ECB accelerates bond-buying; UK delays EU import checks; John Lewis store closure warning – as it happened

Graeme Wearden

from on 2021-03-11 17:29 (#5F6MK)

Rolling coverage of the latest economic and financial news

UK delays Brexit import checks as supply disruption loomed.
Firms welcome move in nick of time'
Law firm Gowling: Huge relief to companies
ECB says virus mutations and lockdown hurting recovery
ECB to accelerate pace of its bond buying to help recovery
John Lewis to close more stores after 517m loss

5.28pm GMT

Time for a recap:

The rebound in global demand and additional fiscal measures are supporting global and euro area activity. But persistently high rates of coronavirus infection, the spread of virus mutations and the associated extension and tightening of containment measures are weighing on euro area economic activity in the short-term."

While the overall economic situation is expected to improve over 2021, there remains uncertainty surrounding the near-term economic outlook, relating in particular to the dynamics of the pandemic and the speed of vaccination campaigns."

Checks were due to be introduced on 1 April and 1 July, but in recent days traders and ports have warned they were not ready, adding that the introduction of processes as originally planned could lead to empty supermarket shelves.

Michael Gove, who runs the Cabinet Office, told the House of Commons on Thursday that government had responded to businesses' requests for more time and announced what he called a revised timetable".

It's been a real economic earthquake. We've seen decades worth of change in the space of one year. Shopping habits have changed irreversibly."

5.08pm GMT

Back in New York, the S&P 500 has also hit a new alltime high.

Reuters explains:

Mega-cap stocks Apple, Microsoft, Facebook and Tesla gained between 2.2% and 3.6%, recouping losses from a recent pullback and helping the benchmark S&P 500 surpass its Feb. 16 peak of 3,950.43.

Intraday all-time highs for the Dow and S&P 500. Nasdaq still about 5% from its peak.

4.54pm GMT

European stock markets have closed at a new one-year high tonight, as the ECB's decision to pump up its bond-buying programme cheers investors.

The Stoxx 600 index gained nearly 0.5% after the European Central Bank stepped up its efforts to rein in rising European bond yields at its monetary policy meeting today.

European Closing Bell

FTSE 100 +0.10% at 6,731
STOXX 50 +0.70% at 3,845
DAX +0.20% at 14,575
CAC 40 +0.70% at 6,030
IBEX 35 +0.60% at 8,577
MIB +0.90% at 24,132
SMI -0.20% at 10,886

Unlike their counterparts at the Federal Reserve, ECB members have grown increasingly vocal of late in their concern for the recent increase in bond yields."

In her statement, President Lagarde struck a modestly dovish tone. She noted that persistently high virus numbers and lockdowns would weigh on growth in the short-term and that incoming data pointed to continued economic weakness in Q1. The bloc is now firmly on course to enter into a double-dip' recession in the first quarter, having contracted in Q4 2020.

4.50pm GMT

In London, the FTSE 100 had a quiet day, closing 11 points higher at 6736.

Gambling firm Flutter was the top riser, jumping 5.5%, with mining company Anglo American up 4.6% and airline group IAG gaining 3%.

4.31pm GMT

Here's Jack Dromey MP, Labour's Shadow Cabinet Office Minister, on the UK's decision to postpone checks on EU imports:

This chopping and changing of rules by the Government smacks of ill-preparedness and incompetence.

They have had years to prepare for this but can't stop missing their own deadlines. It is no wonder that the Trade Secretary herself has warned of chaos.

4.19pm GMT

The frenzy of stock market trading linked to meme stocks" such as GameStop has helped the investing website IG Group attract a record number of traders.

IG, a member of the FTSE 250 index, said it made revenues of 230m in the three months to 28 February, 65% higher than the same period last year.

3.35pm GMT

Back in the US, the number of Americans filing new jobless claims has fallen to a four-month low.

There were 712,000 new unemployment claims filed last week, on a seasonally-adjusted basis. That's the lowest since November, and almost the lowest since the pandemic began.

#US #Jobless claims lowest since Nov 6th, 2020 week. pic.twitter.com/osBAJYUbsK

20 million Americans are on unemployment aid a year into this terrible crisis.

