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BANK OF MAHARASHTRA Surges by 9%; BSE BANKEX Index Up 2.1%
BANK OF MAHARASHTRA share price has zoomed 9% and is presently trading at Rs 10.
Meanwhile, the BSE BANKEX Index is at 22,787 (up 2.1%).
Among the top Gainers in the BSE BANKEX Index today is BANK OF MAHARASHTRA (up 8.6%).
Over the last one year, BANK OF MAHARASHTRA has moved down from Rs 15 to Rs 10, registering a loss of Rs 5 (down 35.9%).
On the other hand, the BSE BANKEX has moved down from 32,704 to 22,787, loss of 9,917 points (down 30.4%) during the last 12 months.
The top gainers among the BSE BANKEX Index stocks during this same period were [param_historic_top3].
What About the Benchmark Indices?
The BSE Sensex is at 32,089 (up 1.8%).
The top gainers among the BSE Sensex stocks today are HUL (up 3.0%), INDUSIND BANK (up 2.9%) and BAJAJ FINANCE (up 2.8%). Other gainers include AXIS BANK (up 2.7%) and RELIANCE IND. (up 2.5%). The most traded stocks in the BSE Sensex are RELIANCE IND. and SBI.
In the meantime, NSE Nifty is at 9,383 (up 1.5%). The top gainers in the NSE Nifty include DR. REDDYS LAB (up 4.1%), INDIABULLS HOU. FIN. (up 3.8%) and HUL (up 3.2%). Other gainers include HINDALCO (up 2.5%) and ZEE ENTERTAINMENT (up 2.3%) are among the top gainers in NSE Nifty.
Over the last 12 months, the BSE Sensex has moved down from 38,277 to 32,089, registering a loss of 6,188 points (down 16.35%).
BANK OF MAHARASHTRA Financial Update...
BANK OF MAHARASHTRA net profit declined 103.6% YoY to Rs 1 billion for the quarter ended December 2019, compared to a loss of Rs 38 billion a year ago. Operating income rose 14.0% to Rs 30.2 billion during the period as against Rs 26.5 billion in October-December 2018.
For the year ended March 2019, BANK OF MAHARASHTRA reported 328.3% increase in net profit to Rs 47.6 billion compared to net profit of Rs 11.1 billion during FY18.
Revenue of the company grew 2.2% to Rs 108 billion during FY19.
The current Price to earnings ratio of BANK OF MAHARASHTRA, based on rolling 12 month earnings, stands at 6.7x.
This article (BANK OF MAHARASHTRA Surges by 9%; BSE BANKEX Index Up 2.1%) is authored by Equitymaster.
Equitymaster is a leading 'independent' equity research initiative focused on providing well-researched and unbiased opinions on stocks listed on the Bombay Stock Exchange.
Bank of England warns of sharpest recession on record
Bank head Andrew Bailey tells the BBC there will be no quick return to normality after the hit to jobs and income.
Coronavirus: UK banks get 100,000 loan applications on first day
Banks see stampede for bounce-back loans within hours of the new government scheme going live.
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Bank of England warns UK faces historic recession; US jobless claims hit 3.1m - business live
Britain’s central bank warns that the spread of Covid-19 and the measures to contain it could wipe 14% off UK GDP this year
- Latest: More than 3m Americans filed jobless claims last week
- UK could shrink 25% this quarter, Bank warns
- Bank predicts 14% fall in GDP in 2020 and rising unemployment
- BoE leaves interest rates at 0.1%, QE at £645bn
- Coronavirus – latest updates
- See all our coronavirus coverage
Time to recap
Britain is facing its worst recession in 300 years, according to the latest scenario from the Bank of England. The BoE estimates that GDP will plunge by 25% this quarter, with unemployment hitting 9%, due to the abrupt halt to activity under the Covid-19 lockdowns.
Related: UK unemployment to double and economy to shrink by 14%, warns Bank of England
New unemployment claims filed in the past 7 weeks:
Week ending...
March 21: 3.3 million
March 28: 6.9 million (**a record**)
April 4: 6.6 million
April 11: 5.2 million
April 18: 4.4 million
April 25: 3.8 million
May 2: 3.2 million
Total: Nearly 33.5 million Americans w/out work pic.twitter.com/KZonDSSPG7
US Initial Jobless Claims fell to 3.2m, down from the previous week’s figure of 3.8m and half the peak recorded 5 weeks ago, but roughly in line with economists’ forecasts. These figures support estimates of the April unemployment figure, to be released tomorrow, to reach a shocking 16%.
