Pub group Marston's warns 2,150 jobs hit by Covid-19 restrictions – business live

Graeme Wearden

from on 2020-10-15 16:01 (#594GS)

Rolling coverage of the latest economic and financial news, as US weekly jobless claims hit a seven-week high

Latest: US jobless claims jump to 898,000
Full story: Job cuts at Marston's
Introduction: 2,150 Marston's hit by Covid-19 curbs
Markets pulled lower by coronavirus worries
Close: FTSE 100 down 1.7% at 5832 points

4.58pm BST

Time to wrap up. Here's the main stories of the day:

The number of new US jobless claims jumped last week, fuelling concerns that America's labor market is faltering. The initial claims total rose to 898,000, from 845,000, as firms continued to lay off staff.

Inevitably, and regrettably, recent restrictions will impact jobs. Since the start of the pandemic, our objectives have included protecting the health and livelihoods of our teams. Government support over the summer was vital, and around 10,000 colleagues have so far returned to work.

However, because of the recent additional restrictions, we have reluctantly concluded that around 2,150 pub-based roles currently subject to furlough are going to be impacted.

4.50pm BST

European investors can breath a sigh of relief - the worst day's trading in several weeks is over.

A broader risk-off tone has enveloped markets this morning, as yesterday's losses in the US are amplified in Europe where lockdown restrictions are spreading once again.

Investors in airlines are very jumpy at present, and Ryanair's news this morning has prompted another flurry of selling in the sector. easyJet, Ryanair and IAG have all tumbled, with airlines on the continent feeling the pressure too.

3.57pm BST

Edward Moya of trading firm OANDA reckons the markets will avoid a major slump -- supported by the prospect of Democratic Party success in next month's elections.

US stocks are tumbling as the economic outlook for the rest of the year looks bleak due to second wave virus fears and permanent labor market damage. Wall Street appears convinced a return of restrictive measures will yield further economic damage that will threaten the labor market recovery.

Traders are not holding their breath for a virus stimulus bill this side of the election so risky assets will have a hard time rallying. A significant selloff however seems unlikely as Wall Street prices in a Biden presidency and massive infrastructure spending.

3.33pm BST

With an hour to go, European stock markets are heading for their lowest close in over a fortnight.

The Stoxx 600 index is down 2.2%, dragged down by big losses in Italy (-2.95%) and Germany (-2.7%).

3.10pm BST

Today's jump in US jobless claims comes two days after UK unemployment hit a three-year high, and in a week where Covid-19 cases are rising alarmingly in many countries.

Our economics editor Larry Elliott has written about the challenge of saving lives while also protecting the economy:

Every country in the world is trying to find the sweet spot where the virus is suppressed with the minimum amount of economic damage, and most are making a better fist of it than the UK. Take South Korea, which has so far had just 43 8 deaths. It has had clusters of cases, and is projected by the IMF to see its economy contract by no more than 1.9% this year.

There are, clearly, lessons to be learned. Sweden shows the merits of a clear strategy and sticking to it. This is in marked contrast to the UK, where the government initially downplayed the threat, imposed some of the world's toughest restrictions, eased up as the economic cost mounted, actively encouraged people to eat out to help the hospitality sector, and is now back to where it started. Here the mixed messaging has left people confused, and in the circumstances it is surprising compliance with the restrictions is as high as it is. That, though, may have more to do with people taking steps to safeguard themselves voluntarily than any faith in the government.

2.33pm BST

The New York stock market is open...and there's plenty of red ink on the boards.

The S&P 500 index of US stocks has fallen 45 points, or 1.3%, at the open to 3,442.97 points.

2.29pm BST

Jason Brooks of KCBS Radio suspects that the rise in jobless claims could spur the White House to push harder for a stimulus package...

Hard to imagine a single #unemployment report having a massive impact on policy, but a rise in jobless claims back to about 900K isn't the kind of news an incumbent wants to see a couple weeks away from the election. We'll see if there's a renewed push from the WH for #stimulus

When I speak to Pelosi today I'm going to tell her that we're not going to let the testing issue stand in the way, that we'll fundamentally agree with their testing language subject to some minor issues. This issue is being overblown."