The latest @BLS_gov data indicate 1.2 million applied for help last week (UI + PUA).

There's still a lot of pain. The US has had ~20 million people on unemployment aid since Halloween. pic.twitter.com/S0Bk9AjZQP

US initial jobless claims for last week totaled 712K, still nearly 4 times pre-COVID levels. Individuals getting unemployment assistance from governments has surged over 20 million again. Source: Bloomberg pic.twitter.com/WI7G2PqVoU

3.19pm GMT

Over in parliament, chancellor Rishi Sunak is being questioned by MPs on the Treasury committee - and defending the spending plans outlined in last week's budget:

Our Politics Live blog has more details:

3.15pm GMT

Chris Hunt, partner at law firm Gowling WLG, also says the UK is right to delay border inspections and customs declarations on EU goods for longer (details here).

Exactly one year on from WHO announcing a global pandemic, this will be a huge relief for UK businesses at a time when the pressure to perform, as well as the barriers that the last year has thrown up, have collectively placed some in a near unsustainable position.

Consolidation, closures and redundancies have been inevitable but the resourcefulness and innovative force of UK business in strengthening supply chain links and quickening its response to distinctive behavioural changes and desires, signifies more opportunity ahead than many would have predicted."

3.00pm GMT

Back in the markets, the US Dow Jones industrial average has hit a new all-time high in early trading.

The Dow is up 159 points, or 0.5%, at 32,456 points, extending its recent rally.

BREAKING: Stocks open higher, Dow rises to new record high. pic.twitter.com/g1GDxnUDYc

2.39pm GMT

Some British businesses are heaving a sigh of relief that checks on goods coming into the UK from the EU are now being delayed.

Andrew Opie, Director of Food & Sustainability at the British Retail Consortium, said the move came in the nick of time'

We are pleased that the Government has listened to us and postponed border checks until the systems and border posts are ready. With many of the key Border Control Posts currently little more than a hole in the ground, the six month easement comes in the nick of time.

Until the infrastructure is in place, with IT systems ready and established processes for checks and paperwork, it would be foolhardy to introduce full requirements for EHC documentation, pre-notification of imports, physical checks and more. We welcome the Government's decision, which will ultimately reduce the impact on consumers from the 1^st April, who might otherwise have seen empty shelves for some products.

This is a positive step as it recognises what everyone in business has known for weeks now: UK-EU trade has faced, and continues to face, significant disruption and difficulty.

Ministers are right to delay the implementation of import checks that would slow trade even further - but this can only be a temporary solution.

2.26pm GMT

Cabinet Office minister Michael Gove has confirmed that the UK is delaying imposing post-Brexit checks on imports from the EU.

Gove says that the government has listened to businesses:

We know now that the disruption caused by COVID has lasted longer and has been deeper than we anticipated. Accordingly, the Government has reviewed these timeframes.

Although we recognise that many in the border industry and many businesses have been investing time and energy to be ready on time, and indeed we in Government were confident of being ready on time, we have listened to businesses who have made a strong case that they need more time to prepare.

This will come as a huge relief to importing businesses... however some exporting businesses and hauliers were under the impression the threat of reciprocal checks would be used as leverage to get the EU to ease its checks. Won't happen now until next year.

As anticipated, the UK govt is pushing back by six months the dates at which EU exporters will face full UK border controls. tl;dr relief for supermarkets, less so if you've spent money preparing or are competing against EU exports (like pig farmers). https://t.co/JmX15clqxW pic.twitter.com/Fj1AWvZvlx

2.13pm GMT

This story, from Monday's Guardian, explains why the UK is delaying post-Brexit customs checks on imported goods from the EU:

It's obvious not all of the facilities are going to be ready; how much of it will be is still up for debate," said Richard Ballantyne, chief executive of the trade body British Ports Association (BPA). Our frustration with government is they are not willing to share what the plan B is."

With less than four months to go, construction has only just begun at ports including Portsmouth, Purfleet on Thames in Essex, and Killingholme on the Humber.