“Markets, however, are now looking beyond the employment data and forward to the potential recovery. With some US states now beginning to reopen for business, investors will be watching closely to see how quickly employees return to work and how rapidly economic activity bounces back.
A late rally has lifted the UK stock market to its highest level in a week.
The FTSE 100 has just closed 82 points higher at 5935, a gain of 1.4%.
The International Monetary Fund says it has approved requests for emergency pandemic aid totalling $18bn, from 50 of its 189 members, and is working through another 50 requests.
The IMF’s executive board was working through requests at record speed and would consider a request from Egypt for both emergency financing and a stand-by lending arrangement on May 11, spokesman Gerry Rice told reporters in an online briefing.
“It’s an IMF moving at an unprecedented speed in an unprecedented way to meet this unprecedented challenge which we’re all facing,” he said, noting the Fund had also temporarily suspended payments on IMF debts for 25 of the poorest countries.
The gloom in the luxury goods sector is deepening even though some countries have started to relax their coronavirus lockdowns.
“As consumers slowly emerge from lockdowns, the way they see the world will have changed and luxury brands will need to adapt.
Safety in store will be mandatory, paired with the magic of the luxury experience: creative ways to attract customers to store, or to get the product to the customer, will make the difference.”
Ronald Temple, Head of US equity at Lazard Asset Management, doesn’t share the exuberance in the markets today.
“The US labor market is in the worst position since the Great Depression and is unlikely to improve sustainably anytime soon. Until widespread testing, an effective therapy, and a vaccine are in place, any improvement in employment is likely to be temporary.
Premature efforts to reopen economies undermine our progress in controlling the pandemic and risk extending the duration of the downturn.”
The Nasdaq has shrugged off Covid-19 fears because investors are rushing into “giant tech names that are considered more resilient in this crisis”, explained Marios Hadjikyriacos of XM.
That includes Amazon (up 27% this year) and Microsoft (up 16%).
Remarkably, the US Nasdaq index has now caught up all this year’s losses.
The tech-focused share index is now flat for 2020, thanks to strong recoveries in major technology companies such as Apple, Amazon and Microsoft.
The Nasdaq is positive for the year. pic.twitter.com/HtkHzXAzEd
As expected, the US stock market has indeed jumped in early trading.
Jobless claims should be back below 1M by the 2nd or 3rd week of June; the rate of decay is quite consistent. pic.twitter.com/OtOoeir28P
European stock markets are holding onto their earlier gains, despite the latest grim US jobs data.
Wall Street is expected to open higher too, with the Dow up around 1% in pre-market trading.
Repeat after me.
Equities are forward looking jobless claims backward.
Therefore entirely normal at times for them to move in different directions. And yet we get the same old headlines asking why.
The spectre of unemployment is haunting America - but in some states more than others:
Jobless Claims Since March 20th as a Percent of Total State Employment: pic.twitter.com/me0mbMFvQj
Before the Covid-19 crisis began, America had never lost a million jobs in a single week before.
It has now suffered seven consecutive weeks of massive job losses, as firms have slashed staff under the coronavirus lockdown.
33.5 million Americans have filed jobless claims over the last 7 weeks. https://t.co/WIOd3ZzpVq pic.twitter.com/8vqdipxopI
Our US business editor Dominic Rushe says some US states are really struggling to cope with the unprecedented surge in unemployment.
He writes:
The pace of layoffs has overwhelmed state unemployment systems across the country. Over a million people in North Carolina have now made unemployment insurance benefit claims, equivalent to 20% of the state’s workforce.
Some 4 million have applied in California and the state’s jobless benefits fund is “very close” to running out, governor Gavin Newsom said this week.
Related: Coronavirus: three million more Americans file for unemployment
Some instant reaction to the latest US jobless report:
The effects of the #coronavirusrecession continue to ripple through the economy. In the week ending in May 2, 3.2 million workers filed for initial unemployment benefits, according to the @USDOL’s Weekly #unemploymentinsurance (UI) claims report. 1/3 pic.twitter.com/XUFFtG3Rpp
3.17 MILLION people filed for first-time unemployment benefits last week. Almost 33.5 MILLION filing jobless claims in 7 weeks. 1 in 5 Americans unemployed. These are lives and family shaken, devastated.
Though still tremendously elevated, the 3.2 mln new unempl claims continues downward trend as initial surge passes. But # of Americans receiving jobless benefits, pierced 22 mln. pic.twitter.com/b4SF5apZR6
Newsflash: Another 3.1 million Americans filed new claims for unemployment benefit last week, as the US jobless crisis rages.
That’s down from 3.8m in the previous week, but still another awful number.
