Loans for 830,000 firms have been signed off but banks can’t keep up with demand for emergency fundsUK banks have approved nearly £35bn worth of government-backed loans for more than 830,000 businesses hit by the Covid-19 crisis, but lenders are still struggling to keep up with demand for emergency funding.Figures released by the Treasury on Tuesday showed that banks granted a further £3.6bn worth of loans to 85,000 businesses in the week to 7 June, with the 100% state-guaranteed bounce-back loans (BBLS) for small firms logging the largest rise.By midnight on 7 June there's been a total of:

Google, M&S and PwC among companies giving three-day remote training experiences

Debt fuelled by pandemic and job losses will stifle nation’s recovery, StepChange claims

Pascal Soriot heroically defended the company against Pfizer, but now he needs to calm his investorsIt’s hard to keep AstraZeneca out of the headlines. A booming share price made the company the biggest in the FTSE 100 index last month, albeit Shell is now marginally in front again. More significantly, the group is in the vanguard of Covid-fighting efforts by helping Oxford University develop a vaccine and then, we hope, produce a successful product in massive volumes.Now, though, comes something different: a Bloomberg report of an approach last month to Gilead of the US to create a new pharma giant. Nobody expects a deal to happen, it should be said. The proposal, if that’s what it was, seems to have been tentative and no talks are in progress now. Continue reading...

National Bureau of Economic Research says economic growth in the US peaked in February and has since entered its first downturn since 2007 to 2009The United States is officially in a recession, ending the longest economic expansion in US history, the committee that calls downturns announced on Monday.The National Bureau of Economic Research (NBER) said that economic growth in the US peaked in February and has since entered its first downturn since 2007 to 2009. Continue reading...

Plan for tough rules on foreign takeovers comes as UK clashes with China on Hong Kong

As many as 90% of the 183 economies are expected to suffer from falling levels of GDP in 2020

CEO tells staff company is responding to economic fallout of the Covid-19 pandemic

Report finds businesses will have £97bn-£107bn worth of unsustainable debt by MarchA City taskforce is warning that up to £36bn worth of government-backed business loans could turn toxic by next year, as companies struggle to repay growing debts during the Covid-19 crisis.An interim report by the Recapitalisation Group, led by EY and lobby group TheCityUK, projects that businesses will be saddled with £97bn-£107bn worth of unsustainable debt by March 2021. A third of that total will come from government-backed loans. Continue reading...

The US stimulus programme looks to have been a success: one that has political as well as economic consequencesThe political obituaries of Donald Trump were all prepared. At the end of a week that has seen American cities convulsed by protests over the killing of George Floyd, the president would be faced with an increase in unemployment worse than anything seen in the Great Depression.Well, it didn’t turn out like that. The US economy actually created 2.5 million jobs in May and the unemployment rate went down rather than up. The consensus among analysts was that it would shed 7.5 million jobs, a colossally wrong call. And a deeply significant one.There’s no getting away from the fact that this was good news for Trump at a time when he appeared to be overwhelmed by a triple-whammy Continue reading...

A new survey reveals they’re opposed to a new bout of austerity to pay for the damage done by the coronavirus crisisThe government is going to borrow a lot this year – probably more £300bn, the highest since the Second World War. Pandemics are expensive, with tax revenues plummeting, health costs surging and government paying 80% of the wages of 8.7 million workers.It’s not surprising that people suspect we’re in for a repeat of the austerity of the 2010s. After all, borrowing will be much higher than during the last financial crisis. Many worry that evil economists, caring only about the public finances, will browbeat politicians into spending cuts. Continue reading...