2.02pm GMT

Breaking away from the European Central Bank, the UK is going to delay the introduction of customs & sanitary (SPS) import checks on EU goods at the border for six months, to 1st January 2022.

My colleague Joanna Partridge has the details:

I understand the Cabinet Office is due to announce shortly that the introduction of customs & sanitary (SPS) import checks at the border is being pushed back by 6 months to 1 Jan 2022 as border infrastructure won't be ready on time - as we reported here https://t.co/wVD8bp0tyW

The British Ports Association which had told me that some of the border control posts would not be ready on time have welcomed the extension @richard_bpa

1.54pm GMT

The ECB has raised its inflation forecasts for this year, and 2022.

President Christine @Lagarde introduces the baseline GDP and inflation outlook for the euro area. pic.twitter.com/qEp2M6ExT6

#ECB SEES 2021 INFLATION AT 1.5% VS. 1.0% - BBG
*ECB SEES 2022 INFLATION AT 1.2% VS. 1.1%
*ECB SEES 2023 INFLATION AT 1.4% VS. 1.4%

*LAGARDE: HEADLINE INFLATION LIKELY TO INCREASE IN COMING MONTHS
*LAGARDE: SUPPLY CHAIN PRESSURES TO BOOST UNDERLYING PRICES

1.52pm GMT

Lagarde warns that eurozone GDP is likely to contract again in the current quarter due to the ongoing pandemic and national lockdowns.

She says:

Incoming economic data... point to continued economic weakness in the first quarter of 2021, driven by the persistence of the pandemic and the associated containment measures.

As a result, real GDP is likely to contract again in the first quarter of the year."

Lagarde: ECB sees 2021 GDP growth at 4% vs 3.9%
2022 GDP at 4.1% vs 4.2% and 2023 GDP unchanged at 2.1%

1.43pm GMT

Onto the recent rise in government bond yields, where Christine Lagarde warns that rising market rates post a risk to wider financing conditions.

They could lead to a premature tightening of financial conditions.

1.41pm GMT

On inflation, Christine Lagarde says underlying pressures remain subdued, with the overall inflation outlook broadly unchanged.

1.38pm GMT

European Central Bank president Christine Lagarde is holding a press conference now to explain today's decisions.

Lagarde says the overall economic situation is expected to improve over 2021.

1.32pm GMT

Here's Vuk Magdelinic, CEO of AI quantitative analytics provider Overbond, on the ECB's move:

Lagarde has certainly learned her lesson from a year ago. Looking ahead, it's clear that rising government bond yields are seen as a threat to a still-weak European economy, with the steps outlined today clearly designed to keep yields down and provide assurance. While longer dated yields have been leading the curve higher and steeper, the hope for now is that European yields across all tenors will see some semblance of stability, as has been apparent thus far this week in the US.

Looking at Overbond's COBI-pricing data for credit markets in the region, spreads in all but the BB sector appear reasonably well-behaved, with 10 year BB spreads increasing by 27 bps compared to 4bps for BBB and 3bps for A and AA. Corporate yields currently more or less match the increase in benchmark government yields for the region, and with the economy facing an uncertain outlook, the ECB's stance on government bonds should keep a lid on major yield moves in credit markets."

1.29pm GMT

Eurozone bond yields have tumbled after the ECB said it would accelerate the pace of its bond buying pandemic stimulus over the next three months.

Reuters has the details:

Germany's 10-year yield, the benchmark for the region, extended its fall and was down 4 basis points at 12:55 GMT to its lowest in over a week at -0.36%.

Benchmark 10-year yields in Italy -- among the biggest beneficiaries of ECB bond purchases -- fell 7 basis points to 0.62%, the lowest in over two weeks.

10y Italian bond yields -10bps
10y Germany bond yields -5bps

Question is why didn't ECB just *actually* buy more via PEPP instead of waiting to add a line in today's statement?

1.14pm GMT

The ECB is speeding up its bond-buying stimulus programme because the eurozone isn't recovering as fast as other regions, says Neil Birrell, chief investment officer at Premier Miton.