Unemployment Insurance Weekly Claims
Initial claims were 3,169,000 for the week ending 5/2 (-677,000).
Insured unemployment was 22,647,000 for the week ending 4/25 (+4,636,000).https://t.co/ys7Eg5LKAW
Stocks are continuing to rise in London, seemingly lifted by hopes that some UK lockdown restrictions will be eased soon.
The FTSE 100 is now up 63 points or 1.1% at 5917, after the government confirmed that Boris Johnson will reveal his strategy on Sunday evening:
NEW: Boris Johnson will be giving a statement at 7pm on Sunday discussing the route out of the #COVID19 lockdown and the government's next steps.
With oil, mining and banking stocks all in the green, the FTSE added another 0.9% as the session went on, sticking its nose across 5900 for the first time in a week. This would suggest that investors have swallowed the bitter 14% contraction in 2020 pill offered up by the BoE, thanks to the spoonful of sugar that is the expectation of a 15% rebound in 2021.
Elsewhere the markets were just as perky, investors continuing to express their relief at the various ongoing and soon-to-be unveiled lockdown-easing measures around the globe. The DAX passed 10700 as it climbed 0.8%, while the CAC struck 4470 following a 50 point increase.
Our economic editor Larry Elliott says the BoE is pinning its hopes on a V-shaped recovery to GDP - and pushing banks to do their bit.
One of the key messages from the Bank to the high street lenders was that they stand to lose more by not lending than they will by lending freely, because there will be more long-term scarring of the economy, more companies going bust and more losses for them to swallow. At his press conference, the Bank’s governor, Andrew Bailey, said he was ramming home this point to lenders at at every opportunity.
Forecasting is tough at the best of times: in the current circumstances – where there is uncertainty about how fast restrictions will be lifted, how consumers will behave, and whether there will be a second wave of infection – it is all but impossible.
All that can really be said is that the risks to the Bank’s scenario are skewed heavily to the downside. Threadneedle Street decided against providing more stimulus at this week’s meeting, but it is only a question of time.
Related: Bank of England offers hope amid Covid-19's grim economic spectacle
New: BoE governor Andrew Bailey tells me while it's unlikely, he doesn't rule out cutting UK interest rates into negative territory (unlike M Carney):
"Previous governors didn't have in mind this scenario we're in today. And I think it's wise not to rule anything off the table."
Bank of England governor Andrew Bailey has told Sky News that the slump in the UK economy this year is “unique, certainly in modern times”.
But he’s also optimistic that activity is likely to recover “much more quickly” than after a normal recession:
.@bankofengland Governor Andrew Bailey says despite the "unique" challenges of #coronavirus, he believes the lifting of the lockdown will see activity in the economy recover 'quicker than it would if was a normal recession.'
Read more here: https://t.co/xVqko9FY6J pic.twitter.com/heyAfBtIMQ
It’s been a busy morning for telecoms news too.
Cable operator Virgin Media and mobile network O2 are merging, to create a £31bn “national champion” to challenge BT and Sky in the UK.
Related: Virgin Media and O2 owners confirm £31bn mega-merger in UK
Related: BT suspends dividend to free up 5G and broadband investment
Here’s Anna Stewart of CNN on the Bank of England’s forecasts:
Bank of England says the economy will contract by 25% in the second quarter. Yes it’s bad.
However, it’s far better than OBR forecast of -35% a couple of weeks ago.
Plus take a look at the projected recovery... pic.twitter.com/PMlsLDAPXe
Sharp rise in unemployment - expected to hit 9% in Q2.
However, compare that to :
WH economist Kevin Hassett has warned of 20% unemployment in April
London’s Evening Standard points out that the Covid-19 slump will be three times as severe as after the financial crisis of 2008.
Today’s @EveningStandard on the plans to stagger the rush hour and the latest Bank Of England forecasts pic.twitter.com/A811vwVaTL
Covid-19 lockdowns has already pushed British Airway’s parent company into the red.
My colleague Jasper Jolly explains:
British Airways owner International Airlines Group made a £1.5bn loss in the first three months of the year, as chief executive Willie Walsh said it would take three years for passenger demand to recover to pre-pandemic levels.
IAG has halted 94% of its flights in response to travel restrictions during the coronavirus pandemic, causing it to bleed cash. Last week, British Airways set out plans to make up to 12,000 of its staff redundant because of the global collapse in air travel.
Related: British Airways owner reports £1.5bn loss due to coronavirus
Despite the Bank of England’s gloomy prognosis for this year, stocks and the pound are a little higher this morning.
