WATCH: Economic damage from COVID-19 pandemic likely to be lasting
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.
Banks hit by grim UK economic outlook
The FTSE 100’s (^FTSE) biggest banks, including Lloyds (LLOY.L), Barclays (BARC.L), Natwest (NWG.L) and HSBC (HSBA.L) have taken a hit on Thursday following UK chancellor Rishi Sunak warning on Wednesday that the “economic emergency” caused by COVID-19 was only just beginning as he delivered the government’s spending review in parliament.
The forecasts from the Office for Budget Responsibility (OBR) unveiled by Sunak showed that the UK economy will contract by 11.3% in 2020, representing the biggest yearly fall in over three centuries. He also highlighted the “scarring” effect of the coronavirus crisis that will likely leave the economy permanently smaller than its forecast path before the virus hit. This includes the UK not returning to pre-crisis output levels until the final three months of 2022.
This depressing outlook has sent Lloyds shares down 3.8% at around 10am in London, while Barclays fell 2.5%, NatWest was lower 3.5% and HSBC was hit 0.2%.
Two UK pub owners slash jobs
Two prominent UK pub owners have announced job cuts as they continue struggling with the impact of COVID-19.
The company said in a trading statement on Thursday that like-for-like sales over the period declined by 3.5%. A “strong start to the year” was superseded by the subsequent impact of a “prolonged period of enforced closure and social distancing restrictions.”
UK pub owner Fuller, Smith & Turner (FSTA.L) also said on Thursday that it would be shedding one in five jobs over the past year, as the UK pub and hotel group battled coronavirus restrictions on trade.
The company announced it had swung to a loss of £22.2m ($29.6m) on an adjusted basis in its financial year to 26 September. It had made profits of £17.9m a year earlier.
The pound was lower against the US dollar and euro on Thursday morning, amid mounting fears about the state of the UK economy and little sign of progress in Brexit talks.
Both pairings remained near two-month highs, suggesting investors were consolidating rather than exiting positions.
European markets are extending the global rally, though gains are muted following softer US economic data from overnight.
Less political uncertainty as the US presidential transition continues and COVID-19 vaccine progress has strengthened market action. Though, expect the volume of overall activity to fall on Thursday as Americans celebrate Thanksgiving.
-With additional reporting by Oscar Williams-Grut