Joint research by top institutes in Germany predict that the country’s economy will shrink by 9.8% in the second quarter. That is its biggest decline since records began in 1970 and more than double the decline seen during the global financial crisis in 2009.
European stocks ended a short two day winning streak, and closed in the red
The UK’s largest banks (including RBS, HSBC and Standard Chartered) confirmed that executives would be waiving bonuses and/or taking pay cuts in light of the Covid-19 outbreak.
That’s all from us today. I’ll be back tomorrow from 8am with the latest business news. Stay safe, everyone. -KM
The Treasury Committee is demanding urgent action from the chancellor to help newly self-employed, graduates, those with savings and others who have who have fallen through the gaps in income support measures announced so far.
Mel Stride MP, chair of the Treasury Committee, said:
Telling self-employed people to access Universal Credit is not enough – especially given the issues with the five-week wait. Many people – self-employed or not – are having issues with claiming UC and contacting the DWP.
He added that the UC system also unfairly penalises people for having larger savings.
Currently the biggest bar to many will be the fact that anyone with savings of £16,000 or more cannot claim, except for jobseeker’s allowance of £74.35 a week, and will receive no help with their rent.
The committee listed six groups of people it said have fallen through the gaps in the supports announced so far.
People who work via Personal Service Companies
People falling the wrong side of the £50,000 threshold for the self-employed scheme
People who are newly self-employed
Graduates
People who started work, or were due to start work, after 28 February cut-off date
Workers who have taken time off for maternity/paternity, as they will have lower average self-employed incomes and are therefore assessed for less by HMRC
Standard Chartered and HSBC have followed suit with their own executive pay cut announcements.
Over at HSBC:
Chairman Mark Tucker will be donating all of his 2020 pay of £1.5m to charities helping with Covid-19 responses.
Meanwhile, the CEO and CFO are giving up 25% of their fixed pay for 6 months. Here’s what that looks like.
HSBC chief executive Noel Quinn is giving up £160,000 and will waive his annual cash bonus for 2020 worth up to £1.24m. (But for context, Quinn was set to take home a £3m in fixed pay alone for 2020 before bonuses.)
HSBC CFO Ewen Stevenson will give up around £93,000 and a cash bonus worth up to £706,000.
Standard Chartered says:
Both its CEO and CFO will waive cash bonuses for 2020 (which to be fair is really just in line with Bank of England guidelines announced last week.)
However, they say they will also make “significant personal donations” to a Covid-19 assistance fund set up by the bank (though it has not clarified how much that will be).
Royal Bank of Scotland’s CEO is giving up a quarter of her remaining fixed pay for the year and will waive her bonus for 2020.
It means Alison Rose will be giving up around £419,000 of her £2.2m fixed salary, plus a bonus worth up to £1.9m.
We don’t have a comparable figure for what she earned last year, given that she took over as chief executive in November 2019. However, the last full year pay package claimed by her predecessor Ross McEwan was worth around £3.6m for 2018.
Rose said in a statement:
In the current environment, many of our customers are worried about their jobs and their businesses and, in recognition of this, I have taken these decisions on my own pay.
The 25% salary sacrifice, which is also being matched by RBS chairman Howard Davies, will be donated towards the National Emergencies Trust (NET) Coronavirus Appeal.
Davies will be giving up around £140,000 of his £750,000 fixed pay.
It’s the latest bank to announce salary sacrifices, following similar moves by Barclays and TSB yesterday.
Switzerland is looking to ease its coronavirus restrictions from the end of April in order to avoid facing its worst recession on record.
The Swiss government’s forecasts show the country’s economy could contract by as much as 10.4% this year due to the outbreak. That is a stark downgrade from previous forecasts of a 1.5% contraction.
This picture taken on April 5, 2020 shows a border between Switzerland and France closed by concrete blocks and adorned with Swiss flags in Presinge near Geneva as the country remains in lockdown to curb the spread of the novel corona virus, COVID-19. Photograph: Fabrice Coffrini/AFP via Getty Images
The downgrade, from the government’s previous forecast of a 1.5% contraction, would occur if there was a prolonged shutdown in Switzerland and abroad, triggering bankruptcies and job cuts.
In this L-shaped scenario, there would only be a weak recovery with the economy forecast to grow by 3.4% in 2021.
In a second, v-shaped-scenario, the Swiss government reckoned with a contraction of 7.1% before a stronger bounceback come 2021.
Channel 4 is to make £245m in savings, mostly though a big cut to its programming budget, and furlough almost 100 staff to weather an ad slump due to the coronavirus.
The broadcaster, which is publicly-owned but is funded mostly by TV advertising, is facing a TV ad slump of 50% over the next two months.
Channel 4’s top management, including chief executive Alex Mahon and director of programmes Ian Katz, are to take a 20% pay cut and will not take bonuses this year - although performance targets will not be reached in any case.
The broadcaster said that it intends to cut £150m from its £660m programming budget, admitting that it will mean fewer new shows on screens this year.
It is also seeking to make £95m in additional savings, including through a hiring freeze, cutting marketing budget and delaying investments.
In addition, Channel 4 has said it will draw down an emergency £75m revolving credit facility for the first time, after agreeing the measure with the government.
Mahon said:
As a commercially funded business the Covid-19 outbreak has had a severe impact on our advertising revenues.
And so we are taking action now to manage our costs appropriately and ensure that we both protect our staff and our ongoing ability to serve our audience.”
Beleaguered hospitals provider NMC Health says it expects to be placed into administration “in due course.”
That is despite efforts to bat away a court application by one of its largest lenders, Abu Dhabi Commercial Bank, for the company to appoint administrators who it hopes will fully investigate the group.
NMC Health has been at the centre of an accounting scandal after the company revealed last month that it had nearly $3bn more debt than previously disclosed.
There has also been a lack of transparency over who ultimately owns the shares held by the company’s billionaire co-chairman and largest shareholder, Bavaguthu Raghuram Shetty.
In a very legalese-laden regulatory statement on Wednesday, NMC said:
Notwithstanding strenuous efforts to address creditors’ concerns, it has not been able to secure their alignment and support and has been advised by its counsel that it is not in a position to oppose the application successfully. Accordingly, it expects the company to be placed into administration in due course.
A medical worker wearing protective equipment and mask collects a mouth and nose swab from a person sitting inside a car during a drive-through coronavirus (Covid-19) test in Rome. Photograph: Anadolu Agency/Anadolu Agency via Getty Images
Big pharma is teaming up with the government in an effort to produce millions of testing kits, the UK’s health department has said.
Astrazeneca and GlaxoSmithKline have been creating new national business collaborations, Reuters reported citing the health department.
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