Daily Business Live: Bank rate cut; airport expects zero demand
4.45pm: Market close
The FTSE 100 ended the day at 5,151.61, up 71.03 points (1.4%) and close to its day high (5,181.04). The day low was 4,942.37.
The FTSE 100 has responded positively to the Bank of England’s stimulus package. The index is trading at 5,140.72, up 60.14 points (1.18%).
3.15pm Edinburgh Airport
Edinburgh Airport says it is expecting a period of zero or close to zero passengers and has put a plan into action to ensure it remains open and operational during the coronavirus outbreak.
3pm: Bank acts
The Bank of England has cut the interest rate to 0.1%, its lowest ever. It is also injecting a further £200 billion into the economy.
Last week, the Bank announced a 0.5% cut in rates to 0.25% and a package of measures to help businesses and individuals cope with the economic damage caused by the virus.
2pm: Lloyds AGM
Lloyds Bank is to hold its AGM in Edinburgh despite government advice against large gatherings and the cancellation of other big events
The FTSE 100 has lost all this morning’s gains and is now trading 112.22 (2.2%) down at 4968.36.
11.30am: Derek Mackay
Scotland’s former finance secretary, Derek Mackay, will not face criminal charges over social media messages he sent to a 16-year-old boy.
Police Scotland said it had concluded its enquiries and “there is nothing to suggest that an offence has been committed”.
Mr Mackay resigned on 5 February on the eve of the Scottish Budget.
A spokesman for the SNP said: “We understand Derek Mackay is currently under medical supervision. He remains suspended from the SNP.”
10am: EIE postponed
Tech investor event EIE, due to take place in April, has been re-scheduled.
9.30am One Savings Bank
Shares in One Savings Bank plunged by more than a quarter fter the specialist lender declined to issue full-year guidance over coronavirus-related uncertainty.
The fall came despite it posting a strong set of results and offering assurande on its “robust ” balance sheet.
Statutory profit before tax increased 14% for the year ending 31 December to £209.1m. Its statutory net interest margin — a key measure of profitability — was 2.43%.
Chief executive Andy Golding said: “The UK and global economies are currently experiencing unprecedented uncertainty stemming from Covid-19.
“Whilst we entered the year with a robust pipeline, strong application levels in our core businesses and stable margins, it is too soon to say what the impact will be and we therefore consider it imprudent to provide forward guidance for 2020.”
“We enter this period of uncertainty as an enlarged business with the strength of our combined lending and funding franchises, robust capital position, secured loan book and strong risk management capabilities,”
Shares at 9.30 were down 24% at 160p.
8.40am Direct Line
Britain’s biggest motor insurer Direct Line has halted its £250 million share buyback programme and said it expects a jump in travel insurance claims.
The company said that travel claims related to the virus leapt from £1m on 3 March to £5m on 15 March.
Motor insurance claims could fall temporarily due to the coronavirus outbreak, it said.
The owner of Churchill, Green Flag and Privilege brands added that its capital position remains strong, with the ultimate impact of virus-related claims on its travel business still too early to estimate.
Fashion retailer Joules Group cancelled its interim dividend as it reported lower footfall because of the coronavirus outbreak..
Joules warned that the pandemic will hit its near-term profitability and said it was reducing its expenditures by cutting non-critical costs and spending.
The company said cancelling its dividend will save it £700,000, adding that it has £16 million cash headroom and a “strong relationship” with its bank, as well as with its founder and major shareholder, Tom Joule.
Luxury goods chain Burberry has warned that sales have collapsed in the last few weeks due to the impact of coronavirus.
Since the end of January when China began to impose restrictions sales have dropped by about a half.
Since the virus spread to Europe and the US causing widespread lockdowns, this has accelerated to declines of between 70-80%.
Burberry added that trading in Mainland China has started to improve with the reopening of most of its stores there, but Europe, Africa and the Americas have fallen materially in recent weeks.
“More than 60% of our stores in EMEIA and around 85% of our stores in the Americas are currently closed with those still open operating with reduced hours and with very weak footfall,” the group said in a statement.
In total, around 40% of its stores are closed and sales overall in the final quarter of the year to end-March 2020 are down by 30%.
Marco Gobbetti, chief executive, said:” Since our February update, the material negative effect of COVID-19 on luxury demand has intensified and is now impacting the industry in all regions.”
The FTSE 100 makes further gains, up 74.98 points (1.48%) at 5,155.56. The upward move follows the European Central Bank (ECB) last night announcing plans to buy €750bn of bonds to fight the economic impact of the coronavirus pandemic.
The FTSE 100 has opened up 28.13 points (0.55%) at 5,108.71.
The boss of Next has warned that the retailer faces a “very significant drop in sales” as a result of the effect of coronavirus on the business.
Lord Wolfson said online sales were “likely to fare better” than the shops, but would also suffer “significant losses”.
“People do not buy a new outfit to stay at home,” he added.
Potential measures to combat the current challenge include the suspension of the buyback programme, the delay of discretionary capital expenditure, and, if necessary, the deferral of the August dividend.
“Beyond that we, of course, have the option to suspend rather than delay dividends.”
6.40am Thomas Cook
The collapse of Thomas Cook will cost taxpayers at least £156m, according to the National Audit Office.
It said the Department for Transport (DfT) agreed to pay around £83m towards the cost of bringing home Britons stranded abroad due to the holiday firm’s failure.
The report also showed the government spent £58m in redundancy-related payments for former Thomas Cook employees. It also spent an additional £15m to close and liquidate the failed business.
The New York Stock Exchange will temporarily close its trading floors and move fully to electronic trading from Monday after an employee and a trader were tested positive for the coronavirus.