2.12pm BST

Wall Street is on track to fall over 1% when trading begins in around 20 minutes time.

The jump in unemployment claims has further darkened the mood, on top of fears over rising Covid-19 cases and disappointment over the stimulus talk deadlock.

Dow futures fall over 340 points on stalling economic rebound, stimulus impassehttps://t.co/O8qIYF5uFn pic.twitter.com/naPd4XYaZS

2.08pm BST

Today's jobless figures are a clear sign that America's economic recovery is losing steam, says Richard Flynn, UK Managing Director at Charles Schwab.

With continuing jobless claims, businesses struggling and concerns about a COVID-19 winter wave on the rise, it is evident that the U.S. economic recovery is losing some momentum.

In the U.S., employers have rehired workers, job cut announcements have dropped and job openings are up since the worst of the pandemic, but the number of permanent job losses has grown. And without further fiscal stimulus, these permanent job losses are likely to become more widespread.

On a day when major European cities are tightening up lockdown measures and worries continue over US stimulus measures, the jobless claims are not at the top of the list.

However, claims jumped last week, much more than expected and last week's number was adjusted upwards; that will grab attention and add to the downbeat mood of the day."

The latest figures on new workers claiming unemployment insurance (UI) cast a dark cloud over the nation's slow economic recovery. The number of new claims last week is more than four times higher than the pace of workers filing for unemployment a year ago - a sign that COVID-19 continues to deal heavy blows to the nation's labor market.

The worsening of the pace of UI claims this week reinforces the message from the latest September jobs report that the economy's pace of recovery is slowing down amid the ongoing pandemic. America is unlikely to see a full recovery and a return to low unemployment until the pace of weekly UI claims dials back significantly. As the virus remains in the driver's seat, today's elevated claims cast a shadow over the fate of the U.S. labor market in the next half year."

2.05pm BST

The jump in US jobless claims last week is another warning sign for the U.S. lawmakers to get their act together", says Naeem Aslam of AvaTrade.

The sad fact is that this situation is only going to get worse if we do not get any help in terms of another stimulus package.

1.55pm BST

Several commentators are concerned that the weekly US jobless claims total has hit its highest level since August.

Marketwatch's Jeffry Bartash fears the recovery may be slowing down...

LAYOFF WATCH: Initial jobless claims - aka layoffs - climb 53,000 to 898,000 in week of Oct. 10. Disappointing number. It's the highest reading in seven weeks and suggests labor-market improvement might be stalling. https://t.co/kZBuHJaPTH

Unemployment claims jumped in the past week to the highest level since August. That's a pretty strong signal that the U.S. labor market recovery is slowing. https://t.co/m6WiJxVWvs via @economics @readep pic.twitter.com/87upGMUCUI

Initial #unemployment claims +53k to 898k (SA) in w-e Oct10 & +77k to 886k (NSA)

> PUA claims (NSA): 373k (-91k) but careful w/ data

> Total UI+PUA: still very high 1.3 million new claimants!

> With prospects for a fiscal relief package dimming, this situation is worrisome pic.twitter.com/tc3UMYyOXF

1.37pm BST

Newsflash: The number of Americans filing new claims for jobless support has risen - and remains alarmingly high.

A total of 898,000 initial claims for unemployment were filed last week, up sharply on the 845,000 in the previous seven days (this is on a seasonally-adjusted basis).

OUCH! US initial jobless claims totaled 898K last week, an INCREASE of more than 50K compared to the week before. pic.twitter.com/5Ff3A10gaQ

Weekly Jobless Claims remains in uncharted (prior to 2020) territory pic.twitter.com/C6vmhHl7J4

BREAKING: 1.3 million Americans filed new unemployment claims last week, little changed from the week before. (886,000 state claims and 373,000 PUA).

