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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