The ECB left rates unchanged as expected, confirmed the size of the asset purchasing programme and says it will speed up some elements of it. Europe is not bouncing back as fast as other regions and the ECB remains in place to provide the support that is required.

At first glance this looks more dovish than markets were expecting, which reflects the backdrop."

The big question for the ECB heading into today's meeting is whether the Governing Council was going to rally behind a common message in relation to the recent rise in euro-area yields.

That question has been answered with the ECB coming straight out of the block with the announcement that PEPP purchases will be significantly" ramped up in the coming quarter."

Markets welcome #ECB decision to frontload PEPP purchases but decline of yields is small after move seen in recent weeks

NEW from #ECB: "Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council expects purchases under the PEPP over the next quarter to be conducted at a significantly higher pace than during the first months of this year"

Market reaction to #ECB saying #PEPP buying will rise over next quarter:

- Bank sell-off accelerates
- Euro briefly dips
- Italian 10yr BTP yield drops to 0.61% from 0.66% before decision

1.04pm GMT

European government bond yields are falling, after the ECB announced it will speed up its bond purchases:

German 10y Bund yields plunge as ECB upping pace of PEPP purchases. pic.twitter.com/TD4WMIslVS

ECB reiterates rates at present or lower levels until inflation near goal. Suggests the hikes priced in over 3Y horizon looks wrong. Also upping pace of PEPP purchases. This is a lot more dovish markets were expecting $EUR pic.twitter.com/gC3A3paYCH

12.55pm GMT

Over in Frankfurt, the European Central Bank has pledged to speed up its emergency bond purchasing programme.

That follows recent increases in eurozone government bond yields, which raises concerns that rising borrowing costs could hurt the eurozone recovery.

First, the Governing Council will continue to conduct net asset purchases under the pandemic emergency purchase programme (PEPP) with a total envelope of 1,850 billion until at least the end of March 2022 and, in any case, until it judges that the coronavirus crisis phase is over.

Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council expects purchases under the PEPP over the next quarter to be conducted at a significantly higher pace than during the first months of this year.

BREAKING! #ECB keeps rates unchanged, leaves #PEPP envelope at EUR 1.85 trillion, but states:

'PEPP purchase over next quarter significantly faster'

ECB already moving to stem rise in bond #yields. pic.twitter.com/u3np41QJsP

Press release: Monetary policy decisions https://t.co/L0YE1fBgrK

12.55pm GMT

Over in Frankfurt, the European Central Bank has pledged to speed up its emergency bond purchasing programme.

That follows recent increases in eurozone government bond yields, which raises concerns that rising borrowing costs could hurt the eurozone recovery.

Press release: Monetary policy decisions https://t.co/L0YE1fBgrK

12.08pm GMT

John Lewis is likely to significantly restructure its physical operations, and expand its online offering, predicts Simon Geale, senior vice president for client solutions at retail consultancy Proxima.

John Lewis results today come as no surprise sadly, and they reveal the deep damage that COVID has wreaked across the UK retail sector. The sharp drop in profits at John Lewis comes against the backdrop of a rapid rise in online retail which has led the company to move swiftly to close stores and implement sweeping redundancies. The silver lining amidst this lies in a hopeful bump as shoppers are welcomed back in April, but the impact of lockdowns on the bottom line are expected to linger for many months to come.

We expect to see major expansion in John Lewis's online offering over the next year, and this will mean significant restructuring of its physical operation and supply chains are yet to come. Retailers like John Lewis should now be looking closely at their supplier base as a source of cost-saving and a means of reshaping their offering for this new reality."

11.53am GMT

John Lewis has also told reporters that its staff, or partners, are unlikely to get a bonus next year either, my colleague Sarah Butler flags up:

John Lewis Partnership admits it is unlikely to pay a staff bonus again next year as it expects its financial situation to worsen. However it says hard to forecast with accuracy because of volatile environment..

Britain's John Lewis Partnership will not re-open a small number" of department stores when the COVID-19 lockdown ends in areas where it considers there are not enough customers, its department stores head said on Thursday.

The stores that we find we will probably need to exit are places where our customers aren't," John Lewis executive director Pippa Wicks told reporters.