It will take a concerted effort to avoid huge job losses in the leisure sector – but the government isn’t very good at themTo save your local cafe and beat the virus, dine at well-spaced tables in the street. To watch films on a big screen, take your car to the local drive-in cinema. And to get fit, join an open-air Pilates class.All that is easier done in Greece and Spain than in the UK, but that shouldn’t stop Britons thinking about new ways to enjoy ourselves over the coming years with an ever-present virus. If we don’t, unemployment is going to be as bad as it was in the 1980s, when the Thatcher government “let go” the steel and mining industries without any consideration for people’s livelihoods, scarring large parts of the country for decades. This time the worst-hit sectors will be leisure, travel, tourism, hospitality and retail.Customers may resist a return to normal, feeling that however enjoyable it is to go out and spend, the risk is too high Continue reading...

Germany amazed the whole continent with last week’s stimulus package, but it paves the way for countries such as France to agree an effective coronavirus responseFrom champion of austerity to Europe’s biggest spender – Germany has travelled a long way in just a few months. The notoriously frugal ministry of finance has agreed to spend €130bn – a sum equal to 4% of national income – on more than 50 initiatives to promote growth across the country.This breathtaking investment programme comes on top of the almost 30% of GDP the government has so far spent on rescuing businesses and protecting jobs during the coronavirus crisis.Society is facing a profound upheaval, so we couldn't just offer a traditional stimulus packageThe government has managed to turn a corner just in time and given up on a subsidy for combustion engines Continue reading...

The coronavirus pandemic has devastated the US economy, costing 42 million people to file for unemployment insuranceThe coronavirus pandemic has wrought destruction on US workers at a scale and speed that is almost unfathomable.It was only in February that Donald Trump was touting an unemployment level of 3.5%, a 50-year low. The unemployment rate dropped on Friday to 13.3% – but is still at its highest level since the 1980s – and many economists fear the real figure is far higher. Continue reading...

The labor department’s monthly report indicates unemployment is probably higher than official data and racial disparities remainFriday brought hope that the US economy is finally digging its way out of the rubble after Covid-19 wiped out millions of jobs – with no indication of when they would be coming back. But beneath the surface, deep problems remain.Related: US unemployment hits 40m – in picturesThese #JobsDay numbers highlight the damage of the coronavirus ression—a recession that has caused greater job loss in black households than white households and that will, as a result, exacerbate existing racial inequalities. 10/Here's a simple but important picture of what's happening to jobs. Extremely welcome reversal, of course, if it sticks, but the magnitude of the losses means that even if this uptick pace continues, it would take almost a year just to make up lost ground. pic.twitter.com/kClNyb5kUz Continue reading...

Rolling coverage of the latest financial news, as the US jobs report unveils the impact of the Covid-19 lockdown

Boss of left-leaning thinktank who warned about financial risks of Covid-19 earmarked as OBR boss

As current and former central bankers, we believe the pandemic offers a unique chance to green the global economy

Move will accelerate recovery from coronavirus crisis, says Policy Exchange thinktank

Rolling coverage of business, economics and markets as pharma giant AstraZeneca strikes a deal for its potential Covid-19 vaccine

The single currency bloc is facing the deepest recession in memory and unprecedented job losses

With its €130bn stimulus package, Germany is showing others how to do the recovery

Ministers need to follow up emergency scheme with targeted help, says Ed Miliband

Tax and spending measures are designed to provide country with big economic boost

UK firm to axe almost one-in-five jobs to help save £50m as car sales slump during Covid-19 crisisCar dealership Lookers plans to cut 1,500 jobs and close 12 dealerships as it returns to selling and servicing vehicles after the coronavirus shutdown.The group, which operates 164 car dealerships, says the redundancies are needed to protect the long-term future of the business and it hopes to save £50m a year from the job cuts.Related: UK car sales slump as 2,000 workers lose their jobs in Covid-19 crisis – business live Continue reading...

