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Thursday update

Daily Business Live: Record group sales fall; BT dividend held

4.45pm: London close

Investors had already priced in weak economic forecasts and shrugged off the dire Bank of England report, instead focusing on the steady return to work and rising oil prices. Brent crude oil firmly breached the 30-dollar mark and it had gained 4.5% shortly after markets closed in the UK.

The FTSE 100 fell just short of 6,000, closing at 5,935.98 +82.22 (1.40%).

2pm: Rangers dossier dismissed

Ibrox stadium

Rangers’ much-anticipated ‘dossier’ into alleged wrongdoing by the SPFL has been dismissed by the authorities as “lacking a single shred of evidence”.

Full story here

1.40pm: Help for house builders

House builders will be able to apply for short-term loans of up to £1 million from the Scottish Government to support them through the coronavirus (COVID-19) outbreak.

Full story here

12.40pm: Sturgeon says lockdown should be extended

Nicola Sturgeon said the latest assessment on the coronavirus “leads me to conclude that the lockdown must be extended at this stage.

“Together we are making really significant progress with efforts to get this virus under control.”

Full story here

9.30am: Chinese exports rise

Better-than-expected data from China took the markets by surprise and helped to stabilise earlier declines in parts of Asia and also gave support to the FTSE 100.

“Exports from China rose 3.5% in April year-one-year versus expectations for a sharp decline, thus leading investors to speculate that the country could quickly recover from the pandemic,” says Russ Mould of AJ Bell.

Mining and oil shares rallied on the FTSE as investors bet that commodities demand could soon improve as China gets back to work. Anglo American, Royal Dutch Shell, BHP and Rio Tinto were among the top risers on the UK market. The FTSE 100 traded 0.4% higher at 5,878.

European markets also pushed ahead and the pound gained 0.5% against the US dollar to $1.2398.

8.15am: London open

London Stock Exchange

The FTSE 100 rose on hopes the UK lockdown will shortly ease despite a warning from the Bank of England on the impact of coronavirus on the UK economy.

The FTSE 100 was trading at 5,872.27 +18.51 (0.32%).

7.30am: Bank forecasts ‘shrinking’ economy

The Bank of England has warned that the coronavirus pandemic will push the UK economy was on course to shrink by 14% this year.

Scenarios drawn up by the Bank to illustrate the economic impact said Covid-19 was “dramatically reducing jobs and incomes in the UK”.

Policymakers voted unanimously to keep interest rates at a record low of 0.1%.

7am: Reach sales plummet

Record and Express

The owner of the Daily Record, Express and Mirror, said since mid-March there have been declines in circulation sales, falls in print advertising revenue at a national and local level, reduced printing requirements from third parties, impacts from cancelled events and a reduction in digital yields due to lower advertising demand. 

In the four months to the end of April group revenue fell 13.1% with print revenue down 15.8%, while digital revenue grew by 4.7%.

The situation worsened in April with group revenue down by 30.5%, print revenue down by 31.8% and digital revenue falling 22.5%, with higher page volumes not able to offset declines in advertising yields.

While there has been some stabilisation in trends, circulation remains significantly below pre-COVID-19 levels and advertising remains “very challenging and uncertain”, with regional advertising particularly impacted. 

There were 42 million online users across the UK in March, ensuring Reach retained its position as the fifth largest UK online property.  Average daily app users in April rose by 47% to 674,000.

The group continues to have access to sufficient liquidity. 

7am: Virgin and O2 confirm tie-up

Virgin Media and O2 are to merge to create a £31 billion media and telecoms giant, their parent firms have announced.

Full story here

7am: BT suspends dividend

BT has suspended its final dividend and said revenue slipped 2% to £22.91 billion in the year to 31 March, while pretax profit fell 12% to £2.35bn from £2.67bn.

“In order to deal with the potential consequences of Covid-19, allow us to invest in FTTP and 5G, and to fund the major 5-year modernisation programme, we have also taken the difficult decision to suspend the dividend until 2022 and re-base thereafter,” said Chief Executive Philip Jansen.

BT plans to resume dividends in the 2022 financial year at an annual rate of 7.7p. For the 2019 financial year, BT paid out 15.40p.

7am: British Airways

British Airways owner IAG said chief executive Willie Walsh would delay his retirement until September as the company battled the impact of coronavirus pandemic and warned of a “significantly worse” second quarter.

The company is deferring the delivery of 68 aircraft as it forecast passenger demand not recovering before 2023.

IAG also said that flights could resume in July “at the earliest, depending on the easing of lockdowns and travel restrictions around the world”.

First quarter losses came in at €535m compared with a profit of €135m a year ago.

Today’s top Daily Business headlines

Appointedd boosted by solution to retail queues

Debenhams’ Silverburn store one of five closing

Jenrick and Sturgeon in conflict over building sites

Snappy Shopper now UK-wide after Spar deal

Third of pub and restaurant owners plan to shut sites

£75m aid to help universities cope with lost income

20% rise in car traffic since lockdown imposed

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