11.49am GMT

John Lewis chairman Sharon White has told the BBC that the company is adapting fast" to the changes in retail during the pandemic.

This has been the biggest economic shock, the biggest public health emergency, that any of us have lived through.

You've had a decade worth of changes in shopping habits in a year"

"You've had a decade worth of changes in shopping habits in a year"

John Lewis chairman Sharon White says no decisions have been taken on what stores will close but adds "we're adapting fast to how our customers want to shop with us"
https://t.co/1QyAzOk6EK pic.twitter.com/DKPzemuXxb

11.45am GMT

Here's more reaction to John Lewis's troubles, from ITV's Joel Hills:

John Lewis lost 517m last year and says the bonus won't be back until profits reach 150m+. That may be several years away. The 55,000 partners who work for Waitrose have reason to feel irked, given that it is the department store chain that is having all the problems. pic.twitter.com/380OuMTBEi

Sharon White inherited a challenging task turning around John Lewis even before the pandemic with profits declining for the past three year pic.twitter.com/jk1YW7pOyY

11.35am GMT

British American Tobacco has announced a 126m collaboration with Canadian cannabis producer Organigram, as part of its push to expand its portfolio beyond nicotine'.

Under the agreement, a BAT subsidiary is taking a 19.9% stake in Organigram, which produces high-quality medical and recreational cannabis.

Cannabis catalyst.

Organigram Holdings Inc's U.S.-listed shares soared 47% in premarket trade Thursday, after the Canadian cannabis company said it has received a C$221 million ($176.6 million) investment from a unit of British American Tobacco PLC." $OGI

11.07am GMT

In other retail news, Morrisons' profits for 2020 slumped by half, which the supermarket's chief executive described as a badge of honour.

I personally wear the halving of profits as a badge of honour.

It's one thing being asked to keep indoors for most of the year, it is quite another if you haven't got access to food.

10.57am GMT

Royal Dutch Shell cut the pay of its chief executive by 42% in 2020, as the oil company's profits slumped because of the coronavirus pandemic.

10.44am GMT

UK consumer spending picked up at the start of the month, even though millions of workers are still furloughed due to the pandemic.

New data from the Office for National Statistics shows that spending based on debit and credit card purchases handled by the UK's Clearing House Automated Payment System (CHAPS) jumped by 10 percentage points in the week to 4th March.

61% of the workforce in the arts, entertainment and recreation industry were on furlough between 8 to 21 Feb - the highest proportion of all industries.

Followed by accommodation and food service activities at 50% https://t.co/blthHy3dIa pic.twitter.com/gyQm8AZBmH

10.15am GMT

The oil price has also pushed higher today, with Brent crude up 1.5% at $68.98 per barrel (approaching last week's 14-month high above $71/b).

In the broader market, serenity prevailed on Wednesday as a subdued US inflation print and a solid 10-year Treasury auction calmed global bond yields, propelling the Dow Jones to a new record high. Rising yields are generally negative for stock markets, so when yields stabilize or pull back like yesterday, equities breathe a sigh of relief.

Adding fuel to the cheerful mood was news that Congress gave final approval to the colossal $1.9 trillion spending bill and that President Biden will now turn his attention to an infrastructure investment package, which might be in the ballpark of $2.5 trillion. Make no mistake, this level of government support is unprecedented. It makes the New Deal look almost like child's play in percentage of GDP terms.

10.11am GMT

Back in the markets, global stocks have hit a one-week high today as investors shake off their worries about inflation.

MSCI's All Country World Index has gained 0.5%, as gains in Asia added to the Dow's record close last night. China's CSI 300 index has now closed 2.5% higher, with Hong Kong's Hang Seng up 1.6% and South Korea's Kospi gaining 1.9%.

9.47am GMT

WPP, the world's largest advertising group, reported a 2.8bn pre-tax loss last year as the pandemic hit its business and triggered a multi-billion write down in the value of some of its ad agencies.

While revenue was significantly impacted as clients reduced spending, our performance exceeded our own expectations and those of the market throughout the year. While uncertainties remain around the impact of the vaccine roll-out and economic growth, we continue to expect 2021 to be a year of solid recovery."