That’s partly because the BoE expects the economy to grow by 15% in 2021, after a 14% contraction this year [although arithmetically that still leaves the economy smaller]
The Bank of England’s new governor, Andrew Bailey, has hinted that the BoE could expand its stimulus programme at its next meeting in June.
Bloomberg’s Jill Ward has the details:
Two of the BOE’s nine policy makers wanted to immediately increase bond purchases -- the main policy tool now that the key interest rate is near zero -- by 100 billion pounds ($124 billion) in a decision announced early Thursday. The rest agreed downside risks “might necessitate further monetary policy action.”
Bailey, who earlier pledged “total and unwavering commitment” to safeguard the economy during the coronavirus crisis, told reporters that the fact no action was taken this time doesn’t rule out a response soon.
"Bank of England Governor Andrew Bailey made clear that policy makers could expand monetary stimulus as soon as next month as the U.K. faces an economic slump that could be the worst in Europe"https://t.co/iQK3nKt2ef pic.twitter.com/XMtpY5HHsH
Trade unions are urging the UK government not to make the economic downturn worse by turning off its furlough scheme too quickly.
The TUC says that today’s statistics showing that two-thirds of firms have tapped the Jobs Retention scheme shows it is vital.
Around half of the workforce are working from home, but varies drastically by industry.
A big majority of workers in the information and communication and professional sectors are working from home, whereas it's a small minority in other industries. pic.twitter.com/QDN3wcbIVk
Around a quarter (23%) of businesses have ceased or paused trading.
This rises to around 80% in the arts and accommodation and food sectors. pic.twitter.com/IsHQKI5wYF
UK banks have approved an additional 8,550 government-backed business loans worth £1.4bn within the past week, but are still struggling to increase the pace of approvals amid rising demand.
The original coronavirus business interruption loan scheme (CBILS) has now lent around £5.5bn to 33,812 small and medium sized businesses since the programme was launched on 23 March.
“Bank staff have worked tirelessly over the past week to provide businesses with the finance they need, delivering another £1.4 billion of lending under the CBIL scheme, on top of over £2 billion in Bounce Back Loans targeted at smaller firms and sole traders.”
Hat-tip to Ben Chu of the Independent, for showing just how grim the Bank of England’s forecasts are:
The Bank of of England's scenario for UK GDP for the full year of 2020 is...
-14%
That would be the worst year for the economy since 1706 according to the Bank's own historical dataset pic.twitter.com/aKflRovluH
We have estimates of quarterly UK GDP going back to 1920
The Bank's scenario has -25% in the second quarter of 2020.
That would be by far the worst seen: pic.twitter.com/7SH34zwqPW
The Treasury Committee chairman Mel Stride has ordered Barclays to explain why customers are still having trouble accessing bounce back loans - which are meant to protect UK businesses from this year’s slump.
The 100% government-guaranteed bounce back loan scheme is meant to get cash to struggling businesses far more quickly than other programmes. Any impediments put those firms at risk, Stride said:
“Issues that hamper this are very frustrating to customers and may in some cases threaten business survival.
“I raised the problems that some people were having in accessing the Barclays online system with their CEO during our public committee hearing on Monday and was assured then that the system was able to cope well.
Just in: nearly a quarter of UK firms have temporarily closed due to the pandemic, and two-thirds are furloughing some staff.
That’s according to the Office for National Statistics. It just reported that 23% of businesses who responded to its latest survey said they had “temporarily closed or paused trading” last month.
The Bank of England has also shown how its scenario compare to City economists’ forecasts -- where the range is rather, er, broad:
Here's my fave chart from this morning's Bank of England Monetary Policy Report - it's the all-important "nobody knows" chart. pic.twitter.com/vsozkW5fC6
The key message from the Bank of England today is that activity in the UK has fallen sharply, and is going to continue to plunge during this quarter.
Explaining why it thinks the UK will shrink 14% this year, it says:
Official data are sparse at this stage, but high‑frequency indicators suggest that consumer spending has fallen steeply since March. In large part, that reflects the impact of both enforced and voluntary social distancing, with some additional drag from lower incomes and confidence about the outlook. In those areas most affected, such as tourism and eating out, indicators including aircraft departures and data on the number of seated diners at restaurants suggest that spending has all but come to a halt.
The closure of businesses and widespread moves to working from home have reduced the number of journeys by car and public transport substantially. In addition, spending on many durables is likely to have been delayed. One area that has proved stronger is spending on food, as households substitute spending at supermarkets for eating out. Nevertheless, consumer spending in aggregate has fallen very significantly. In 2020 Q2, it is expected to be almost 30% lower than in 2019 Q4.
