The end of the government’s furlough scheme in October looms large for all of UK business. For retail and hospitality companies, another deadline is just as chilling: the end of the one-year “holiday” on business rates next March, the Financial Times reported in a commentary. Since rates are linked to rental values dating from 2015 — and a revaluation has just been postponed — shop chains could snap back into paying a hefty levy based on rents calculated long before Covid-19 devastated their businesses.
Resources Per Country
- Czech Republic
- Isle of Man
- San Marino
- United Kingdom
- Vatican City
- Bosnia and Herzegovina
Lloyds Banking Group is preparing for a surge in customer defaults, after Britain’s largest retail bank warned that the coronavirus crisis had inflicted more damage on the economy than it had expected, the Financial Times reported. The bank’s shares tumbled more than 7 per cent on Thursday to their lowest level in eight years after the lender set aside another £2.4bn to cover future bad loans and slumped to a second-quarter loss.
Galeria Karstadt Kaufhof, Germany’s biggest department store – alongside eight affiliated companies – filed for administrative insolvency earlier this year after announcing they would close 62 out of 172 branches and make 8,000 of the approximately 30,000 employees redundant, Lawyer Monthly reported. The management agreed on the corresponding social collective agreements with the unions Verdi and NGG shortly before the protective shield procedure – which was sought by the company early April due to the impact of Coronavirus – was completed.
High-grade eurozone government debt yields dropped to their lowest levels in over two months as a cocktail of negative news sent investors scrambling for safe assets, Reuters reported. Poor corporate earnings, record deaths from COVID-19 in six U.S. states and frictions over a stimulus plan in the United States hit risk sentiment on Wednesday, and had investors retreating to safe assets such as government bonds. Fears of rising COVID-19 infections also hit Asia and Europe this week, with several countries imposing new restrictions and Britain quarantining travellers from Spain.
In a world riven by disease and credit risk, traders are betting central bankers will pin down global borrowing costs for years to come -- regardless of the consequences, Bloomberg News reported. With banks awash with cash, money markets are signaling that unsecured lending rates will stay near historic lows across Europe and the U.S., even as rising corporate bankruptcies add pressure to bank balance sheets. Eurodollar futures, benchmarked to the three-month London interbank offered rate for dollars, suggest borrowing costs will barely budge until at least the first quarter of 2023.
Barclays set aside a higher than expected 1.6 billion pounds to cover a possible rise in loan losses in the second quarter and warned a grim outlook and low interest rates would hurt profits into 2021, Reuters reported. The COVID-19 pandemic has forced banks globally to set aside billions to cover bad loans and the British bank’s consumer business is under pressure from lower interest rates, smaller credit card balances and personal loan repayment holidays.
French consumer confidence declined in July, denting hopes that the country’s economy would bounce back rapidly from the coronavirus crisis, the Financial Times reported. After an initial rebound in June, the French statistics agency’s consumer sentiment index fell by two points to 94 in July, below the average of 99 forecast by economists in a poll by Reuters. A score below 100 indicates that consumer confidence is lower than its long-term average, whereas a score above that mark suggests that sentiment is above average.
Santander slumped to an €11.1bn loss in the second quarter after the coronavirus pandemic forced the eurozone’s largest retail bank to take large writedowns on the value of several of its businesses, led by its UK arm, the Financial Times reported. This marked the first loss in the Spanish lender’s 163-year history and came after it wrote off €6.1bn of goodwill left over from the purchases that created Santander UK in the 2000s.
More than a million Spanish workers lost their jobs in the second quarter of this year, as the impact of coronavirus-related lockdowns weighed on the country’s economy, the Financial Times reported. The drop in employed workers was the biggest on record, exceeding the number of people who fell out of work at the height of the financial crisis, according to data released on Tuesday by the country’s National Statistics Institute.