Daniel Casali provides a round-up of key market activity during the week of 11th May.
- The Northern Ireland economy will shrink by 7.5% this year as a result of coronavirus, according to a Danske Bank economist. This is relatively optimistic compared to some other forecasts, such as the Ulster University Economic Policy Centre which forecasted a contraction of up to 10%.
- PM Boris Johnson has set Britain on the first tentative steps to “reopening society” with a three-month road map out of lockdown.
- A report by London Business School assessing the real time data from a wide survey of banks, suggests that household spending dropped more than 40% in April. This would indicate a deeper downturn than BoE had predicted.
- Recapitalisation Group, set up at the request of the Bank of England, has said that small and medium-sized businesses will be stuck with up to £105 billion of unsustainable debt within ten months because of the Coronavirus pandemic.
- According to the ONS, UK gross domestic product fell by 5.8% in March compared with the previous month, the fastest monthly pace on record and the largest drop since the monthly series began in 1997.
- India has announced a 20 trillion rupee ($264bn; £216bn) economic package to help the country handle its coronavirus lockdown measures. The package is equal to roughly 10% of India’s GDP.
- Self-employed workers applied for £340m in merely 4 hours after the UK Treasury’s newest coronavirus bailout program was opened.
- Despite the government allowing the housing market to reopen this week, experts are predicting a 13% fall in UK property as the market struggles.
- A report from the UN has suggested four years of global growth will be cancelled and there is likely to be a 3.2% drop in global growth in 2020 alone. It also suggested that a possible 130m people could be pushed into poverty by 2030.
- Italy approved a €55 billion package designed to bolster liquidity for businesses and help struggling families. It includes up to €4bn worth of tax cuts, extra funding for businesses and emergency income measures. However, Bloomberg Economies have suggested that the package is €65 billion short.
- The fiscal watchdog, the Office for Budget Responsibility has cautioned that the UK’s economic rescue packages will give the country’s public finances a £300 billion hit.
- The ONS have suggested that nearly half of all businesses do not have six months of cash reserves.
- Another 3m American filed for jobless claims this week. The total, since lockdowns began, now stands at 36m.
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By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
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