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Sunak faces MPs over economic impact of Covid-19 – live updates

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04:26 PM

Ellesmere Port starting production on August 17

Vauxhall’s plant at Ellesmere Port will restart production of the Astra car on August 17, having closed down on March 17 because of the pandemic, my colleague Alan Tovey writes.

Parent company PSA Groupe announced the “gradual restart” which is being “driven by commercial activity”, easing fears about the plant’s future which employs about 1,000 people.

More than 100 protocols have been put in place to protect staff. Vauxhall’s other UK factory, the Luton plant which makes vans, has seen such demand that it went to a third shift and drafted in workers form Ellesmere to help meet demand. 


04:14 PM

McCarthy and Stone swings to half-year loss

McCarthy and Stone

Via PA: Retirement home developer McCarthy & Stone has said it swung to a loss in the first half of the year following the impact of the coronavirus pandemic.

The company closed its construction sites and sales offices from mid-March before starting to reopen them last month. It said it tumbled to an underlying pre-tax loss of £26.9 million for the six months to April 30 as a result, falling from a £18.9 million profit for the same period last year.

McCarthy & Stone said it completed sales or rental deals on 471 homes in the six-month period, down from 845 in the first half of 2019.


03:52 PM

Europe closes higher

Stocks soared higher today on the back of optimism in relation to the possibility of a Covid-19 vaccine being developed. 

The FTSE 100 ended 1.83pc higher at 6,292.65 while the FTSE 250 closed 1.43pc up at 17,420.55.

David Madden of CMC Markets said: "AstraZeneca are working with the University of Oxford on a possible vaccine. In addition to that,  Moderna’s potential vaccine has shown encouraging results too.

The bullish sentiment has rippled out across Europe, as the FTSE 100 traded above 6,300, the CAC 40 hit its highest level since late March and the DAX 30 reached a mark last seen in late February.

It is early days yet in regards to the development of a potential vaccine, but many traders are keen to buy into the market.In London, it is a broad based rally as banks, mining, oil and airline stocks are higher, while the supermarket sector and the hospitality industry are mixed.


03:43 PM

Firms to be able to sue wrongdoers involved in company collapse

Business owners whose companies have collapsed are set to be able to directly sue wrongdoers involved in the collapse, following a Supreme Court ruling, my colleague Rachel Millard writes.

For decades the rule against reflective loss has prevented shareholders from making an individual claim outside of the formal insolvency process. 

But in a key case, Supreme Court judges including Lady Hale found that the rule does not apply to claims made by creditors or guarantors. 

That paves the way for business owners who provided loans and personal guarantees to the company to make a claim. 

The ruling was made following an appeal brought by Marex Financial, which had been prevented from recovering debts from a business owner under the reflexive loss rule. 

The All Party Parliamentary Group on Fair Business Banking had intervened in the case to argue for greater powers for business owners. It had raised the example of businesses harmed by RBS disgraced GRG unit. 

Toby Starr, partner at City law firm Humphries Kerstetter, said the case was a “significant step forward,” adding: "The detail of this judgment will lead to a review of many lower court decisions and will enable creditors who have lost out to consider bringing claims at the High Court.”


03:35 PM

Final comments

The Treasury Committee has now ended but the Chancellor concluded by covering some the following points:

  • It is too early to tell the strength of recivery from Covid - it varies a lot around the world.
  • We need to rebuild people's confidence in going out.
  • Fundamentally we don’t tax our way to prosperity but we want a conversation in the round to confront tough choices about how services are funded.

03:26 PM

Childcare support for women

Mr Sunak has been challenged by Labour MP Siobhain McDonagh on childcare support for female workers.

"We are 51pc of the population, we are more likely to lose our jobs, and to not do the hours we normally do." she says.

The Chancellor has said that the ‘eat out to help out’ scheme will benefit women, as they are disproportionately affected by the crisis in hospitality, as well as young people and ethnic minorities.


03:17 PM

Sunak on interest rates

The Chancellor has said "we cannot be sure interest rates will always be this low".


