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Latest news
Intu, the UK’s largest shopping centre owner with 14 locations and three joint ventures, has entered administration, becoming the latest casualty of the country’s struggling retail sector.
The World Health Organization said the international effort to fight coronavirus would need $31.3bn over the next year to deliver tests, treatments and vaccines. Barely one-tenth of the sum has been gathered so far.
Mortality in France has returned to normal with no ‘excess deaths’ recorded between May 1 and June 15, according to the national statistics institute Insee
Lockdown debate intensifies
Those who think it too soon to ease coronavirus restrictions have been rewarded with plenty of ammunition from around the world over the past few days.
From Bournemouth to Brazil, beaches have been mobbed with little thought for social-distancing guidelines, English police have reported a rise in public order incidents, and tennis star Novak Djokovic came to realise that holding an international tournament during a global pandemic was not such a great idea after all.
Bournemouth beach on the English coast was packed on Thursday despite pleas for people to stay away © Finnbarr Webster/GettySome US states in the south and west have already reversed course after a spike in new infections. Texas today ordered the closure of bars and limited social gatherings — followed by similar moves in Florida where the state recorded a one-day record for new infections — denting investor enthusiasm on Wall Street in the process.
Some big US companies including Apple have also changed tack and reversed reopening plans. A new warning from the Centers for Disease Control and Prevention that the number of infections could be 10 times higher than thought because of the number of asymptomatic cases will also give cause for concern.
Tensions over the speed of reopening can also be seen in air travel, where there is a strong contrast between the ultra-cautious approach in Asia and that of Europe, where infection levels are much higher. European governments have gone beyond restarting business travel and are trying to reinstate tourist flights for the summer holiday season. The UK is negotiating “travel corridors” with Europe that would allow passengers to avoid quarantine restrictions. Plans with up to 10 countries could be announced on Monday.
The UK hospitality industry is hoping, however, that many Britons opt for “staycations” instead. It certainly needs the money: FT economics editor Chris Giles says the pandemic’s effect on tourism has been so bad that the sector should benefit from a short-term VAT cut. Tourist businesses also face the extra costs of adjusting their services to social-distancing guidelines, he notes.
There is one type of business, however, that is doing very well out of Britons’ eagerness to salvage their summer: fraud. Banks have issued a warning over holiday scams involving fake listings, airline refund offers and travel deals, as criminals capitalise on the confusion around coronavirus travel restrictions.
Track governments’ progress on lifting coronavirus restrictions with our interactive tool.
Markets
The lowest-rated companies in the US are struggling to raise much-needed cash despite a resurgent market for selling bonds, writes US capital markets reporter Joe Rennison. Higher-quality companies have been helped by the Fed’s bond-buying programme but lower-rated and smaller companies are viewed as vulnerable to the downturn.
Energy reporter Myles McCormick detects growing anger from investors over the size of payouts to oil company bosses during such a testing time for the industry. “Corporate governance in the [exploration and production] world has historically been atrocious and it continues to be atrocious,” said a private equity manager. “Management gets paid when the share price goes up, when the share price goes down and when the company goes bankrupt.”
Gold prices hit a near-eight-year high this week as investors looked for a safe place to put cash at a time of low bond yields and expectations for a rise in inflation. Analysts said the rally reinforced the impression that investors were getting nervous over the outlook for global trade and the fight against coronavirus.
Business
The US Federal Reserve said after the close of trade on Thursday it would cap share buybacks and dividends by America’s biggest banks after stress tests showed the pandemic could trigger $700bn of loan losses and push some lenders close to their capital minimums. The FT’s Lex column said the decision was the right one.
Virgin Australia, one of the first big airlines to collapse because of coronavirus flight bans, was bought by Bain Capital. Virgin will restart operations in September with up to 6,000 of its 9,000 employees and 60 to 70 aircraft operating. The Dutch unit of Air France-KLM received a €3.4bn support package backed by its home state, following €7bn of rescue funding for the French part of the airline from Paris. Orly airport in the French capital opened today after a three-month closure.
Richard Waters, US west coast editor, says the work-from-home revolution, long-talked about but now a reality because of the pandemic, is only just getting into gear. Changes go beyond remote working to making workers more productive by breaking down barriers within an organisation, and between organisations, he writes. Working from home could also help address the UK’s regional inequalities, writes reporter Antonia Cundy.
Global economy
Christine Lagarde, European Central Bank president, warned that the economic recovery would be “sequential and restrained” as households save instead of spend while some hospitality businesses suffer “irredeemable” damage. Today’s batch of indicators were, however, largely positive, showing French consumer confidence rebounding, German companies less pessimistic about hiring and a jump in Spanish retail sales.
Global trade in goods dropped 12 per cent in April compared with the previous month, the largest fall since records began in 2000. The eurozone was the hardest hit with overall trade volumes down 20 per cent, followed by the US at 17 per cent. Emerging Asia, which includes China and India, fell 6 per cent. Listen to our podcast on how the pandemic offers us the chance to reset the global food system.
Indian fuel prices have risen for 19 consecutive days as the government tries to compensate for the cost of the pandemic. Although global oil prices have fallen, the cost at the pump has been inflated by a range of new taxes, which now account for more than half of the price paid by consumers. Pakistan, under similar financial pressure, is trying to renegotiate with China over costs for power projects, which it alleges were inflated by billions of dollars.
Readers respond
Shelby Mustang comments on our story about sandwich chain Pret A Manger slashing rent payments to landlords.
When my office in the City reopens after the summer I will go in two days initially and then no more than three for the foreseeable. I will cycle there and back and I will take lunch with me or if viable use the canteen when it reopens. Public transport and convenience food are both out of the question until spring next year and then we will see where we are.
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 covid@ft.com. We may publish your contribution in an upcoming newsletter. Thanks
The essentials
Columnist Simon Kuper examines which towns and cities will be post-pandemic winners. An “urban theorist” sees cities generally thriving but with younger populations than before, more housing and fewer offices and shops. Middle-aged former office workers are the most likely to leave, but wherever they go, the baristas, hairdressers and plumbers are sure to follow.
Hannah Murphy, an FT tech correspondent in San Francisco, relates her experience of lockdown among the tech bro community. “The earnestness, sincerity and self-belief that build start-ups and internet monopolies morph into a paranoid survivalist instinct when things look grim,” she writes.
Watch our interview with the Wellcome Trust’s Jeremy Farrar on the hunt for a Covid-19 vaccine, preventing “vaccine nationalism” and the lessons learned so far from coronavirus. It forms part of our series of video interviews with global experts about the pandemic.
What do we do about tipping in an increasingly cashless society — and as cash handling is discouraged because of the fear of infection? Our Lex business opinion column looks at how technology may solve the problem.
Final thought
Thanks to all those who sent in suggestions for summer reading essentials to lift and divert us from a pretty miserable 2020. Here are the favourites of FT writers and critics — from politics, economics and history to art and food.
© Angelina BirkettSource: Economy - ft.com