The US has more to lose from rising economic nationalism than some of its politicians realiseThe post-pandemic world economy seems likely to be a far less globalised economy, with political leaders and publics rejecting openness in a manner unlike anything seen since the tariff wars and competitive devaluations of the 1930s. And the byproduct will be not just slower growth but a significant fall in national incomes for all but perhaps the largest and most diversified economies.In his prescient 2001 book The End of Globalisation, the Princeton economic historian Harold James showed how an earlier era of global economic and financial integration collapsed under the pressures of unexpected events during the Great Depression of the 1930s, culminating in the second world war. Today, the Covid-19 pandemic appears to be accelerating another withdrawal from globalisation.Related: Is China overtaking the US as a financial and economic power? Continue reading...

Value of reserves could fall by two-thirds as Covid-19 hastens peak in demand, study shows

Hammond, Osborne and Darling say urgent measures needed to cushion post Covid-19 job losses

Prince of Wales unveils a five-point plan to stimulate sustainable economic growth

Americans already struggling to afford childcare before the pandemic are now facing a more precarious economyThe coronavirus pandemic has laid bare some of the worst inequities in the US, not least the shortcomings in the US childcare system. Thousands of childcare facilities are at risk of permanently closing and Americans already struggling to afford childcare before the pandemic are now facing a more precarious economy.For Tanesha Borgman, a speech pathologist outside of Denver, Colorado, the pandemic has exacerbated an already difficult situation. Borgman has a three-year-old son with special needs who attended pre-school and had a childcare provider come to their home. Continue reading...

Growth often doesn’t benefit the people who need it – a green economy could create 1 million jobsThe UK lockdown might be easing, but the path ahead for the economy will be long and difficult. Unemployment this quarter is likely to rise twice as fast as it did following the global financial crisis. Almost half of businesses that have taken up one of the government’s bounce-back loans do not expect to be able to pay it back.It’s tempting in a crisis to want to do whatever it takes to get economic activity – measured by GDP – back to where it was before. But an overwhelming and singular focus on increasing GDP would be a mistake. GDP figures do not tell us who is benefitting from growth. GDP does not tell us whether environmental resources – and nature – are being dangerously depleted, and does not reflect the value of caring, much of which is performed by women.The recovery must involve a reconsideration of what is valuable in societyRelated: Britons want quality of life indicators to take priority over economy Continue reading...

Deepest monthly price cuts for 15 years as desperate retailers try to encourage consumer spendingBritish retailers struggling during the coronavirus pandemic have cut their prices by the most in a month since 2006, according to industry figures revealing the scale of the economic fallout.The British Retail Consortium (BRC) and Nielsen said shop prices fell by 2.4% in May following a decline of 1.7% in April as people continued to stay away from the high street during lockdown. Continue reading...

Rolling coverage of the latest economic and financial news, as tensions simmer across the US and Hong Kong

Paying off debt should give people more to spend, but the Covid-19 crisis has raised job concerns

Analysts warn of gap between those hit by job losses and those whose finances benefit from enforced spending halt

Unemployment is soaring to levels unseen since the 1930s Great Depression as Congress debates another $3tn aid packageThe ongoing coronavirus pandemic will haunt the US economy for a decade, wiping close to $8tn off economic growth, according to new projections released by the Congressional Budget Office (CBO) on Monday.In a letter to lawmakers CBO director Phillip Swagel projected the virus will reduce US economic output by 3% through 2030, a loss of $7.9tn. Continue reading...

Firm reports ‘a lot of pent up demand’ but more interest in used vehicles than new ones

IHS Markit says worst of downturn is probably over after fall in factory output slows

Evidence from the rest of the world is encouraging, but the PM may regret acting in haste

Paper concludes EU does not have to offer privileges given to others in previous dealsThe EU has no legal duty to grant the UK privileges offered to other countries in trade deals, an internal European parliament paper has concluded ahead of a crucial round of Brexit talks this week.The document, drawn up by officials for the parliament’s UK coordination group, is a short analysis of arguments made by the UK’s chief negotiator, David Frost, in a letter to his counterpart, Michel Barnier. Frost accused the EU of treating the UK as an “unworthy” negotiating partner by denying the UK “the kind of well-precedented arrangements commonplace in modern FTAs [free trade agreements]”.Related: Brexit: UK's smallest firms divert £10bn in exports away from EU Continue reading...