There are also signs that UK house prices are starting to slide, amid the lockdown.
Halifax has reported that prices fell by 0.6% in April, on top of a 0.3% dip in March:
The #Halifax reported #UK #house #prices dipped 0.6% month-on-month in April after a revised fall of 0.3% in March. The annual rate of increase moderated to 2.7% in April from 3.0% in March and a peak of 4.1% in January (which had been the highest level since February 2018).
The Covid-19 crisis has prompted Norway’s central bank to slash its interest rates to zero.
In a surprise move, the Norges Banks just lowered its key borrowing rate from 0.25% to 0.0%, a record low.
Norges Bank now predicts the mainland economy, which excludes oil and gas output, will contract by 5.2% in 2020, down from a March 13 forecast of 0.4% growth. It expects growth of 3.0% in 2021, up from 1.3% seen earlier.
BREAKING: #Norway's central bank delivers surprise rate cut to 0% in a unanimous decision. Don't envisage making further rate cuts but outlook and balance of risks imply very expansionary monetary policy stance. #Norges
#Norway's central bank lowers its benchmark rate to 0.00%! pic.twitter.com/e0pLjZzaSR
My colleague Richard Partington writes that the Bank of England has sounded the alarm about the slump in the UK economy this year:
The Bank of England has warned the British economy could shrink by 25% this spring and unemployment more than double as the coronavirus pandemic brings the country to an effective standstill.
Leaving interest rates on hold as the economic crisis unfolds, the central bank said economic activity across the country had fallen sharply since the onset of the global health emergency and the lockdown measures used to contain its spread.
Related: UK unemployment to double and economy to shrink by 25%, warns Bank of England
The Resolution Foundation think tank is concerned that the Bank of England predicts such a sharp jump in unemployment, and only a slow recovery in the labour market:
That 14 per cent hit to the economy is equivalent to around £300 billion, or £9,000 for every family in Britain, and shows why the Bank and Government are right to have protected households as much as possible with policies such as the Job Retention Scheme.
While the Bank’s scenario implies the UK economy will return towards its pre-pandemic growth path in 2021, it projects unemployment to remain above its pre-pandemic path until at least 2023 – after reaching a 25-year high of 9 per cent this year.
Stark unemployment forecast from the Bank of England this morning, and expects 25% contraction in the economy in the quarter to June. pic.twitter.com/pHQZPwXHCN
Yael Selfin, chief economist at KPMG UK, fears the UK economy could shrink even more sharply than the Bank of England has forecast.
The Brexit cliff-edge at the end of the year, when the UK-EU withdrawal agreement ends, creates added uncertainty, she writes:
“Despite the stark numbers issued by the Bank of England today, additional pressure on the economy is likely. Some social distancing measures are likely to remain in place until we have a vaccine or an effective treatment for the virus, with people also remaining reluctant to socialise and spend. That means recovery is unlikely to start in earnest before sometime next year.
“Looking at the medium term, beyond the impact of reduced investment, other forces could to be in play dampening future productivity. Supply chains are likely to be reconfigured in light of this crisis, potentially increasing geographical diversification and reducing efficiency in order to increase resilience. ‘Just in time’ operations are also likely to be a thing of the past, further eroding productivity. On the other hand, we could see significant consolidation among SMEs, lifting productivity among the long tail of underperforming businesses.
The only good news today is that the Bank expects this economic bombshell to be short-lived, and for the economy to bounce back rapidly. However, the MPC itself concedes it is flying blind to a large extent, warning that a pandemic like this is “especially difficult to quantify”.
“While the Bank of England did not change its monetary policy stance at today’s meeting, it is surely only a matter of time before they decide to. The 7-2 split on whether to increase asset purchases indicates a continued dovish bias from certain voting members.
With the Bank hoovering up gilts equivalent to those issued since the additional £200 billion in quantitative easing was announced, it will run out of firepower to support government spending within in months. Therefore, expectations will be high for an increase in the purchase target at the next meeting in mid-June.
The Covid-19 pandemic has forced the Bank of England to delay its much-anticipated bank climate stress tests.
The central bank has concluded that UK banks have enough to deal with, without calculating how they are positioned to handle the climate emergency (a key concern for former governor Mark Carney).
“Recognizing current pressures on firms, and in light of the responses to the December 2019 Discussion Paper on the Climate Biennial Exploratory Scenario, the PRC and FPC have agreed to postpone the launch of the exercise until at least mid-2021.
This delay reflects a desire to maintain the ambitious scope of the exercise, whilst giving firms enough time to invest sufficiently in their capabilities to allow them to deliver to a high standard.”