03:09 PM

Rising debt levels among UK companies

Julie Marson, Conservative MP, has challenged the Chancellor about rising debt levels among UK firms.

She asked: "Are you comfortable with the idea of bailouts, and picking winners?"

Rishi Sunak replied that he was not. He said: "It’s not something I think the government should get into the habit of. It’s not my money, it’s the taxpayer’s money."

He added that there should be a very high bar for equity bailouts of struggling companies and said that the government remains there as the "last resort" for firms.

Any bailout would need to be of strategic importance and investors need to share in the burden so they don't get a "free ride on the taxpayer."


03:02 PM

Handover

The Treasury Select Committee hearing is slightly in the weeds at the moment – MPs are mainly talking about review processes. It’s time for me to hand over to my colleague LaToya Harding, who will steer the blog into the evening. Thanks for following along today!


02:56 PM

Market moves

Let’s quickly check in on equities. European stock markets are still performing strongly today, with the S&P 500 also rising slightly at the open today. Vaccine hopes have been the big mood-driver today, and most of London’s blue-chips have gained ground. 


02:52 PM

Sunak: Bailouts are a last resort

The Chancellor is asked about the Government’s ‘Project Birch’, the reported scheme under which it would bailout key companies. Naturally he’s cagey, saying the Government can be a “lender of last resort” but saying the schemes already in place are designed to avoid such an outcome.


02:42 PM

More questions on job retention bonus

Labour’s Rushanara Ali presses the Chancellor further on the job retention bonus – repeating the criticism that the scheme fails to support smaller businesses, and will end up funnelling more money to already-rich companies.

Mr Sunak again defends the scheme – he points to the example of a small business that brings five workers off furlough, saying getting £5,000 in that situation would be a big help.

He says he believes the scheme will have a “very positive impact”.

Ms Ali asks whether Mr Sunak thinks he actions will be enough to stop a surge in unemployment (which the Office for Budget responsibility yesterday predicted could rise to 9pc). She asks whether he should gave gone for something “much more ambitious and bold” at this stage.

Mr Sunak says he is particularly worried about young people losing their jobs, saying job losses among young people can create long-term scarring. He’s unable to answer the rest of the question because Mel Stride moves on to the next questioner.


02:24 PM

No changes necessary?

Conservative Steve Baker asks whether the Chancellor is drawing a line in the sand and saying that there will be no further changes to the Government’s main schemes.

As the Chancellor assents, Mr Baker expresses regret and says he expects a backlash.


02:17 PM

Apology to self-employed people

The SNP’s Alison Thewliss now. She asks whether the Chancellor can honestly say he has done the most he can to support the incomes self-employed people.

Mr Sunak says the Treasury took the decision it did to act as quickly and forcefully as possible, but says he is sorry to people who feel they have been left out. 

Ms Thewliss says that isn’t good enough, and refers to some people who she says have not received support “at all”.

Mr Sunak says he can’t comment specifically without knowing the details of each individual case, but points to the wide range of support available. He says there’s no way he can make sure that every single person gets support.

He says the Government’s action have helped people “on aggregate”.


02:10 PM

Sunak: Timeframe of VAT cut makes sense

Conservative Felicity Buchan is asking the Chancellor about some specific tax measures. She asks why the Government has timed its VAT cut for the hospitality and tourism sectors so early – she asks if it would have made sense to introduce it towards autumn, when the sectors might be bouncing back more as people begin heading out again.

Mr Sunak says a lot of companies are reopening now, and says the receiving the boost now will be beneficial. He points out that other countries which have introduced VAt cuts have set out a similar timeframe for the reductions to taper off.

He says the review of capital gains tax currently being undertaken is “business as usual practice” for the Treasury.


02:07 PM

Restaurant voucher scheme ‘will help women’

The Chancellor is also pressed on a lack of focus on childcare in last week’s mini-Budget. Nurseries have received a 12-month rates holiday, but the Government had been criticised for a lack of further steps.

Sidestepping the question, the Chancellor points towards the ‘eat out to help out’ meal voucher scheme, which he says will benefit women (who are disproportionately represented in the hospitality sector).


