| Please see below weekly news update provided by Blackfinch earlier this afternoon, which provides a summary of current global events. |
| UK COMMENTARY |
| The UK Government lifted its COVID-19 alert system to its second-highest level following an announcement about a potentially tough autumn and winter period for the country New restrictions were imposed on business activity and movement of people, with PM Johnson confirming that they are ’likely to remain in force for six months’ The main restrictions are: office workers to work from home if they can; all pubs, bar and restaurants to operate a table service and close by 10pm; face coverings to be worn by retail staff, users of taxis and cabs, all staff and customers in indoor hospitality venues except when eating or drinking; COVID-secure guidelines to become legal obligations in all retail, leisure, tourism and ‘other’ sectors; no more than 15 people to attend weddings or wedding receptions; and that the ‘rule of six’ has been extended to all adult indoor team sports The restrictions have more to do with social distancing and health precautions, and the economic impact is unlikely to be as bad as initially thought The Rightmove House Price Index indicated house prices rose 0.2% in September from August and were up 5.0% on September 2019 The Flash UK Manufacturing Purchasing Manager’s Index (PMI) registered 54.3 in September, down from 55.2 in August The Flash UK Services PMI had the weakest performance in three months, coming in at 55.1 in September, down from 58.8 in August The latest data from the Office of National Statistics (ONS) suggests that around three million workers – around 12% of the workforce – were still on furlough or partial furlough in early September Rishi Sunak, Chancellor, acknowledged that he cannot save every job as he announced a new support scheme to enable companies to save viable jobs Under the scheme announced, people can work a third of their normal hours and to be paid the normal hourly rate for those hours, with the Government and the employers covering lost pay. All employers will be allowed to apply for the new arrangements from November, regardless of whether they used the furlough scheme The Government extended the 15% VAT cut for tourism and hospitality sectors to the end of March 2021 UK retail sales volumes grew at the fastest rate since April 2019 in the year to September, according to the Confederation of British Industry’s (CBI’s) Distributive Trades Survey The Bank of England governor has ruled out negative rates in near future National Savings & Investments announced a series of dramatic cuts to its rates and premium bond prizes. The premium bond prize fund interest rate is to be cut from 1.40% to 1.00% from December. Their income bonds will be cut from 1.16% AER to just 0.01% from 24 November. |
| US COMMENTARY |
| Technical changes to data methodology in Arizona and Texas for calculating confirmed cases and a rebound in testing activity helped explain a jump in cases at the start of the week The latest US weekly jobless claims data showed a slight increase for the week ended September 19th, which showed that 870,000 Americans filed for unemployment. This was 4,000 higher than the prior week and in contrast to market expectations of a fall to 850,000. Continuing jobless claims showed some more positive signs, falling to 12.58m from 12.75m but still above estimates of 12.28m Goldman Sachs halved its growth forecasts for US economic growth in Q4 to 3% from 6%. This is in recognition of the fact that Congress is unlikely to attach additional fiscal stimulus to the continuing resolution. Federal Reserve chairman Jerome Powell conveyed yet another downbeat assessment of the US economy to Congress. US lawmakers are yet to push out fiscal changes that central bankers see as needed. US housing sales hit a 14-year high as America’s housing market continues to shrug off the Covid-19 crisis, and high unemployment |
| EUROPE COMMENTARY |
| Indices struggled in Europe due to pandemic fears as there were a record number of cases reported in the Netherlands and France Eurozone business growth ground to a halt as services data stumbled. The Markit’s flash Eurozone Composite PMI was just 50.1, barely above stagnation, from 51.9 in August. This suggests the summer recovery is petering out. Markit’s flash German PMI report showed that service sector activity has hit a three-month low, while manufacturing is growing at the fastest pace in over two years. The jump in Covid-19 cases in France over recent weeks has dragged Markit’s preliminary French PMI down to 48.5 for September, from 51.6 in August |
| ASIA COMMENTARY |
| Shares in Australia were buoyant as the two-week average of new infections in the city of Melbourne fell below 30 The Kospi in South Korea fell 2.61% in afternoon trade after South Korea’s defence ministry said North Korea had killed a missing official from the South earlier this week |
| GLOBAL COMMENTARY |
| With fears riding high of tougher lockdown restrictions returning and the corresponding effect on the economy, the oil price fell heavily |
| COVID-19 COMMENTARY |
| US firm Novavax is set to start late-stage trials for its COVID-19 vaccine candidate in the UK. It will enrol up to 10,000 participants aged 18-84 over the next six weeks, with half receiving the formulation and half receiving a placebo. |
People & Business IFA Limited recognises the importance of communication in the ever-changing world we live in. Please continue to check in with us for the most up-to-date information and data.
Stay safe.
Chloe
28/09/2020