The Bank’s new Financial Stability Report says UK households have entered the lockdown in a stronger position than before the 2008 financial crisis, thanks in part to substantial support including payment holidays on mortgages and credit cards.
However, the Bank warned that the sharp economic downturn would put pressure on personal finances and that it would have to keep a close eye on potential risks that may emerge once those payment holidays expire. That could include a fresh wave of customers attempting to refinance their debt.
There is some good news.... the Bank of England is confident that Britain’s banks can ride out the Covid-19 pandemic, and handle a 14% plunge in GDP this year.
It says the banking sector is sufficiently capitalised to cover losses during the outbreak, especially as the BoE is providing more support to the sector.
Businesses and households will need to borrow to get through this period. We want banks and building societies to expand lending. We have tested the major UK banks. They are strong enough to keep lending, which will support the economy and limit losses to themselves.
We are offering more long-term funding to banks that increase their lending.
Here’s a table outlining the Bank of England’s new Covid-19 scenario.
As you can see, it shows UK GDP shrinking 14% this year, business investment crumbling by 26%, household spending down 14%, and average earnings down 2%:
The Bank of England has produced a 20-minute video, explaining today’s monetary policy decisions and its new scenario for how the UK economy will shrink this year:
Reuters points out that the Bank of England is predicting the worst economic slump in centuries this year -- and a very strong recovery in 2021:
The Bank of England held off further stimulus measures but said it was ready to take fresh action to counter the coronavirus hammering which could cause the country’s biggest economic slump in over 300 years in 2020 before a bounceback in 2021.
The BoE said its Monetary Policy Committee kept Bank Rate at its all-time low of 0.1% and left its target for bond-buying, most of it British government debt, at £645bn.
Bank of England gives a big "V" to economists who think there'll be a lasting hit from the COVID-19 slump.
Illustrative scenario shows 14% drop in GDP in 2020, followed by a rise in 2021 of... 15%! pic.twitter.com/Wf5Z4Rp9Ds
In another startling forecast, the Bank of England predicts that the global economy could contract by 20% this quarter.
It warns that the coronavirus pandemic, and the lockdown measures introduced to slow it, are hitting economic activity extremely hard:
The spread of the virus and the measures taken to protect public health have caused a substantial reduction in activity around the world. Survey indicators such as the output components of PMIs have fallen to record‑low levels since the start of the year, and suggest that many countries have experienced extremely sharp falls in activity.
Bank staff estimate that UK‑weighted world GDP declined by around 4% in Q1 and could fall by over 20% in Q2. World trade has also declined significantly, and is expected to contract by around twice as much as global GDP in 2020. While many major countries have introduced wage subsidy schemes to reduce job losses, unemployment has increased markedly around the world and many more employees are working less than usual.
Despite the government’s efforts, the Bank of England predicts that unemployment will rise sharply in the next few months.
Its new Covid-19 scenario suggests the UK jobless rate could soon spike to 9% - up from 4% at present - even though the government is encouraging firms to furlough staff.
As activity has fallen, the number of people in work has dropped sharply. It is likely that the Government’s Coronavirus Job Retention Scheme (CJRS) has materially reduced the number of redundancies. Early data suggest that applications for furlough have been received from 800,000 companies covering over six million jobs.
The number of people furloughed might be a little lower, though, as some could have more than one furloughed job. While the CJRS has significantly limited job losses, the flow of new Universal Credit benefit claims and early indicators of redundancies suggest that unemployment has risen sharply over the past couple of months. The unemployment rate is expected to rise to 9% in Q2.
The Bank of England has forecast that the UK economy could shrink by 14% this year.
It has drawn up a new scenario, showing how the Covid-19 pandemic will hurt growth.
The spread of Covid-19 and the measures to contain it are having a significant impact on the United Kingdom and many countries around the world. Activity has fallen sharply since the beginning of the year and unemployment has risen markedly.
The illustrative scenario incorporates a very sharp fall in UK GDP in 2020 H1 and a substantial increase in unemployment in addition to those workers who are furloughed currently. Given the assumed path for the relaxation of social distancing measures, the fall in GDP should be temporary and activity should pick up relatively rapidly.
Nonetheless, because a degree of precautionary behaviour by households and businesses is assumed to persist, the economy takes some time to recover towards its previous path. CPI inflation is expected to fall further below the 2% target during the second half of this year, largely reflecting the weakness of demand.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Some early breaking news: The Bank of England has voted to leave UK interest rates at their record lows, at its policy meeting today.