02:01 PM

Sunak: We were moving quickly to get PPE

Asked about several egregious example of tiny companies being cleared for substantial contracts to supply personal protective equipment, Rishi Sunak says the contracts need to be discussed with the departments that awarded them.

He notes that the Government was working quickly to secure PPE when Covid-19 was beginning to land in the UK. It’s a dodge by the Chancellor, and Ms Eagle says she looks forward to questioning the departments directly.


01:56 PM

Sunak: Government can’t fully support aviation sector

Addressing aviation , which Angela Eagle highlighted as particularly vulnerable, Mr Sunak says the sector is facing a crisis that is somewhat beyond Government control – pointing to the post-9/11 period as an example of a previous time when air travel fell over a sustained period.

He notes that many companies in the sector can access the support schemes that are already in place.


01:53 PM

Sunak: Hard to draw boundaries on rehiring bonus

Labour’s Angela Eagle asks the Chancellor a slightly open-ended question about the impact of the Government’s fiscal intervention (she cites yesterday’s week GDP numbers as evidence policies have not had the desired effect).

The Chancellor says a position of strength is “something that over the medium term we will want to return the public finances to”.

Ms Eagle asks why the Government’s job retention bonus scheme isn’t going to target companies in a more narrow fashion – she says this could have saved money. The scheme has been criticised as effectively offering a bonus to companies that were going to rehire staff anyway.

Mr Sunak says it would have been impossible to determine which sectors should and shouldn’t get support.

Ms Eagle points out that some sectors remain effectively locked down due to Government policy – she points to aviation – saying these should have received specific support.

Mr Sunak doubles down on his previous response, adding “nobody seems to be able to say what sectors they would exclude”.


01:45 PM

Sunak: Not too worried about company debt

Under further questioning from Mr Stride, the Chancellor says he’s not too worried about problems arising from high levels of company debt as a result of the crisis. He notes that UK companies are fairly under-leveraged compared to international competitors, and notes that many have shored up their cash positions in recent months.

He says the idea of the Government taking stake in a multitude of companies as a form of stimulus would be cumbersome and impractical, but says the Treasury is open to creative ideas.


01:38 PM

Sunak demurs on tax

The Chancellor is asked about tax first of all – under questioning by committee chair Mel Stride, he refuses to be drawn on whether hikes are coming. The Conservatives campaigned on a platform of no tax rises last year, but Covid-19 is likely to have ended that ambition.


01:36 PM

Sunak speaks

Questions have begun over at the Treasury Select Committee hearing with Chancellor Rishi Sunak. If you refresh the page, you can watch live using the video embedded at the top.


01:34 PM

US industrial production jumps most since 1959

US industrial production jumped back in May, rising 5.4pc in the single biggest monthly rise since 1959, according to Federal Reserve data. That still leaves it some way below pre-virus levels: 


01:15 PM

Coming up: Sunak in front of the Treasury Select Committee

The Chancellor will be making an appearance in front of the Treasury Select Committee in 15 minutes (2.30pm).

He is expected to give signals about how he plans to get the public finances under control as the budget deficit is expected to soar to £350bn this year.


12:40 PM

Italy reaches deal with billionaire Benetton family over Genoa bridge collapse

Genoa bridge 

One of Italy’s richest families will allow its toll road business to be part-nationalised following the fatal Genoa bridge collapse in 2018.

My colleague Oliver Gill writes:

The billionaire Benetton family will hand over a 51pc stake in the roads arm of Atlantia, the infrastructure group that is also Eurotunnel’s biggest shareholder. Atlantia shares surged 24pc in Milan on news of the deal, although terms have yet to be confirmed.

Italy’s ruling Five Star Movement had pledged to strip Atlantia of its toll road concessions to punish it over the bridge catastrophe that killed 43 people in August 2018.

Autostrade per l’Italia, 88pc owned by Atlantia, operates more than 3,000km of highways and was originally created during Italy’s post-war reconstruction. 

The Genoa bridge collapse led to a national mourning after cars and lorries plunged onto rail tracks below. 

