Headlines

Ireland will be the eurozone’s biggest loser from a no-deal Brexit, which threatens to cause an economic “double whammy” on top of the fallout from rising coronavirus infections, the Irish central bank’s governor has warned, the Financial Times reported. Gabriel Makhlouf told the Financial Times that if the UK left the EU without a trade deal at the end of this year, the new tariffs on goods would hit Ireland’s agricultural and food sectors hardest, knocking 2 percentage points off the country’s economic growth next year.  “This whole process is lose-lose,” said Mr Makhlouf.

More than £3bn might have been stolen in furlough money by criminal gangs and fraudulent employers, according to estimates used by parliament’s spending watchdog in a report into the government’s flagship jobs protection scheme, the Financial Times reported. The National Audit Office said there was evidence of “significant levels of furlough fraud” from both organised gangs “hijacking” claims and employers taking money collected on behalf of staff. More money will be lost through staff working hours that they were claiming for, the NAO added.

Over half the small and medium-sized companies which together provide jobs for two-thirds of European workers fear for their survival in the coming 12 months, according to a survey released by management consultancy McKinsey on Thursday, Reuters reported. The survey was conducted in August, before the current acceleration in new coronavirus cases across Europe that is forcing governments to impose new restrictions on activity and prompting speculation of fresh national lockdowns.

KPMG has put its UK restructuring practice up for sale and held talks with private equity firms ahead of a possible auction before the end of the year, according to people familiar with the matter, the Financial Times reported. A cash injection would help the Big Four firm, with its finances having suffered during the pandemic. KPMG also faces a potentially large fine over its audit work for Carillion, the collapsed outsourcing group, as well as a £250m negligence lawsuit brought by the company’s administrators.

Ratings agency S&P has slashed Zambia’s credit rating to “selective default” after the government missed an interest payment last week and announced it would suspend debt service to external commercial creditors, Reuters reported. Zambia - one of the world’s top copper producers - was struggling with its ballooning debt before the coronavirus pandemic roiled global markets and looks headed for a messy and protracted default.

Suriname said on Thursday it wanted to make use of a 30-day grace period on its dollar-bond coupon payments coming due on Oct. 26 to engage with creditors to tackle its debt sustainability issues, Reuters reported. Indicating that it might not pay the coupon due on Monday, the government said in a statement it had invited all its commercial creditors to an investor presentation on Oct. 30. “Public debt has risen to historical levels and borrowing continued even as severe macroeconomic and financial imbalances were building up,” the government of the South American nation said.

Japan’s banking system remains stable as a whole and has sufficient buffers against risks, the central bank said in a semi-annual report, voicing confidence that domestic financial institutions can withstand the hit from the coronavirus crisis, Reuters reported. But the Bank of Japan warned that commercial banks were vulnerable to various risks including rising credit costs, as loans to pandemic-hit sectors like property developers may sour.

A pandemic-exacerbated surge in Thai bad loans to nine-year highs and the end of a debt payment holiday are prompting buyers of distressed debt to embark on a shopping spree in Southeast Asia’s second-biggest economy, Reuters reported. About 6.89 trillion baht ($221 billion) of outstanding Thai debt - or 42% of total lending - has been under relief programmes that include payment deferment and reduction, interest rate reduction and restructuring. The most significant of these - a government-mandated six month debt payment holiday - ended on Thursday.

Argentine bondholder groups slammed the government on Thursday over economic policies they said were undermining investor confidence in the country, which emerged from a sovereign default in September after a $65 billion restructuring, Reuters reported. Two of the groups involved in that debt revamp said in a statement that policies since then had “failed to restore confidence” and instead had “dramatically worsened the country’s economic crisis.” Bond prices have dropped sharply since the exchange.

More than a third of British hospitality companies are at risk of going bust, according to a survey on Thursday that suggested more support will be needed for businesses amid a resurgence of the COVID-19 pandemic, Reuters reported. The Office for National Statistics said 17% of food and accommodation businesses reported a “severe” risk of insolvency, while a further 21% said the risk was “moderate”.