In total, over 25 million Americans are currently receiving unemployment aid.

1.14pm BST

Many UK's nightclubs fear they will soon go out of business unless the government provides more support.

12.46pm BST

Heads-up: My colleague Simon Murphy reports that Italy is poised to be removed from England's travel corridor.

That would mean holidaymakers would need to quarantine for a fortnight on their return from the country, probably scuppering a few half-term breaks.....

Exclusive: Italy poised to be removed from England's travel corridor in fresh blow to holidaymakers, Guardian has learnt. Announcement expected later, with Vatican city & San Marino also due to be dropped from list but Crete added. https://t.co/ZJcQFJv2sD

12.28pm BST

British health and beauty retailer Boots has suffered a near 30% slump in sales in the last quarter, as the Covid-19 pandemic continued to hit its business.

Boots UK comparable retail sales decreased 29.2 percent on a constant currency basis as footfall in stores continued to be significantly reduced due to COVID-19, particularly in major high street, train station and airport locations. Footfall did, however, improve steadily in the fourth quarter compared with the third quarter.

Boots UK market share was lower in all categories except beauty, as the pandemic continued to impact heavily on buying habits and consumers temporarily shifted purchasing to one-stop grocery shopping.

Grim results at Boots in Q4 (to Aug 31) - UK total sales down 16.7% as 155% surge online insufficient to offset 29% drop in same-store sales

"Market share lower in all categories except beauty"

11.44am BST

Here's our news story on the job losses at Marston's:

11.43am BST

There's now a solitary riser on the FTSE 100 -- Just Eat, the online food ordering and delivery operator.

Just Eat has gained 1% today, bucking the selloff, to a new record high. Yesterday it reported a 46% surge in global sales in the third quarter, including 43% in the UK. That sales growth is likely to continue if further lockdown measures are introduced across Europe.

11.27am BST

Sheena Tandy, restructuring expert at law firm Shakespeare Martineau, says Marston's woes shows no hospitality company is safe from the impact of Covid-19:

The new restrictions placed on the country were always going to hit hospitality hard, and Marston's has shown that even industry giants aren't safe.

Confusion caused by the new tier system will only exacerbate hardships already faced by hospitality venues, with no one certain when things will return to normal. Although the new localised furlough scheme provides some relief, job cuts are still being made, showing just how close to the edge many pubs, bars and restaurants are.

11.20am BST

Simon Underwood, business recovery partner at accountancy firm Menzies LLP, says the sweeping job cuts at Marston's shows the thin line' between protecting health and the economy.

Closely following a wave of job cuts by rival pub chain, Greene King, this announcement is a reminder of the thin line Government is treading between protecting lives and livelihoods. Monday's tightening of restrictions across large swathes of the country is likely to trigger more restructuring plans in the hospitality and leisure sector.

The disproportionate impact that local lockdowns are having on hospitality businesses across the UK raises questions about whether moving to a sector-focused approach, as opposed to a geographical one, would be more appropriate.

11.08am BST

If the FTSE 100 falls much further, we could be looking at the lowest closing level since mid-May.

11.05am BST

After three hours of hefty selling pressure, the FTSE 100 is still languishing at a near-three-week low.

The index is currently down 133 points, or 2.25%, at 5,801 - on track for its its biggest one-day loss in close to four weeks (since the selloff on 21 September).

Renewed health concerns and tighter restrictions around Europe are hammering stocks this morning. In recent weeks, the chatter surrounding a possible stimulus package in the US grabbed traders' attention, but all the while the health situation was deteriorating.

We now find ourselves in a scenario whereby the pandemic is back in centre stage, while the prospects of a US relief package this side of the Presidential election seem very low. Dealers are dumping stocks for fear that economic activity will drop off because of the tighter restrictions in various parts of Europe.

10.40am BST

Banks are expected to increase the cost of credit card borrowing in the run up to Christmas following a recovery in demand for unsecured loans by British households.