Whilst a ministerial commission concluded that Autostrade had underestimated the integrity of the bridge, the company rejected the claims, leaving both sides at loggerheads over remedies.

Fears were raised of a multibillion-euro lawsuit if the Italian government followed through with its threat to strip Autostrade of its toll road concessions. The loss of the contracts could have had more existential consequences for Atlantia, which warned it could default on debts taken on to acquire Spain’s Abertis for €16.5bn in 2018. 


12:13 PM

One in 10 Goldman London staff going to office

Alongside’s today’s results for the US investment bank, Bloomberg report about a tenth of Goldman Sachs’ London staff are currently going into the office:

Goldman Sachs, which usually has about 6,500 people in its European headquarters, has only an estimated 700 in each day, while Nomura [a Japanese brokerage and bank] has about 200 heading to its digs next to the River Thames, according to people familiar with the situation who asked not to be named discussing internal matters.


11:51 AM

Goldman Sachs trading beats estimates

Earnings week for Wall Street banks – today, Goldman Sachs is the biggest name to report results.

The group beat estimates for its trading performance in the second quarter, with its fixed income, currencies, and commodities division bringing in $4.2bn in revenue, a 93pc surge.

The rise echoes similarly strong performances by JP Morgan and Citigroup.

Chief executive David Solomon said:

While the economic outlook remains uncertain, I am confident that we will continue to be the firm of choice for clients around the world who are looking to reshape their businesses and rebuild a more resilient economy.


11:39 AM

Government examines green investment bank

The Government is close to creating a new state-backed green investment bank to drive the development of low carbon infrastructure, energy minister Kwasi Kwarteng has said. 

My colleague Emma Gatten reports:

Speaking at an event earlier this week Mr Kwarteng said he expected an announcement “in the not too distant future.”

Mr Kwarteng said there had been “broad discussion within Government about how we can in effect create the Green Investment Bank 2.0”.

He said such a body would need serious consideration if the UK had “any chance” of meeting its statutorily binding commitment to be net zero in carbon emissions by 2050. 

The first green investment bank was established under the Conservative-Lib Dem coalition and sold to Australian investment bank Macquarie Group in 2017 for £2.3bn.


11:14 AM

Johnson: BA in ‘severe difficulties’

Speaking at Prime Minister’s Questions today, Boris Johnson has acknowledged problems affecting British Airways and other aviation sector groups. He told MPs:

British Airways and a number of other companies are in severe difficulties at the moment. We cannot simply with a magic wand ensure that every single job that was being done before the crisis is retained after the crisis


10:51 AM

UK recovery will be ‘incomplete V’ – BoE’s Tenreyro

Silvana Tenreyro - Bank of England

Bank of England policymaker Silvana Tenreyro has said the UK’s Covid-19 recovery is likely to be an “incomplete V” as people and companies spend cautiously through the pandemic.

My colleague Russell Lynch reports:

Ms Tenreyro expects a first big step-up in growth between July and September as shoppers shift their behaviour and unemployment climbs.

Her comments came after May’s GDP figures disappointed with growth of just 1.8pc over the month as lockdown restrictions were only gradually lifted.

The rate-setter’s assessment is far less bullish than that of her colleague Andy Haldane, the Bank’s chief economist, who claimed “so far, so V” on the shape of the recovery.

She said: “Behavioural responses mean that the UK economic outlook will continue to depend on the global and domestic spread of Covid-19. Assuming prevalence gradually falls, my central case forecast is for GDP to follow an interrupted or incomplete 'V-shaped' trajectory, with the first quarterly step-up in the third quarter.”


10:28 AM

ITV: ‘Positive news’ coming on Oxford Covid-19 vaccine

ITV political editor Robert Peston tweets that “positive news” is coming on the Covid-19 vaccine being developed at Oxford University.

 That has given AstraZeneca shares a slight boost:


10:20 AM

Guardian plans workforce cuts

The Guardian has announced a wave of job cuts, including 70 from its editorial operations. 

