Vaccine a shot in the arm for business confidence – business news 31 March 2021.
James Salmon, Operations Director.
Vaccine a shot in the arm for business confidence, GDP, growth prospects rising but dangers remain, UK Grocery Sales, City policy chair says most workers will return to offices and Khan fears job losses when furlough ends.
Vaccine a shot in the arm for business confidence
The latest Lloyds Business Barometer shows that the vaccine rollout has helped drive business confidence to its highest point in a year. The analysis shows that overall business confidence has increased 13 percentage points to 15% in the last month, the highest level since March 2020. Firms’ trading prospects for 2021 have jumped 10 points to 12%, with 34% of firms anticipating a pick-up in activity. On the outlook for hiring, over a quarter of companies anticipate expanding their workforce while 22% expect reductions. Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “It’s been a year since the first lockdown and the surge in confidence this month tells us firms are increasingly confident about economic recovery.” He added: “The broadly positive outlook is driven by steady vaccine deployment, the roadmap out of lockdown and the extension of government support measures.”
GDP
The UK Economy bounced back more strongly than first thought in the last six months of 2020, the Office for National Statistics said this morning. GDP rose by 16.9 per cent and 1.3 per cent in the third and fourth quarters respectively. An early estimate of one per cent growth for the period between October and December was exceeded.
IMF head: Growth prospects rising but dangers remain
Kristalina Georgieva, managing director of the International Monetary Fund (IMF), says that while prospects for global growth have improved since January, uneven progress in fighting the coronavirus pandemic could jeopardise the economic gains. Noting that the IMF’s updated economic forecast will next week show the global economy growing at a faster pace than the 5.5% gain projected at the start of the year, she said this has been driven by a $1.9trn US rescue package and rising confidence from increased vaccinations in many advanced economies. However, Ms Georgieva warned that economic prospects are “diverging dangerously” and called on major central banks to “carefully communicate their policy plans to prevent excess financial volatility at home and abroad.”
UK Grocery Sales
UK Grocery Sales growth came to an abrupt end in recent weeks, numbers from Kantar showed, as supermarkets begin to lap tough comparatives on the anniversary of the country entering its first lock-down. During the four weeks ended 21st March, UK grocery sales were down 3.0% annually. Over the wider 12-week period surveyed by Kantar, sales growth was 7.4% to £31.12 billion, a demonstrable slowdown from some of the previous figures over the past year. In Kantar’s survey for the 12 weeks to February 21, sales climbed 13%.
City policy chair says most workers will return to offices
City of London policy chair Catherine McGuinness says the financial centre is likely to see most workers return to their offices after the pandemic, although there are likely to be changes to the way people work. She told the BBC: “What people are telling us is that they are expecting their central office base to remain at the core of their business with people coming in three or four days, working different hours, so we are expecting the bulk of the return … What it will mean in terms of the overall footfall, we are not yet quite clear.” A KPMG survey suggests that while most major global firms no longer plan to reduce their post-pandemic office space, few expect business to return to normal this year.
Khan fears job losses when furlough ends
London mayor Sadiq Khan has warned that without action to protect roles, there is likely to be a wave of job losses when the furlough scheme ends in September. Mr Khan said: “My concern as somebody who lived through the 1980s is we could have another period of mass unemployment where a generation is written off.”
Danske Bank to refund SMEs
Danske Bank has agreed to refund around 300 small businesses that it charged to set up business accounts when they applied for bounce-back loans, with the Competition and Markets Authority saying the bank will refund around £16,450 for breaking rules.
Urban prices up as office returns near
House prices in cities and towns are increasing as people prepare for a return to the office, research from estate agent Savills suggests. Winchester, Oxford and Bath saw price rises of 4%, 3.7% and 3.2% respectively in the first three months of 2021, while Edinburgh and York saw average values climb 2.6%. The report shows that central London, where house prices have taken a hit since the start of the coronavirus pandemic, has seen house prices increase for the first time since 2019. On average, the value of prime property outside of London increased by 2.2% in Q1 – the highest quarterly increase since March 2010.
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