10.38am BST

Nearly half of UK businesses are suffering lower turnover than a year ago, as the Covid-19 pandemic continues to hurt trading.

That's according to the latest survey of the UK economy from the Office for National Statistics.

Of businesses that have not permanently stopped trading, 41% said they had less than six months' cash reserves and 4% said they had none. 35% said they had more than six months' cash reserves and 20% were not sure.

10.23am BST

Every stock on the German DAX index has also fallen this morning.

Car makers are leading the selloff, with Volkswagen, Daimler and BMW all losing over 4.5%.

German Bund yields drop to lowest since March chaos on global de-risking as Covid-19 cases hit record in Germany. pic.twitter.com/asxYfYL0wv

9.56am BST

Lloyds Banking Group is adding to the pile of job losses announced this morning, with plans to cut 125 office staff.

As always, our immediate concern is for the union members who may be at risk of redundancy as a result of the changes. We'll be contacting all of the Accord members who are impacted by today's news to offer advice and support."

9.54am BST

The UK government's former homelessness adviser has a very grim warning for ministers today -- the country faces a period of destitution" in which families can't put shoes on" their children's feet.

Dame Louise Casey told the BBC that the government isn't providing enough support to people who can't work due to local Covid-19 curbs. It means we are looking at a period of destitution", she fears.

It's like you're saying to people, You can only afford two-thirds of your rent, you can only afford two-thirds of the food that you need to put on the table.'

There's this sense from Downing Street and from Westminster that people will make do. Well, they weren't coping before Covid."

UK faces "period of destitution" in which families "can't put shoes on" children, the government's former homelessness adviser Dame Louise Casey warnshttps://t.co/g3BdJZKmVI @BBCLauraK pic.twitter.com/NrzcXBxPYD

9.40am BST

The Europe-wide Stoxx 600 index has now fallen to a two-week low, down 2%.

That's its biggest daily drop since 21st September, as fears over the Covid-19 pandemic and the deadlock over a new US stimulus package hit confidence.

There were also negative comments from US Treasury Secretary Steven Mnuchin that a big stimulus deal was unlikely before next month's Presidential election, in line with previous comments from Donald Trump.

Ultimately investors are unnerved by what's going on with Covid-19 and how that is negatively impacting jobs and the ability for many businesses to succeed.

9.30am BST

Today's market selloff is also due to fading hopes of an early US stimulus package, to fight the impact of Covid-19.

Last night, US treasury secretary Steven Mnuchin said he and House of Representatives Speaker Nancy Pelosi were far apart" on some details of another coronavirus relief package.

Distinct jitters this morning:#FTSE 5845.97 -1.50%#DAX 12819.03 -1.60%#CAC 4873.24 -1.38%#AEX 564.15 -1.37%#MIB 19343.55 -1.35%#IBEX 6827.5 -1.29%#OMX 1817.649 -1.26%#STOXX 3224.26 -1.50%

not a nice board #FTSE100 #UKX pic.twitter.com/HdNdXX4HKd

9.09am BST

Stock markets across Europe have fallen sharply this morning, following the latest government restrictions to fight rising Covid-19 cases.

in London, the FTSE 100 has slumped to a three-week low, with every member of the blue-chip index. It's currently down 112 points, or 1.9%, at 5821.

The headline announcement was the imposition of a 9pm to 6am curfew in Paris, and 8 other French cities, that will be in place for at least six weeks. In Germany - which just saw its own record daily case increase - the new restrictions were less severe, but still include limits on the number of people at private gatherings, and curfews on bars and restaurants in the worst hit areas.

And the tightening continued, with bar and restaurant closures in the northeastern region of Catalonia in Spain, new mask restrictions in the Netherlands, and the shuttering of non-essential retailers, gyms and leisure centres in Ireland.

8.59am BST

Sky News warns that job cuts across the hospitality industry are mounting fast.

