He said he was speaking to the Coronavirus Taskforce about when to open the US for business and that the Easter weekend -12 April – presented a “beautiful time, a beautiful timeline” and that he hoped to be able to open at least some sections of the country.

Reacting to news of the stimulus package, Tom Stevenson, investment director at fund manager Fidelity International, said: “It's good news, but we're not out of the woods yet.

“When markets are falling, you get these big rallies but you shouldn't get stuck on that. They do bounce around in these situations.”

The latest swing in share prices continues a period of unprecedented volatility as markets react wildly to the economic impact of the coronavirus pandemic.

This month alone has seen the Dow having the five biggest daily gains and five biggest falls of its 135-year history.

Many countries are now working on stimulus packages to support their economies, but these plans have received mixed responses from investors.

The US rescue package follows five days of intense negotiations to try to agree a deal that will provide aid for American workers and businesses.

Before it becomes law the deal must get through the Republican-controlled Senate, the Democrat-controlled House of Representatives and be signed by President Trump.

The US central bank, the Federal Reserve has already announced $4tn in extra lending to help stimulate the economy in the face of the coronavirus.

Last week, Treasury Secretary Steve Mnuchin predicted that US unemployment could reach 20%. On Thursday, the Treasury Department will release last week's new jobless claims, and the numbers are expected to be in the millions.

A Goldman Sachs report estimated that the nation's gross domestic product in the second quarter could shrink by 24%, dwarfing the previous 10% record decline in 1958.

Global spread

America is more than midway through a 15-day attempt to slow the spread of the virus through social distancing.

Nearly 19,000 people have died with coronavirus across the planet since it emerged in China's Wuhan province in January, and more than 420,000 infections have been confirmed.

Southern Europe is now at the centre of the pandemic, with Italy and Spain recording hundreds of new deaths every day.

Governments around the world have responded by locking down societies in the hope of slowing the spread of the virus.

RBS Group plans to change its name to NatWest later this year

(qlmbusinessnews.com via bbc.co.uk – – Fri, 14th Feb2020) London, Uk – –

Royal Bank of Scotland (RBS) Group has said it plans to change its name later this year, as it reported a near doubling of annual profits.

The Edinburgh-based bank, which owns RBS, NatWest and Ulster Bank, said it would rename itself as NatWest Group.

The bank reported profits of £3.1bn for 2019, nearly double the £1.6bn seen the year before.

New RBS chief executive Alison Rose called the results the “start of a new era” for the bank.

It is thought that Ms Rose is hoping a rebrand will help shift the lender's image away from its association with the financial crisis.

The bank was rescued by the government in 2008 in the aftermath of the financial crisis at a cost of £45bn and it is still 62% state-owned.

Ms Rose told the BBC's Today programme that the name change would not alter any services for RBS or NatWest customers.

About 80% of the bank's customers are thought to use NatWest. Names of individual NatWest and RBS branches will remain the same.

She also said that the name change would not result in any job cuts across the group.

This is Ms Rose's first set of results for the lender. She became the first woman to lead one of the so-called big four largest UK banks when she was appointed last year.

Analysis: Dharshini David

Crucial questions unanswered

Today's announcement was not just the first set of full-year results unveiled by new chief executive Alison Rose but also the long-awaited unveiling of her strategy.

But many crucial questions remain unanswered, with Ms Rose failing to address recent press reports that claimed job cuts may be in store.

RBS was the subject of a £45bn state bailout during the financial crisis, and remains 62% taxpayer-owned. A 25-year veteran of the bank, Alison Rose is one of the few senior executives left from the pre-crisis era, when former boss Fred Goodwin's overambitious expansion plans left the bank in a perilous state.

More than a decade on, it falls to her to complete the clean-up operation. She says the name change for the parent company marks a new era, but the real challenge is to prove she can get the bank back into a state where the remaining stake can be sold without incurring a hefty loss for taxpayers.

Climate commitment

RBS also announced it was committed to “at least halve the climate impact” of its financing activity by 2030.

It says it will stop lending to coal companies by the end of the decade.