9.44am GMT

Lucy Powell MP, Labour's Shadow Minister for Business and Consumers, says the news John Lewis could close more stores shows that high street retailers need more help:

This news is really worrying for John Lewis employees and is yet another blow for our struggling high streets.

The pandemic has accelerated changes to the way we shop, but the Government continuing to disadvantage bricks and mortar shops over online companies is cranking up the pressure and leading to businesses collapsing that may otherwise have had a bright future as our country recovers.

9.28am GMT

Here's our news story on Rolls-Royce's 2020 loss:

Rolls-Royce has reported a loss of 4bn for 2020 as the jet-engine manufacturer's business was shaken by the coronavirus pandemic.

The FTSE 100 manufacturer revealed it burned through 4.2bn in cash during the year as revenues from servicing passenger aircraft collapsed. It expects to burn through a further 2bn this year...

9.18am GMT

John Lewis Partnership has warned it is not out of the crisis" in the retail sector caused by the Covid-19 pandemic and will not be reopening some stores when lockdown ends, after slumping to a 517m loss for 2020.

The group, which also owns Waitrose, confirmed it would not be paying a bonus to staff for the first time in 67 years.

John Lewis may not reopen some stores as group slumps to 517m loss https://t.co/umMdcpjLze

Hard as it is, there is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store.

We are not out of the crisis yet and the economic environment remains extremely uncertain."

9.15am GMT

In happier times, John Lewis's annual results would include a bonus for partners - typically worth many weeks of extra pay.

But there's no staff bonus this year for the first time in over six decades, as expected, given the 517m loss suffered last year.

We wish we were in a position to pay a bonus and it has been a very difficult decision not to. The Partnership Board believed that to do so would have held back our ability to protect the business in very difficult times and to lay the foundations to return to sustainable profit.

We are committed to restarting bonus as soon as our profits (before exceptionals) reach 150m on a sustainable basis and our debt ratio is below 4 times, and to paying the voluntary real living wage when profits rise to 200m.

9.04am GMT

John Lewis has also defended its decision to keep business rates relief - saying the move has helped protect jobs.

It explains that it has received 190m of support from the government - in business rates relief and furlough support (the latter claimed only to July 2020, it says).

Government funding has been used for the purpose it was designed for - to protect the business - and was critical to cover the direct operational costs relating to Covid and the substantial hit to trading operating profit. The business rates relief has helped to keep us running and avoid more severe restructuring of the Partnership, which would have put more jobs at risk at a time when the high street is already under pressure. We are not out of the crisis yet and the economic environment remains extremely uncertain.

Therefore, our current intention is to accept the business rates relief made available from April to June, but we will keep this under review.

8.47am GMT

Waitrose grew its trading operating profits by 82m last year, to 1.145bn, as it benefited from the surge of grocery sales in the lockdowns.

However, that was more than wiped out by the closure of the John Lewis Partnership's department stores, where trading operating profits fell by 180m to 554m.

Trading operating profit was significantly challenged as the improvement seen in Waitrose, in part helped by the closure of the hospitality industry, was insufficient to cover the substantial decline in John Lewis as non-essential" physical retailing closed temporarily.

8.23am GMT

John Lewis says it is taking very difficult decisions", pointing out that it has already closed some of its department stores and Waitrose grocery shops.

We entered this year with our financial performance already challenged - profits and Partner bonus having fallen for the past three years. We are having to take very difficult decisions to return the business to a path of sufficient profit of 400m by 2025/26.

Last year we closed eight John Lewis stores and seven Waitrose stores that were loss making, and we are in the process of reducing the cost of our head office by 20%.

We have seen limited impact from Brexit so far operationally owing to our advance preparations and the Brexit trade deal. The one area of the business that is temporarily disrupted is deliveries to Northern Ireland and we expect to resume these before the summer.

8.08am GMT

Just in: UK high street retailer John Lewis has warned that some of its shops are not expected to reopen when the lockdown ends.

In its latest financial results, just released, chair Sharon White says that the group is in discussions' with landlords, and a final decision will be taken by the end of this month.