The jobs warning is the latest sign of the strain facing Britain's hospitality sector as a result of the coronavirus jobs crisis - coming after rival Greene King said it planned to cut 800 jobs and a day after a rescue deal for Gourmet Burger Kitchen which will see 26 restaurants close and 362 roles axed.

Sky's tracker of publicly-announced job cuts during the crisis suggests the sector is fast catching up with aviation and retail as the worst affected, with more than 30,000 now hit.

Marston's, the UK pub group, is set to lay off 2,150 staff after a swath of new restrictions on trading in pubs and bars hit consumer confidence.

Marston's described the regulations, which include mandatory table service, a 10pm curfew and limits on group sizes across the country, as hugely disappointing".

The hospitality industry was hit hard during the first wave of the pandemic and demand was slow to pick up during the summer. The sector is now facing further shutdowns as case numbers rise once again.

8.35am BST

Budget airline Ryanair is also warning of job cuts, as the pandemic hits demand for flights.

There will regrettably be more redundancies at those small number of cabin crew bases, where we have still not secured agreement on working time and pay cuts, which is the only alternative,"

While we deeply regret these winter schedule cuts they have been forced upon us by government mismanagement of EU air travel."

8.23am BST

Britain's hospitality sector has been warning for weeks that there will be heavy job cuts, once the furlough scheme ends in a fortnight.

The boss of trade body UKHospitality told MPs last week that 900,000 staff were still on furlough - and that many more' than half a million risked losing their jobs.

8.17am BST

Business minister Nadhim Zahawi has told LBC he's sorry' to hear about Marston's job cuts:

Asked about the breaking news that UK pub group Marston's is cutting 2,150 jobs, the minister says he knows the chain and he is "sorry about that".

8.16am BST

The latest restrictions on hospitality sector have a direct effect on some Marston's pubs in Scotland and Liverpool, the chain explains:

On 12 October, the UK Government introduced a 3 Tier' system of guidance depending upon rates of infection and perceived risk in different parts of England. Within our estate, we have 21 pubs in Scotland, of which 8 are currently closed, and we have 18 pubs in the highest risk" Liverpool region the majority of which serve food and under the existing guidelines are capable of remaining open.

Throughout the pandemic we have offered continuous help to those tenants and lessees impacted by trading restrictions in the form of rental support and discounting, and we anticipate a continuation of this support in those pubs directly impacted.

8.06am BST

Marston's CEO, Ralph Findlay, says he very much' regrets today's job cuts, but argues they are also inevitable:

On re-opening, we set ourselves three objectives: for pubs to be safe for our guests and our people, to retain pub ambience, and for our pubs to be financially viable. I believe we have met those objectives.

Trading has been difficult, but to operate at 90% of last year on a like-for-like basis is better than our forecast, ahead of the market and a highly creditable result. In part, this is because most of our pubs are in suburban or community settings, and we have relatively few pubs in city centres which have been worst hit by changes in working habits.

7.52am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

More than 2,000 furloughed staff facing losing their jobs at pub chain Marston's, as the Covid-19 economic crisis deepens.

Breaking: More than 2,000 pub-based jobs under review at Marston's

The introduction of these further restrictions and guidance affecting pubs is hugely disappointing in view of a lack of clear evidence tying pubs to the recent increase in infection levels, and our own data which suggests that pubs are effective in minimising risks. Very few incidences of COVID-19 infection have been reported in our pubs by employees or guests to date, supporting our view that socialising in pubs, where social distancing is enforced and hygiene standards are high, presents lower risks than in other non-regulated settings. Unlike many other retail settings, we committed to collecting Test & Trace data from the moment we were able to open.

However, because of the recent additional restrictions, we have reluctantly concluded that around 2,150 pub-based roles currently subject to furlough are going to be impacted.

European Opening Calls:#FTSE 5896 -0.66%#DAX 12914 -0.87%#CAC 4899 -0.87%#AEX 568 -0.72%#MIB 19448 -0.82%#IBEX 6861 -0.80%#OMX 1829 -0.63%#STOXX 3242 -0.94%#IGOpeningCall

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