The bank also confirmed it would make its own operations “net carbon zero” by the end of this year.

That follows on from a pledge by Lloyds Banking Group to halve the amount of carbon emissions it finances through personal and business loans by 2030.

A continuity candidate

Ms Rose has been at RBS for more than 25 years, mainly in a number of roles in its investment bank.

She was previously deputy chief executive of NatWest Holdings, and before Ms Rose was appointed chief executive of the RBS group she was head of commercial and private banking.

She worked her way up after joining the bank as a graduate trainee in 1992.

Unlike her predecessor Ross McEwan, she is based solely in London, although the bank has its headquarters in Edinburgh.

Ms Rose is also paid more than her predecessor, with her annual salary set at £1.1m compared with Mr McEwan's £1m.

Shares hit

RBS's share price fell by nearly 5% after its results.

Neil Wilson, chief market analyst at Markets.com, said markets needed “some convincing”, despite the jump in profits.

But he said “it's clear RBS is putting legacy conduct issues behind it and has got the payment protection insurance (PPI) monkey off its back”.

The bank took a £900m charge for mis-sold PPI in 2019, which was at the top end of its expectations.

Mr Wilson added: “Now that the PPI deadline has passed, the bank has much greater visibility of future cash generation.”

How Global Trade Runs on U.S. Dollars

Source:WSJ

Nearly 90% of international transactions in 2019 were in U.S. dollars, giving the U.S. extraordinary power over nearly every entity that imports or exports anything anywhere. Here’s how the global economy runs on the U.S. dollar — and why some countries are trying to chip away at its dominance.

Coronavirus fears cause shares and oil price to fall

(qlmbusinessnews.com via bbc.co.uk – – Mon, 27th Jan 2020) London, Uk – –

Worries over the continued spread of the coronavirus have hit the financial markets, with London's FTSE 100 share index dropping more than 2%.

Airlines and companies with significant sales in China saw some of the biggest share price falls.

The coronavirus has killed 81 people in China with almost 3,000 confirmed ill, while at least 44 cases have been confirmed abroad.

The price of oil also fell, with Brent crude dropping 3% to $58.65 a barrel.

Among the biggest share price declines was luxury clothes maker Burberry, which fell 5.5%. It makes about 16% of its sales in China, one of its fastest-growing markets, and has warned investors that a drop in Chinese spending could spell a decline in its own revenues.

Shares in InterContinental Hotels Group dropped 4.7%. It says China and Hong Kong are a “growing share of our business” and contributes 8% of the firm's profit.

British Airways owner IAG, which also contains Iberia, fell 5.6%, while HSBC Holdings, which takes most of its profit from Asia, fell 3.5%.

Shares across Europe saw similar declines, with the German Dax and French Cac 40 indexes both down by about 2%.

Analysts at research firm Bernstein say Chinese consumers had spent $149bn (£114bn) during the Chinese New Year celebrations last year and that will probably be smaller this year due to travel curbs.

Companies in China have advised staff to work from home in an attempt to slow the spread of the deadly coronavirus.

Businesses are also offering workers longer holidays, as well as telling employees returning from the most affected areas to stay away from work.

Janet Mui, global economist at Cazenove Capital, told the BBC's Today programme that China's economy could suffer as the outbreak has happened over Chinese New Year, when a lot of shopping is done and gifts exchanged.

“If you look at history the most comparable example would be the Sars episode in 2003,” she said.

China's annual growth slumped from 11% to 9% in the wake of that outbreak.

Greggs to pay staff special bonus after success of UK vegan sausage roll

(qlmbusinessnews.com via uk.reuters.com — Wed, 8th Jan 2020) London, UK —

LONDON (Reuters) – British bakery operator Greggs (GRG.L) said will pay staff a special bonus after what the CEO described as a “phenomenal” year that included the launch of a vegan-friendly sausage roll and higher-than-expected profits.

Greggs, present in more than 2,000 stores in Britain, recently also launched a vegan version of its steak bake as more and more Britons try to cut down on meat and dairy.