The timeliest indicators of UK demand have generally stabilised at very low levels in recent weeks, after unprecedented falls during late March and early April. Payments data point to a reduction in the level of household consumption of around 30%.
Consumer confidence has declined markedly and housing market activity has practically ceased. According to the Bank’s Decision Maker Panel, companies’ sales are expected to be around 45% lower than normal in 2020 Q2 and business investment 50% lower.
Bank of England offers hope amid Covid-19's grim economic spectacle | Larry Elliott
Threadneedle Street says the economy hasn’t been as bad as this for 300 years – so it can only can get better
It’s hard to be all that cheerful when you are bracing yourself for the biggest annual contraction in the economy since before the South Sea Bubble crisis of 1720, but somehow or other the Bank of England has managed to find some nuggets of hope amid all the gloom.
To be sure, the short-term news from Threadneedle Street was as grim as everybody had expected. Having fallen by 3% in the first three months of 2020, activity is projected to drop by a further 25% in the second quarter and by 14% over the calendar year.
Related: Don't expect a snapback for the UK economy after lockdown is lifted | Larry Elliott
One of the two main definitions of recession in the UK is at least two quarters of negative economic growth. Judged by this yardstick, the UK was last in recession in 2008-09, when there were six consecutive quarters of negative growth.
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Fifth Third Bank shows us just how easy it is becoming for corporations to source all of their electricity from renewables.
Banks should suspend share repurchases for longer
Banks can be a source of stability during the economic and financial turbulence caused by COVID-19. Thanks to important regulatory reforms and better risk management since the global financial crisis, banks have much higher capital and liquidity positions than they had in 2007. Their stronger financial position is allowing the banking regulators to encourage banks…
Bankruptcy and the coronavirus
Less than two months into the coronavirus crisis, and despite the massive infusion of federal funds, a rise in business bankruptcies has already begun. Even if the current efforts by Congress, the Federal Reserve, and Treasury to counteract the economic shutdown are effective, an enormous wave of bankruptcies may come. How effective will the bankruptcy…
Bankruptcy and the coronavirus
Less than two months into the coronavirus crisis, and despite the massive infusion of federal funds, a rise in business bankruptcies has already begun. Even if the current efforts by Congress, the Federal Reserve, and Treasury to counteract the economic shutdown are effective, an enormous wave of bankruptcies may come. How effective will the bankruptcy…
Bank Exam Preparation Tips 2020 at Home: IBPS PO, IBPS Clerk, IBPS RRB, SBI Clerk, RBI, LIC
Bank Exams Preparation Tips 2020: Have a look at important Tips and Strategies for bank exam preparation to fetch recruitment in banks as PO/Clerk/SO. Know details of SBI Clerk 2020, IBPS RRB 2020, IBPS PO 2020, IBPS Clerk 2020, RBI Assistant 2020, LIC AAO/ADO 2020 and other bank exams.
Bank of America to Pay $16.65 Billion in Historic Justice Department Settlement for Financial Fraud Leading up to and During the Financial Crisis
Attorney General Eric Holder and Associate Attorney General Tony West announced today that the Department of Justice has reached a $16.65 billion settlement with Bank of America Corporation – the largest civil settlement with a single entity in American history — to resolve federal and state claims against Bank of America and its former and current subsidiaries, including Countrywide Financial Corporation and Merrill Lynch. As part of this global resolution, the bank has agreed to pay a $5 billion penalty
Justice Department Reaches Settlement with Bank of America to Resolve Allegations of Discrimination Against Recipients of Disability Income
Bank of America N.A. has agreed to maintain revised policies, conduct employee training and pay compensation to victims to resolve allegations that it engaged in a pattern or practice of discrimination on the basis of disability and receipt of public assistance in violation of the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA).
Bank Director Charged with Hiding Foreign Assets
A Boston venture capitalist and director at Boston Private Bank and Trust Company was charged with failing to report his foreign bank account and income to the Department of the Treasury.
Bank of America Agrees to Pay $137.3 Million in Restitution to Federal and State Agencies as a Condition of the Justice Department’s Antitrust Corporate Leniency Program
Bank of America entities have agreed to pay a total of $137.3 million in restitution to federal and state agencies for its participation in a conspiracy to rig bids in the municipal bond derivatives market and as a condition of its admission into the Department of Justice’s Antitrust Corporate Leniency Program.
Bank to Pay $2.2 Million to Settle Allegations of False Claims to Small Business Administration
Saehan Bank has agreed to pay the United States $2.2 million to settle allegations arising under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act with respect to a Small Business Administration (SBA) loan, the Justice Department announced.
