UK borrowing hits record £55bn in May; retail sales rebound -business live
Rolling coverage of the latest business news, as new public data reveals the growing costs of the Covid-19 pandemic
2.58pm BST
2.31pm BST
Wall Street is open for trading and it's a strong positive start for US stocks:
2.15pm BST
The pound is now at its lowest level against the euro since late March.
1.43pm BST
US futures are pointing to a positive open on Wall Street in less than an hour's time:
1.23pm BST
Following the borrowing data release this morning, the Office for Budget Responsibility has updated its analysis of Covid-19's impact on the UK economy:
Relative to our reference scenario, initial estimates show that GDP and overall tax receipts have performed a little less badly than assumed, while average earnings have fallen less sharply.
The headline unemployment measure has yet to show much effect from the crisis, but the claimant count measure that relates directly to benefit claims has climbed very sharply.
Today's data highlight the gathering fiscal impact of the coronavirus crisis, but the numbers will be prone to revision. It will be many months before the true scale of the shock becomes clear
Our latest Fiscal sustainability report will be published on 14 July.
We will update our coronavirus scenario analysis, exploring three economic scenarios, and publish our latest long-term projections of the public finances.#OBRFSR2020 pic.twitter.com/DUgLLU2QLD
1.17pm BST
Newsflash: Spain is expecting a decision in the coming hours as it negotiates with the UK over a travel corridor that would avoid quarantine.
That's according to Reuters citing a foreign ministry source.
12.59pm BST
UK Finance says lenders have granted 1.9m mortgage payment holidays over the past three months.
It means one in six mortgages in the UK are now part of a temporary deferred payment plan, which on average is worth 755 per month.
Borrowers who can afford to resume payments should do so, as it will always be in their best interests in the long run. However, for those who can't, then help is at hand. Where possible, borrowers will be able to explore their options online.
12.30pm BST
The CEO of crisis-hit payment group Wirecard has resigned just a day after the company said that 1.9bn worth of cash seemed to be missing. (That's roughly a quarter of its total balance sheet.)
In an incredibly short market statement, Wirecard said:
In mutual consent with the Supervisory Board of Wirecard AG, Dr. Markus Braun resigned today with immediate effect as member of the management board.
The Supervisory Board of Wirecard AG appointed Dr. James H. Freis, Jr., who was appointed yesterday as member of the management board, as interim CEO with sole power of representation.
11.32am BST
The pound is losing ground this morning and has fallen below $1.24 for the first time since 1 June.
Cable breaks below 1.24 handle#GBP -0.26% against other currencies#GBPUSD 1.23909 -0.26%#EURGBP 0.90455 +0.29%#GBPAUD 1.80268 -0.58%#GBPJPY 132.5 -0.3%#GBPCAD 1.68331 -0.37%#GBPCHF 1.17873 -0.28%#GBPEUR 1.10553 -0.29%
11.07am BST
Some warm words for businesses trying to weather the pandemic from the Queen herself.
(But the real question on everyone's mind, surely, is whether the Queen expecting a V-shaped recovery?)
The Queen's message of support for companies and businesses trying to get back on their feet after #coronavirus:
At a time of great difficulty for many... I wish all businesses every success in their endeavours in the weeks and months ahead." pic.twitter.com/xQTaTWujtD
10.54am BST
While health secretary Matt Hancock hails the reduction of the coronavirus threat level from 4 to 3, there are still lingering concerns about how opportunists are taking advantage of consumers during the pandemic.
The Competition and Markets Authority has launched an investigation into four pharmacies and convenience stores suspected of charging excessive and unfair prices" for hand sanitiser products during the Covid-19 pandemic.
10.22am BST
On the face of it, the 12% jump in retail spending last month fits with the notion that the economy will bounce back quickly from Covid-19 once the lockdown restrictions are fully lifted, writes our economics editor Larry Elliott.
May's rise occurred even before non-essential stores were allowed to start trading in some parts of the UK on 15 June, so the increase appears consistent with the idea of a V-shaped recovery: an initial fall as the country went into lockdown in late March; an 18% drop in April when the quarantining was at its most intense; then a much stronger pick-up than expected in May.