The company said it would spend 7 million pounds ($9.2 million) on a one-off payment for its 25,000 employees, giving around 19,000 of its longest-serving staff about 300 pounds each.

CEO Roger Whiteside called 2019 “phenomenal” and said Greggs, which already shares 10% of annual profits with staff, was making an extra payout for the first time.

“This is all about the front line getting 300 pounds in their pocket as a thank you at the end of January for their help in delivering what has been an exceptional year,” he said.

Underlying store sales grew 9.2% over the 12 months to 28 December, as it attracted new customers for products including a vegan donut and vegan soups.

In a sign of the fanfare attached to vegan launches, earlier in January, dozens of people were pictured queuing at midnight at a Greggs branch in northern England to be the first to try the vegan steak bake.

“They’re flying off the shelves,” Whiteside said of the steak bake, which is made with meat substitute Quorn.

Annual pretax profit would be “slightly higher” than expectations, it said.

Analysts expect Greggs to post a 24% jump in pretax profit to 111.6 million pounds for 2019, Refinitiv data shows.

Whiteside said there would be headwinds in 2020 however as wage costs and the price of pork both rise.

Shares in Greggs, up 70% in the last year, were down 2% in early trade before moving into positive territory, standing up 0.7% at 0957 GMT.

Future growth would come from more shops at airports, drive-throughs and by expanding its home-delivery business, he said.

Whiteside, a former Marks & Spencer and Ocado executive, has overseen a 405% share price rise since he took over in 2013.

Greggs was founded in 1939 when John Gregg, who had started off delivering eggs and yeast by bicycle, set up a shop.

By Sarah Young

Oil prices have risen sharply after the killing of a top Iranian general in Iraq

(qlmbusinessnews.com via bbc.co.uk – – Fri, 3rd Jan 2020) London, Uk – –

Oil prices have risen sharply after the killing of a top Iranian general in Iraq.

Analysts warned the action could escalate tensions in the region and affect global oil production.

The price of Brent crude jumped by more than 4% to hit $69.50 a barrel at one point, the highest since mid-September.

It came after General Qasem Soleimani was killed in a US drone strike at Baghdad airport, which the Pentagon described as “defensive action”.

The price spike pushed oil stocks on the London stock exchange higher, with BP up 2.7% and Royal Dutch Shell nearly 1.9% higher.

Shares in US oil companies such as Exxon Mobil dropped, however, amid a wider US market fall prompted by weak manufacturing data and concerns about the implications of the Middle East conflict.

At mid-day in New York, the Dow was down about 0.7%, while the S&P 500 was off 0.5% and the Nasdaq was 0.6% lower. The declines followed record highs a day earlier.

“2020 opened on a very positive note,” said Aneeka Gupta of Wisdom Tree. “This event has actually stalled the bullish optimism we've seen.”

Sanctions

Tensions between the US and Iran have been rising since the US pulled out of a nuclear deal between Iran and other countries meant to curb Iran's nuclear programme and prevent it from developing nuclear weapons.

The US also reimposed sanctions on Iran, a move that has hurt the country's economy and severely restricted its oil exports.

This recent strike has sparked new fears of risks to energy supplies in the region.

Several of the world's biggest oil producers can be found in the area, which could be affected if there were a wider military confrontation involving Iran.

As much as a fifth of global supplies pass through the Strait of Hormuz, a narrow passage which provides access to the Gulf.

Caroline Bain, analyst at Capital Economics, said further conflict would likely lead to additional, short-term spikes in oil prices.

But even if tensions subside, the firm expects the cost of oil to move higher this year due to “output restraint, slower growth in US oil production and a gradual pick-up in global economic growth,” she added.

What does this mean for oil markets?

Analysis by Andrew Walker, BBC World Service economics correspondent

The potential disruption to the global oil market from conflict in the Gulf is severe.

The US Energy Information Administration estimates that 21% of oil used in 2018 passed through the Strait of Hormuz, a narrow passage which has Iran on its northern shore.