Heathrow, HSBC and National Grid among 200 CEOs calling for a ‘clean, just recovery’Britain’s most powerful business leaders have called on Boris Johnson to set out economic recovery plans that align with the UK’s climate goals to help rebuild a resilient UK economy in the wake of the coronavirus crisis.Almost 200 chief executives – from companies including HSBC, National Grid, and Heathrow airport – signed a letter to the prime minister calling on the government to “deliver a clean, just recovery”. Continue reading...

Disaster capitalists dream of disassembling nation states for post-viral exploitation

Coronavirus has forced Beijing to pause in its relentless pursuit of GDP. Its people, and the environment, will benefit

Companies are ‘jumping before they are pushed’ as fears mount over collapse in trade talksBritain’s smallest companies are “jumping before they are pushed” by diverting £10bn in exports away from the EU as concerns mount over a possible collapse in Brexit trade talks, according to a report.The research from academics at Aston University, which comes before the latest round of Brexit negotiations this week, showed small British firms were ramping up sales to countries in South America and east Asia. Continue reading...

The party’s dealings with finance have always been tricky. These are the three issues the opposition should keep in mindReports in the Financial Times that Labour’s new shadow City minister wants to “repair bridges” with Britain’s financial services industry read oddly to me. I remember accompanying the then shadow chancellor, John McDonnell, on his “tea offensive” meetings with City figures – with the emphasis on the cups of tea and digestive biscuits, rather than the offence.McDonnell had the great advantage of dramatically low expectations among the bigwigs of high finance, who (as he joked to them) would turn up half-expecting to be sent to a re-education camp by the end of the meeting. They actually left, as far as could be told, pleasantly surprised. But behind the joke, and McDonnell’s personal charm, was a serious attempt to address the issue that any Labour shadow chancellor or chancellor will run up against: what is the party’s relationship to finance? Continue reading...

The chancellor now has the option to raise the minimum wage above inflation, but probably won’t take itNews that Rishi Sunak is planning a summer mini-budget conjures up memories of the 1970s when chancellors were constantly forced to respond to the latest economic crisis.Sunak is finding out what it was like to be Tony Barber or Denis Healey, who ran the treasury from 1970 to 1979. To be sure, that decade seems to be a more relevant reference point than the 16 years between 1992 and 2008 when the economy expanded continuously and inflation was low. That now looks like an aberration rather than the start of a new golden age. Continue reading...

The pandemic has revealed the danger of prizing ‘efficiency’ above all else. The recent slowdown in our lives points to another way of doing things

The guru of Brexit and the 2019 election has been exposed. But the economic and social damage is well and truly doneMy father, who was of Irish extraction but hailed from County Durham, used to say: never kick a man when he is down. After the shambles of Mr Dominic Cummings’s recent excursion to Durham, one might be tempted to make an exception to the rule. But there is no need. The prime minister’s once-valued adviser has been kicking himself – but not in the colloquial sense of expressing regret for his actions.Deeper and deeper he dug himself in, as one terminological inexactitude led to another, and the rule-breaker failed lamentably to justify breaking government lockdown instructions for which he was at least in part responsible.Although economically damaging, the lockdown was socially necessary. Britain was not alone Continue reading...

Rishi Sunak’s choice speaks volumes about his view of Britain’s likely pace of recovery

Firms should be made to disclose exposure to global heating, report suggestsEquity markets have generally ignored the increasing number of natural disasters over the past 50 years and tougher rules are needed to make investors aware of the dangers posed by the climate crisis, the International Monetary Fund has said.Companies should be forced to disclose their exposure to climate risk because a voluntary approach does not go far enough, the IMF said in a chapter from its latest global financial stability report (GFSR). Continue reading...