Banks an early drag on stocks
The sharemarket opened lower as weak banking stocks failed to support a strong rally in energy shares.
Banks defer repayments on more than 600,000 loans, Macquarie halves dividend
Australian shares rise, including Macquarie Group, despite slashing its dividend. The Australian Banking Association say a further 100,000 loans were deferred over the past week.
Bank regulator asks ME to explain why it took money from customers' redraw accounts
The financial regulator has asked ME Bank to explain why it has taken cash from accounts linked to its customers' home loans to reduce the risk of mortgage default.
Bank of England warns coronavirus could cause biggest economic slump in 300 years
The Bank of England said the economy could contract by as much as 3% in the first quarter.
Bank holiday dates 2020: When is the next national holiday in the UK?
There isn't long to wait until the next Bank Holiday
Bank of England warns UK faces deepest recession for centuries
The UK is facing the deepest recession not just in living memory but for centuries, the Bank of England has warned
Banksy's Girl with a Pierced Eardrum given face mask in nod to coronavirus pandemic
A Banksy mural in Bristol has been given a face mask in a coronavirus-themed makeover.
Bank of England chief Andrew Bailey warns against early easing of coronavirus lockdown
The economy would be hit by a premature end to the lockdown which would also "damage people's confidence very severely", Bank of England governor Andrew Bailey has warned.
Banksy creates new work in his bathroom while under coronavirus lockdown
Banksy has revealed his latest work - a series of rats causing mayhem in his bathroom - during the coronavirus lockdown.
Bankruptcy court approves Neiman Marcus' plea to access financing
U.S. luxury department store chain Neiman Marcus Group said on Friday it received court approval to access $675 million of its debtor-in-possession financing, which will allow continuity of the company's business during Chapter 11 bankruptcy proceedings and enable it to pay employees and vendors.
Bank of England predicts worst slump in 300 years
The Bank of England says the UK faces its worst slump in 300 years, but on Thursday held off from any moves on rates or bond buying. Julian Satterthwaite reports.
Bankruptcy court approves Neiman Marcus' plea to access financing
U.S. luxury department store chain Neiman Marcus Group said on Friday it received court approval to access $675 million of its debtor-in-possession financing, which will allow continuity of the company's business during Chapter 11 bankruptcy proceedings and enable it to pay employees and vendors.
Banksy's 'Girl with a Pierced Eardrum' gains a coronavirus face mask
Banksy's "Girl with a Pierced Eardrum" has been updated for the coronavirus era with the addition of a blue surgical face mask.
Bankruptcy court approves Neiman Marcus' plea to access financing
U.S. luxury department store chain Neiman Marcus Group said on Friday it received court approval to access $675 million of its debtor-in-possession financing, which will allow continuity of the company's business during Chapter 11 bankruptcy proceedings and enable it to pay employees and vendors.
Loans from My Neighbors: East Asian Commercial Banks, Banking Integration, and Bank Default Risk
Banking integration lowers bank default risk in recipient countries.
Loans from My Neighbors: East Asian Commercial Banks, Banking Integration, and Bank Default Risk
Banking integration lowers bank default risk in recipient countries.
Bank of Jamaica Swap Results_ 8 May 2020
MARKET NOTICE 08 May 2020 Bank of Jamaica FX Swap Arrangement Report for Week Ended: 08 May 2020 For...
Bank in focus as comedian’s feud fuels privacy row
A DISPUTE between a comedian and his former employer ignited social media yesterday when it turned into an issue relevant to everyone — privacy protection.
Banking on AI: NerdWallet’s Recommendation Engine Matches Customers with Relevant Financial Products
Dating apps may get all the press, but NerdWallet has been refining the art of financial matchmaking for more than a decade. The company provides its members with sound financial advice generated by machine learning algorithms. But as computing has advanced, so has NerdWallet’s ambition. Now the company is using AI to better match casual Read article >
The post Banking on AI: NerdWallet’s Recommendation Engine Matches Customers with Relevant Financial Products appeared first on The Official NVIDIA Blog.
Demystifying bank solar asset management with U.S. Bank, Wells Fargo, and kWh Analytics
Bank asset management is known to be an opaque subject. Thankfully, Diana Weis and Sarah Disch, each co-heads of the Solar Asset Management groups at their organizations, U.S. Bank and Wells Fargo Bank respectively, shared their expertise with me at SAMNA 2019. They each have over a decade of experience in solar finance. Here are three key takeaways bank asset management experts Weis and Disch shared:
NRIs Handbook for Banking and Investments
Banknet releases 6th Edition of NRIs Handbook and Guide for Banking, Investments