The paper itself reports:

The editor-in-chief, Katharine Viner, and the Guardian Media Group chief executive, Annette Thomas, said in a joint statement to staff that the pandemic had created an “unsustainable financial outlook for the Guardian” with revenues expected to be down by more than £25m on the year’s budget.

They said Guardian Media Group, the parent company of the Guardian and the Observer, was facing “unsustainable annual losses in future years unless we take decisive action” to reduce costs.


10:11 AM

Treasury Select Committee approves new OBR chair

The Treasury Select Committee has approved the appointment of Richard Hughes as the new chair of Office for Budget Responsibility.

In their report, MPs said of the new fiscal watchdog chief:

We are satisfied that Richard Hughes has the professional competence and personal independence to carry out his role, and we consent to him being appointed as Chair of the Office for Budget Responsibility. We wish him every success in his role.


09:56 AM

Hochschild rises after announcing restart plans

Precious metal miner Hochshild Mining is leading risers on the FTSE 250 today after announcing its Inmaculada mine in Peru will restart operations next week.

The group, which also operates in Argentina, said its gold productions fell to 79,073 ounces in the six months to the end of June, compared to 138,080 ounces a year ago. Silver production dropped from 8.7m ounces to 4.1m.

Ignacio Bustamante, its chief executive, said:

The second quarter results inevitably reflect the impact of Covid-19 on the countries we operate in. However, we remain in a strong financial position and currently expect that the extensive protective measures we have implemented across the organisation will allow our full team to start returning to Inmaculada next week.

We look forward to an ambitious second half schedule, particularly in our brownfield drilling programme, and we expect to issue our updated 2020 guidance when we have assessed the full impact of the current suspension

Several of its sites remain closed due to the pandemic.

Peel Hunt’s Tim Huff said Hochschild’s production levels would likely not normalise until the end of the year, but added “the balance sheet is more than strong enough to handle any financial weakness during this period”.


09:35 AM

Full report: Apple wins court case

My colleague Hannah Boland has more details on Apple’s court victory. She writes:

The ruling from Europe's second highest court comes as the latest twist in a case which has run on for almost four years, when the Commission first issued an order against Apple to pay back taxes to Ireland.

At the time, Europe's antitrust chief Margaret Vestager had ruled that Apple was paying so little tax on its operations in Ireland that it amounted to illegal state aid. Apple was forced to transfer the €13bn into an escrow account, where it has remained during appeal proceedings. 

The order had been disputed by both Apple and Ireland, which was seeking to protect its low-tax regime that attracts major technology firms including Apple. Around 6,000 Apple staff work in Ireland. 

Dublin had argued that its tax rules did not violate European or Irish laws and branding the decision as “fundamentally flawed”.


09:10 AM

Apple wins EU court battle over €13bn bill

Just in: Apple has won its court battle with the EU over a €13bn Irish tax bill, in a major blow to antitrust chief Margrethe Vestager.

Bloomberg reports:

The EU General Court sided with the iPhone maker, ruling on Wednesday that Ireland’s tax arrangements with the company weren’t illegal state aid. The decision can be appealed.


09:07 AM

Pret passes VAT savings to customers

Cafe chain Pret A Manger has confirmed it will pass on the savings from a looming VAT cut to customers, starting from today.

Chancellor Rishi Sunak announced a cut on VAT from 20pc to 5pc for the hospitality and tourism sectors during his ‘mini-Budget’ last week.

A spokesperson for the chain said:

From today, you’ll be able to enjoy your takeaway coffee for a little bit less and from Friday this week, you’ll be able to enjoy lower prices while eating in at your local Pret.


08:51 AM

Dixons shares fall on ‘challenging’ outlook

Shares in Dixons Carphone have fallen sharply today after analysts warned the electricals retailer faces a tough road ahead.

The group scrapped its dividend after falling to a £140m annual loss for the twelve months to the start of May as lockdown weighed on mobile phone sales and forced its store to close.

Alex Baldock, its chief executive, said:

Since the year end, all our electricals businesses have continued to grow sales. Where our stores have reopened we've performed well, while continuing to see strong online sales growth. That said, we expect a weakening of consumer spending later this year and are being cautious in our planning.