Related: The 12% rise in UK retail spending should come with note of caution
10.02am BST
John Lewis is to reopen nine further shops next week in addition to 13 shops opened this week.
Cribbs Causeway in Bristol, Leeds, Liverpool, Milton Keynes, Newcastle, Peter Jones in west London, Southampton, Tunbridge Wells in Kent and York will all open on Thursday 25 June.
9.50am BST
Turning back to retail sales, Deloitte reckons the figures were boosted not only by DIY sales but beauty and clothing as everyone tries to look polished for inevitable (and for some, dreaded) Zoom calls.
Ian Geddes, head of retail at Deloitte, says:
In addition to household goods, purchases have also likely been driven by beauty products and, more notably, clothing items as many consumers continue to work from home, with an increased requirement for video conferencing and a more relaxed work' wardrobe.
During lockdown, consumers have pivoted to fewer but bigger food shops. Whether this trend will also translate into non-food remains to be seen.
For retailers, there are two options: a difficult balancing act to between re-creating a familiar shopping experience whilst implementing and maintaining strict new hygiene practices, or innovating and re-inventing the shopping experience for a post-COVID-19 world.
9.25am BST
The Bank of England says it's scaling back one of the measures it introduced at the start of the Covid-19 crisis that was meant to prevent the financial system grinding to a halt.
The Bank of England said it would offer 7-day US dollar repo operations just three days a week, rather than daily, from the start of July. (Repo operations are a type of short-term loan made to banks in order to regulate money supply.)
These central banks stand ready to re-adjust the provision of U.S dollar liquidity as warranted by market conditions.
The swap lines among these central banks are available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses, both domestically and abroad.
9.10am BST
Britain's public debt is larger than the size of the country's economy for the first time since 1963, after the government borrowed a record 55bn in May, the Guardian's Phillip Inman writes.
The total level of debt has risen by 173bn over the last year to reach 1.95tn, or 100.9% of GDP, as ministers introduced unprecedented support for businesses and households during the coronavirus crisis.
Related: UK debt is bigger than economy for first time since 1963
8.55am BST
Never underestimate the power of a good chart (especially when we're talking about the sheer scale of public borrowing since lockdown).
This one comes from PA graphics journalist Ian Jones:
How Covid-19 is hitting the public finances.
The size of the deficit in April/May was bigger than the entire annual deficit for last year - and for each financial year since 2013/14.
(Curious how the government doesn't call it the deficit anymore...) pic.twitter.com/PTlbyG1n9y
8.38am BST
A flurry of DIY spend helped prop up the May retail sales figures, according to the ONS.
It said household goods logged a 42% rise in sales last month, thanks to the re-opening of garden centres as well as hardware, paints and glass stores following lockdown.
First official economic performance data for May - retail sales out from @ONS this morning. A bounce back helped by DIY stores opening but activity still well below pre COVID-19 period. pic.twitter.com/Og0Yn7N7o3
8.13am BST
The Financial Conduct Authority has extended emergency measures to allow consumers impacted by the coronavirus outbreak to freeze loan and credit card payments until 31 October.
The measures, which were announced in April for an initial period of three months, also includes overdrafts, store cards and catalogue credit.
We have been working closely with other authorities, lenders and debt charities to support consumers in the current emergency.
The proposals we've announced today would provide an expected minimum level of financial support for consumers who remain in, or enter, temporary financial difficulty due to coronavirus.
8.06am BST
Chancellor Rishi Sunak has weighed in on the record-breaking government borrowing data:
Today's figures confirm that coronavirus is having a severe impact on our public finances.
The best way to restore our public finances to a more sustainable footing is to safely reopen our economy so people can return to work.
8.04am BST
As investors digest that data, European markets have opened for trading:
7.56am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
While this wasn't the morning for a leisurely coffee, there is some major data to chew on.
Government debt exceeds 100% of GDP for first time since the 60s will be the headline from public finance stats this morning https://t.co/l1g11NBSo1 pic.twitter.com/3IcDUS4aoU
PICK YOUR HEADLINE: UK Retail Sales either smashed record in May (+12.0% MoM) or down a huge 13.1% YoY. Reverse into your pre-prepared narrative on the shape of the recovery. Overall, data is coming in ahead of OBR/BoE scenarios & closer to single figure output decline in 2020
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