Your level-headed briefing on how the coronavirus epidemic is affecting the markets, global business, our workplaces and daily lives, with expert input from our reporters and specialists across the globe.
For updates visit our live blog. Please send your reactions and suggestions to [email protected]. We would like to hear from you.
The FT is offering a free 30-day trial to Coronavirus Business Update, which includes access to FT.com. Please spread the word by forwarding this newsletter to friends and colleagues who you think would find it valuable. And if this has been forwarded to you, hello. Please sign up here
Latest news
Mulberry, the British luxury handbag maker, said it planned to cut a quarter of its workforce as demand slows in the wake of the coronavirus crisis
Moscow is to begin lifting one of the world’s strictest coronavirus lockdowns starting on Tuesday and aims to return to near-normal by the end of the month
France’s “temporary unemployment” scheme to avert mass bankruptcies and lay-offs is expected to last “one or two years”, according to its labour minister
Emerging economies take hit from coronavirus
Today’s World Bank report highlights the economic toll on emerging and developing countries as the coronavirus crisis tips millions of people into extreme poverty and leaves “lasting scars” in its wake.
While richer countries are mostly past the worst stages and are planning the gradual reopening of their economies, many of their poorer counterparts are now at the centre of the pandemic. The economic hit is likely to be most severe “where there is heavy reliance on global trade, tourism, commodity exports and external financing”, the bank said.
Gross domestic product in emerging markets was forecast to shrink this year by 2.5 per cent — the first time they will have gone backwards in 60 years. Latin America and the Caribbean — at present accounting for 44 per cent of new coronavirus deaths — will also be the hardest hit economically with a 7.2 per cent drop in GDP.
The IMF and central banks have helped stabilise the financial system but global efforts should now turn to the long-term economic effects of the pandemic on poorer nations, the FT Editorial Board argues.
“International co-operation has already helped ameliorate a potential financial crisis. Now it should be used to prevent an economic one,” it says.
Markets
The pandemic-induced collapse in demand for oil was laid bare as BP said it would cut 10,000 jobs — 15 per cent of its global workforce — as the crisis accelerated the shift to a leaner business under its new chief executive. The announcement came on the same day that Saudi Arabia’s oil minister said the country’s decision to increase crude export prices was a sign of oil demand “thriving”.
Analysts and investors are raising concerns over the US Federal Reserve’s new corporate bond-buying programme, which is yet to make a single purchase despite indications that it would launch in the first few days of June. The Fed announced the move on March 23, fuelling a sharp rally in the market and opening up the floodgates for companies to begin issuing new bonds.
Wall Street was close to turning positive for the year as the unexpected rise in US employment on Friday continued to drive the rally in stocks. “What is clearly happening is the excitement of reopening is allowing a lot of these companies that have been casualties of Covid to come back and come back in force,” said a former hedge fund manager. US finance editor Robert Armstrong is wary: “We need to see more swallows before we declare it summer. The market, however, is already acting like it is the fourth of July.”
Business
The date for England’s pubs and restaurants to reopen may be brought forward from July 4 to June 22 as ministers attempt to “save summer” and give hope to the 3.5m hospitality workers whose jobs could be at risk. Business secretary Alok Sharma is creating five new groups to advise on how to hasten the recovery, covering innovation, green technology, start-ups, skills and inward investment. New UK quarantine rules, which require overseas arrivals to isolate for 14 days, came into force this morning despite opposition from airlines.
The 338 vessels making up the global cruise ships industry are docked and Carnival, the world’s largest cruise company, is losing $1bn a month. The 2020s were meant to be a boom decade for cruises, explains our Big Read, but coronavirus could mean the end of the line for an industry blamed by many for spreading the virus.
The collapse of UK sandwich maker Adelie Foods has thrown a spotlight on the £8bn a year industry, which has seen sales fall sharply as regular customers work from home and many outlets remain closed. Many of the country’s estimated 12,000 to 15,000 small sandwich bars are struggling, especially those with high rents. “Even if we do start returning to work a few days a week, people will start making their own stuff . . . people have got used to scratch cooking,” says an executive at the Leon chain.
Global economy
German industrial production — driven by a collapse in output by the auto industry — fell a record 18 per cent in April even though many factories have managed to stay open during the pandemic. The plunge was enough to dent European investor confidence that there would be a swift recovery from the pandemic.
Colombia’s president Iván Duque, in a video interview, explains how his country has kept infection and death rates relatively low compared with other Latin American nations such as Brazil, Chile, Ecuador, Mexico and Peru, and talks about his plans for reopening what was Latin America’s fastest-growing economy.
Abattoirs across the world supplying the $1.4tn global meat market have long been criticised over health, animal welfare and environmental issues, but the disproportionate amount of coronavirus infections within the industry has again shone a light on their working practices.
Trade Secrets, our newsletter about trade and globalisation, went on a mission to find toilet roll. The pandemic has emptied supermarket shelves. But why can’t manufacturers just divert unused office paper? Watch Aime Williams’ video here and read the special report: Supply Chain Disruption
Readers respond
The Ferryman comments on an article by leisure industries reporter Alice Hancock about how drive-in events are filling a cultural void.
The UK needs to reduce road traffic levels not increase them with stupid ideas like this.
In recent weeks quieter roads and closure of parks to cars in my area has led to a huge increase in people getting out cycling and walking. This has a big positive effect on people’s health.
I cycle almost every day to get around locally and the one thing that puts me off is danger from vehicle drivers.
Get in touch
How is your workplace dealing with the pandemic? And what do you think business and markets — and our daily lives — will look like after lockdown? Please tell us by emailing [email protected]. We may publish your contribution in an upcoming newsletter. Thanks
The essentials
New Zealand said it had stopped transmission of coronavirus and would now focus on reopening its economy. The government introduced a strict lockdown that closed businesses and schools, limited people’s movements and quarantined people arriving from overseas. The country also benefited from its remote location. Pacific island nations are pleading to join the Australia-New Zealand “travel bubble”.
Hong Kong’s government relaxed quarantine rules for top executives from locally listed companies travelling between the city and China as part of its push to revive business activity. China has recently allowed more foreign airlines to resume international flights into its cities and business travel to resume from Singapore.
Will the world of work look different after the pandemic? Will there be, for example, an age divide where younger people with fewer health risks feel more comfortable going into offices and visiting bars and restaurants after work, while elder workers prefer to stay at home? Work and careers editor Isabel Berwick answered readers’ questions.
Final thought
With the world in lockdown, the FT’s How to Spend It magazine asked readers to send in images that encapsulated “home”. Here are some of their favourite submissions.