Hard as it is, there is no getting away from the fact that some areas can no longer profitably sustain a John Lewis store. Regrettably, we do not expect to reopen all our John Lewis shops at the end of lockdown, which will also have implications for our supply chain. We are currently in discussions with landlords and final decisions are expected by the end of March.

Closing a store is one of the hardest decisions we can make as a Partnership. We are acutely sensitive to the impact on our Partners, customers and communities, particularly at a time when retail and our high streets are undergoing major structural change. We will do everything we can to lessen the impact and will continue to provide community funds to support local areas.

#Breaking Retail giant John Lewis Partnership has warned over further store closures as it reported pre-tax losses of 517 million for the year to January 30 pic.twitter.com/NrXiTn2bc9

In a difficult year, the Partnership recorded a Loss before tax of (517)m, compared to a Profit before tax of 146m in the previous year. This is the result of substantial exceptional costs of (648)m, mainly the write down in the value of John Lewis shops owing to the pronounced shift to online, as well as restructuring and redundancy costs from store closures and changes to our head office.

John Lewis shops are now held on our balance sheet at almost half the value they were before this year's and last year's write downs. Before the pandemic we judged that 6 in every 10 spent online with John Lewis was driven by our shops. The ratio has fallen to 3 in every 10.

7.57am GMT

UK aerospace engineer Rolls-Royce has posted a deep loss for 2020, as the pandemic hit the airline industry hard.

In total we expect the restructuring to lead to the reduction of at least 9,000 roles by the end of 2022, most of which are in Civil Aerospace. By the end of the year, approximately 7,000 permanent and contractor roles had been removed with a significant proportion achieved through voluntary severance and natural attrition.

We have made a good start on our programme of disposals and will continue with this in 2021.

We continue to invest in developing market-leading technology and low carbon opportunities in all our end markets, to create value for our stakeholders and ensure we are well positioned to take advantage of the transition to a lower carbon economy and growing demand for more sustainable power solutions."

Rolls-Royce plunges to worse than expected $5.6 billion loss https://t.co/7Aqh7U4K7Y pic.twitter.com/TBfbN6EjwX

7.17am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Global stocks markets continue to push higher, after the US House of Representatives passed Joe Biden's landmark $1.9trn stimulus package.

The bill, which should be signed tomorrow, aims to stimulate its recovery and lift millions of Americans out of poverty. It could also give the global economy a significant boost.

The direct payments of $1400 to a majority of Americans will be sent out within days of the President's signature, while the $300/week supplemental unemployment benefits will now be extended to September with no lapse.

Treasury Secretary Yellen was out selling the package, anticipating that the legislation could allow the labour market to recover to full employment by the end of 2022.

Several hours after the end of European trading, it was announced that Congress backed the $1.9 trillion stimulus plan so it will be passed over to President Biden to sign off. The Dow Jones hit another record high, it closed above 32,000, following the announcement of the relief package.

The bullish sentiment from the US pushed up equity markets in the Far East, in addition to that, European stocks are poised for a positive start.

European Opening Calls:#FTSE 6745 +0.29%#DAX 14585 +0.31%#CAC 6011 +0.34%#AEX 682 +0.52%#MIB 24047 +0.51%#IBEX 8547 +0.26%#OMX 2143 +0.41%#STOXX 3832 +0.32%#IGOpeningCall

U,S Government/Janet Yellen/Jay Powell throw kitchen sink at US economic recovery using consumer power as its weapon. Markets seem to approve. Asia cautiously optimistic - Suggested opening calls FTSE +17 at 6742, DAX +33 at 14573, CAC40 +13 at 6003, DJIA +131 at 32428 at 6.45am

Today's most important event is the European Central Bank's meeting and its decision on monetary policy. No drama is expected as the ECB isn't anticipated to change its monetary policy's sailing path. It is highly likely that we may hear the echo of the same message that we had in the RBA and BOC's monetary policy meetings, and that is: the ECB is likely to play down any qualms around inflation.

The message is likely to say that any surge in inflation is most likely to be temporary, and market players should not expect any change in the monetary policy.

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