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Tuesday update

DB Live: Shell; TM Lewin closures; BoE chief’s forecast

4.45pm: London close

London stocks closed lower after the release of weaker-than-expected GDP figures and amid ongoing concerns about the coronavirus pandemic.

The FTSE 100 ended the session 56.03 points down (0.9%) at 6,169.74

4.30pm: TM Lewin shuts stores

About 600 shopworkers will lose their jobs at shirtmaker TM Lewin as the company closes all of its 66 shops.

A firm hired to restructure the menswear company said it was switching all sales to the internet in a bid to save the brand.

The news comes weeks after the 122-year-old Jermyn Street shirtmaker was bought by Stonebridge Private Equity through its subsidiary Torque Brands.

The new owner said today that the future of the entire retail sector was facing a “very real threat.”

Harveys in administration

Furniture retailer Harveys has fallen into administration, with the immediate loss of 240 jobs and hundreds more in danger. 

All Harveys stores will continue to trade for the time being as administrators from PwC look for a buyer for the business and its three manufacturing sites. 

The company’s website says it is not taking any orders and ‘existing orders will be delivered as communicated’.

3pm: EasyJet may close airport bases

Easyjet is considering the closure of three UK bases – London Stansted, London Southend and Newcastle – although the airports would remain on EasyJet’s route network.

It is consulting with unions over redundancies in response to the collapse in air travel caused by the coronavirus pandemic.

Pilots’ union BALPA says the 727 cuts equate to a third of EasyJet’s pilots in the UK.

2.30pm: Restaurant shuts

Another of Edinburgh’s top restaurants has closed its doors as a result of current economic conditions.

Full story here

12.30pm: Bank chief expects V-shaped recovery

The Bank of England’s chief economist Andy Haldane said Britain’s economy is recovering faster than previously thought from the Covid-19 crisis.

As lockdown controls are gradually relaxed across most of the UK, Mr Haldane said there were signs of a V-shaped economic recovery – a rapid return to growth.

Mr Haldane said the revival in the British economy had been helped by stronger than expected consumer spending, which had improved “sooner and materially faster” than the Bank of England predicted in May.

The uptick has been helped by spending on DIY and household goods, as well as stronger car and home sales.

However, he said he was aware of a range of risks to the economic recovery, including a potential surge in unemployment, which has so far been limited to an extent by the government’s furlough scheme.

Official figures showed that the UK economy shrank by 2.2% in the first three months of 2020 – the sharpest decline in more than 40 years. The drop was 0.2 percentage points bigger than first estimated.

Noon: Boris pledges A1 dualling

Prime Minister Boris Johnson confirmed his £5 billion planned investment amid criticism that it fell short of the £80bn demanded by the Scottish government.

Among the projects is dualling the A1 to Scotland.

Full story here

11.30am: Phoenix changes

Susan McInnes is retiring from her role as CEO of Standard Life Assurance and group director for Phoenix’s Open business later this year.

One of CEO Andy Briggs’ former colleagues at Aviva succeeds her.

Full story here

10.40am: Famous Grouse ‘challenged

Famous Grouse and Macallan distiller Edrington anticipates a “significant decline” in global sales and profits in the current financial year.

Full story here

8.15: London opens lower

The FTSE 100 fell at the opening following publication of GDP figures, although traders were expecting an uplift ahead of Boris Johnson’s speech this morning. In early trade the index was 24.5 points lower at 6,201.25.

7.50am: GDP falls

UK GDP fell by 2.2% in the first quarter, its worst slump since 1979, data confirmed today.

The figure was slightly higher than the 2% Office for National Statistics’ (ONS) initial estimate of the pandemic hit.

7am: Shell writedown

shell

Oil and gas giant Shell said it will write down the value of its assets by up to $22bn in the second quarter after revising its outlook for commodity prices and margin outlook amid the Covid-19 pandemic.

The company said it expected a Brent oil price of $35 a barrel for 2020, rising to $40 in 2021, $50 in 2022 and $60 the following year and the long term in 2020 real terms.

Pre-tax profits would be hit by $20 to $27 billion. Production was expected to be between 2,300 and 2,400 thousand barrels of oil equivalent per day, the company added.

New Standard Life Aberdeen CEO

Keith Skeoch

Keith Skeoch is to step down as chief executive of Standard Life Aberdeen and will be replaced by Stephen Bird who will join the board as chief executive-designate tomorrow.

Mr Bird was CEO global consumer banking at Citigroup, a role he held since 2015, retiring in November last year.

Full story here

6am: Markets

The FTSE 100 is predicted to extend its mini-rally for a second day as traders defy grim economic figures. 

London’s blue chip index has been tipped for a four-point gain, according to spread-betting quotes, having added more than 66 points to finish at 6,225 last night.

Finishing flat would make it a positive month for the Footsie, having started June at just above 6,166.

Wall Street closed positively, with the Dow Jones up 2.3% to almost 25,596, and the S&P 500 up 1.5% and the Nasdaq rising 1.2%. 

Today’s agenda

Prime Minister Boris Johnson delivers speech on economic recovery

Bank of England chief economist Andy Haldane speaks about the economic impact of Covid-19



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