Royal Bank of Canada’s Richard Chamberlain said Dixons has a relatively strong market position, but said the outlook for big-ticket purchases “look challenging”. He added:

It has shown strength online, however historically a shift to online has made it more difficult to maintain margins in electricals

 


08:30 AM

Market moves

European markets have pushed slightly higher today, after a sharp fall yesterday. The FTSE 100 is lagging its top continental peers, but fell less than the CAC and Dax on Tuesday.

Bloomberg TV - Bloomberg TV

08:23 AM

Money round-up

Here are some of the day’s top stories from the Telegraph Money team:


07:59 AM

Pound rises

The pound has pushed higher against the dollar today amid a risk-on mood on global markets, and that better-than-expected inflation data. 


07:54 AM

Dunelm sales recover as lockdown eases

Furniture and homewear retailer Dunelm warned its full=year pretax profit will take a hit due to the lockdown, despite a recent recovery in sales.

The FTSE 250 group said total sales rose 20pc in June, having fallen as much as 78pc in April. A surge in online sales, which were up 106pc over the quarter, wasn’t enough to offset the drop caused by store closures.

The group said it had been operating home delivery at “record levels”, but added:

...due to high demand, online availability, delivery lead times and service levels have been under pressure. 

Nick Wilkinson, its chief executive, said:

The decisions we have made over the last few months have been guided by our principles and values and we are emerging from this unprecedented period as a stronger business. This has given us the confidence to accelerate our digital transition and introduce new ways of serving our customers.

There is lots more to do and we are energised to evolve our customer proposition and operations at pace, as we continue to navigate an uncertain external environment.

Citi’s Matthew Garland said Dunelm faces challenges ahead:

Overall, the very strong 4Q performance and the strong FY20E profitability guidance will be taken positively by the market, but this will likely be tempered by cost headwinds and uncertainty in FY21E.


07:32 AM

Asos expects profit at top end of estimates

Another fashion update: online retailer Asos said it anticipates profits this year will land at the top end of market expectations.

The group said sales rose 10pc over recent months, picking up as lockdowns rolled back across Europe. In the UK, sales fell 1pc – which Asos blamed on social-distancing measures at its warehouses – while US sales fell 2pc.

Nick Beighton, its chief executive, said:

We have learnt a lot and adapted quickly, and ASOS finishes the period with improved underlying profitability. While we remain cautious about the consumer impact of Covid-19 looking forward, we are on track to deliver strong year-on-year profit growth and to return to positive free cash flow for the full-year.

Liberum’s Wayne Brown said the group’s relatively muted performance compared to rivals such as Boohoo and Zalando “highlights the challenges of wholesale model where lead times are long and capital is tied up in inventory makes it difficult to quickly change the product mix”.


07:19 AM

Burberry shares drop after results

Burberry  - Burberry/Danko Steiner

Shares in Burberry have dropped sharply this morning after the luxury fashion group reported a 45pc sales drop in the three months to the end of June.

The FTSE 100 group said it plans to streamline some of its front-line retail and office functions to save costs in the face of the pandemic.

Comparable sales improved during the period, down 20pc last month.

Macro Gobbetti, its chief executive, said:

In Q1, sales were severely impacted by the drop in luxury demand from COVID-19 and we expect it will take time to return to pre-crisis levels with the resumption of overseas travel. We are encouraged by the improving trends in all regions and the promising exit rate for June. We saw an excellent response to new product launches in recovering economies as well as online.

Pointing to its previously announced plans to create three new business units, Burberry said it would look to “streamline” its operations in “certain geographies outside the UK”. It added:

Subject to consultation, we expect these changes, which include office space rationalisation, to deliver savings of around £35m in FY 2021, with annualised savings of £55m and an associated one-off restructuring charge of £45m. These savings are incremental to our previously announced £140m cumulative cost saving programme.

Royal Bank of Canada’s Piral Dadhania said the pandemic has put Burberry in an unenviable position, adding:

Brand heat is improving, but we are unsure that it is strong enough to take market share from the sector winners.