Some of the biggest producers would be affected if the Strait could not be safely navigated. Saudi Arabia, Iraq, Kuwait, Iran, UAE and Qatar all ship some or all of their exports via the Strait.

Saudi and the UAE have pipelines that bypass the Strait but they have nowhere near the capacity to take all the oil. There is also the possibility of Iranian military action against other countries' oil installations.

Last year there was a drone attack on the Saudi industry. Houthi rebels from Yemen claimed responsibility and they are widely seen as having Iranian backing.

Previous episodes of Middle East conflict have seen higher oil prices which contributed to global economic slowdowns, from the mid-1970s to the early 1990s.

What is different now, and what might moderate the impact, is the presence of the US shale industry, which can respond relatively quickly to supply shortfalls and higher prices.

UK Manufacturers see orders pick-up after no-deal Brexit avoided – CBI

(qlmbusinessnews.com via uk.reuters.com — Tue, 19th Nov 2019) London, UK —

LONDON (Reuters) – British manufacturers saw a pick-up in orders in November albeit from near decade-low levels, helped by the avoidance of a no-deal Brexit at the end of October, a survey by the Confederation of British Industry showed on Tuesday.

The CBI’s monthly orders balance rose to -26 from -37 in October, their highest level since August and stronger than a median forecast of -31 in a Reuters poll of economists.

October’s level of orders was the weakest in nine years.

“While the thick fog of uncertainty from a no-deal Brexit has lifted somewhat, the manufacturing sector remains under pressure from weak global trade and a subdued domestic economy,” Anna Leach, the CBI’s deputy chief economist, said.

“It’s clear that the outlook for the sector remains precarious.”

Export orders picked up after touching their lowest level since the financial crisis of 2008.

Manufacturers expected output to be flat over the next three months, the CBI said.

The European Union has set a new Brexit deadline of Jan. 31 and Prime Minister Boris Johnson has called an election for Dec. 12 in a bid to break the impasse in parliament over the divorce deal he negotiated with Brussels.

Reporting by William Schomberg

BP profits fall amid weak oil prices and hurricane impact

(qlmbusinessnews.com via theguardian.com – – Tue, 29th Oct 2019) London, Uk – –

BP’s profits have fallen sharply as global oil prices tumble amid gloomy forecasts for the global economy.

The oil major reported underlying profits of $2.3bn (£1.76bn) for the last three months on Tuesday morning, compared with $3.8bn in the same months last year.

The decline comes just weeks after BP announced its chief executive Bob Dudley would step down after almost a decade at the helm.

Dudley blamed weaker global oil prices, a string of one-off financial costs and the impact of Hurricane Barry, which dealt a “significant” blow to BP’s oil production in the Gulf of Mexico in July.

Dudley will end his four-decade career at BP early next year and be replaced in February by Bernard Looney, currently head of exploration and production.

The profits from Looney’s business division fell to $2.1bn for the last quarter, from $3.4bn in the same months last year following a fall in the global oil price.

The oil price has slumped to an average of $62 a barrel in the last quarter, from more than $75 a barrel a year ago.

The oil price slide comes a year after the oil major agreed to buy a $10.5bn stake in the US shale boom from BHP Billiton, in a deal seen as a show of confidence that global oil prices would remain at about $70 a barrel.

Brian Gilvary, the BP chief financial officer, told Bloomberg the company was able to get the deal over the line due to higher oil prices over last summer – and he expected oil prices to remain at about $70 a barrel.

There has been growing public opposition in recent months to the fossil fuel giant’s contribution to the climate crisis. Earlier this month the Royal Shakespeare Company ended its sponsorship deal and protesters targeted the National Portrait Gallery over BP’s ongoing support.

An investigation by the Guardian revealed that 20 oil and gas companies – including BP, Shell, Chevron, ExxonMobil and Total – could be directly linked to a third of greenhouse gas emissions since 1965.

The companies are planning to keep increasing their oil production, despite global efforts to avoid a runaway climate crisis by limiting carbon emissions, in large part from US shale reserves.

By Jillian Ambrose