06:51 AM

What contributed to inflation?

The ONS has broken down how different sectors  contributed to inflation during June. Continuing a three-month trend, recreation and culture cost increases were the biggest contributor to rising consumer prices (per the CPIH gauge, which includes owner-occupiers’ housing costs).

Here’s a breakdown by month:

And over 12 months:

The ONS added:

Within this broad group, the upward contribution came from games, toys and hobbies, particularly computer games and computer games consoles. 


06:45 AM

UK inflation picks up

Consumer prices in the UK rose more than expected during June, up 0.1pc month-on-month and 0.6pc year-on-year according to the Office for National Statistics. That’s a faster pace of change than economists had predicted, although inflation is expected to continue to behave unusually over the coming months. 

Capital Economics’ Paul Dales said the rise “probably won’t be sustained for long”:

We suspect that after the initial release of pent up demand once non-essential retailers opened in mid-June, retailers will have to use heavier discounts to get people through the doors. And a large part of the rise in recreation and culture was due to a jump in games, toys and hobbies inflation from +1.0pc to +7.9pc, which bounces around at the best of times.

What’s more, in either July or August the effects of the recent cut in the VAT rate for the hospitality/tourism sectors and the “Eat Out to Help Out” (EOHO) restaurant discount scheme will kick in. If 50pc of eligible businesses pass on the VAT cut and 50pc participate in the EOHO scheme, then inflation may fall by 0.7 ppts. That would be enough to take it below zero.  


05:58 AM

Agenda: Stocks boosted by vaccine hopes

Good morning. European stocks are set to open firmly in the green amid optimism that progress is being made in developing a coronavirus vaccine. 

It comes after drugmaker Moderna announced its Covid-19 vaccine produced antibodies in all patients tested in an initial safety trial.

5 things to start your day 

1)  Asos axes UK suppliers over ethics worries: The company’s inspectors found major ethical breaches at almost a quarter of suppliers visited in 16 countries, including seven sites in the UK, according to a 2018 report leaked to the Telegraph.

2) BT leads blue-chip push to adopt electric vehicles by 2030: BT, British Gas owner Centrica, outsourcer Mitie and Marmite maker Unilever are among the companies which have vowed to switch to electric fleets within a decade as part of the fight to cut carbon emissions and other pollution.

3) Discount dining scheme could push inflation to record low: Under the plan diners will get 50pc off their meals up to a maximum of £10 per person from Monday to Wednesday in August, amounting to 13 days of cheaper meals at participating venues.

4) As Bulgaria and Croatia bid to join the euro, is there life in the currency yet?: First, Greece and, more recently, Italy flirted with severing ties with the 19-strong currency union. Seemingly irreparable differences reared their head again this year. But now an expansion of the bloc could be more likely than a country departing.

5) Former Barclays banker Roger Jenkins exaggerated role of ex-wife in Barclays rescue: The banker’s success in securing the firm cash for a 2008 rescue deal was believed to partly rest on the shoulders of his former wife Diana, a key networker in their relationship who forged a crucial role in overseeing what she called “the Roger brand”.

What happened overnight 

Asian shares jumped on Wednesday as optimism about a coronavirus vaccine bolstered risk appetite while the euro rose to a four-month top on the prospect of stimulus ahead of a crucial EU summit.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.2pc, edging closer to a recent five-month peak.

Japan's Nikkei added 1.5pc, to the highest since June 10, while Australia's benchmark index was up one per cent. 

Chinese shares gained modestly, with the blue-chip CSI300 index ticking up 0.3pc.E-mini futures for the S&P 500 rose 0.8pc.

Risk appetite was boosted by Moderna’s experimental vaccine for Covid-19.

Coming up today

Interim results: Burberry, Hochschild Mining, McCarthy & Stone

Full-year: Dixons Carphone, Galliford Try

Trading statement: Dunelm, Premier Oil, Severn Trent

Economics: Inflation, Rishi Sunak at Treasury select committee (UK); Bank of Japan monetary policy announcement