FOB Chief Executive’s Weekly News for 27th April 2020

Barclays economic update: UK flash composite PMI stood at 12.9 in apr’20

According to IHS Markit, the UK flash composite purchasing managers’ index (pmi) stood at 12.9 in apr’20 compared to 36.0 in mar’20.

Widespread business shutdowns at home and abroad in response to the covid-19 pandemic predictably resulted in a rapid reduction in UK private sector output during apr’20. Around 81% of UK service providers and 75% of manufacturing companies reported a fall in business activity during apr’20.

The small minority of manufacturers reporting output growth were mostly involved in medical supply chains or producers of food & drink. In the service economy, there were sporadic reports of growth in apr’20 among those with major clients in either online retail or the public sector.

UK flash manufacturing pmi stood at 32.9 in apr’20, compared to 47.8 in mar’20. The manufacturing pmi is a weighted average of five indices, with the production, new orders and employment components all exerting negative influences in apr’20. Data also indicated that manufacturing output (index at 16.6) decreased at a slightly slower pace than services activity (equivalent index at 12.3) in apr’20.

UK flash services pmi business activity index decreased to 12.3 in apr’20, from 34.5 in mar’20. Customer-facing service providers often reported a complete shutdown of their business operations in apr’20 amid the public health emergency, while a wide range of survey respondents commented on weaker demand following temporary closures among their clients.

Hotels, restaurants and other consumer-facing businesses reported the sharpest drop in output within the service sector, with many firms reporting a total halt in activity.

 

Annual inflation decreased to 0.7% in mar’20

According to eurostat, Euro Area (EA) annual inflation rate decreased to 0.7% in mar’20 from 1.2% in feb’20. European Union (EU) annual inflation also decreased to 1.2% in mar’20 from 1.6% in feb’20.

in mar’20, the lowest annual rates were registered in Spain, Italy, Cyprus and Portugal (all 0.1%). The highest annual rates were recorded in Hungary, Poland (both 3.9%) and Czech (3.6%) when compared with feb’20

In mar’20, the largest contribution to the annual EA inflation rate came from services +0.60 percentage points, (pp) followed by food, alcohol & tobacco +0.46 pp, non-energy industrial goods +0.13 pp and energy -0.45 pp.

 

UK manufacturing sector decline

According to CBI industrial trends survey, the UK manufacturing sector saw production decline at the fastest rate for over a decade in apr’20.

The latest survey reported output volumes of -21% for the three months up to apr’20, compared to -8% in mar’20. Total new orders decreased at the fastest rate since jul’09, at -25%. both domestic orders and export orders decreased at -18% and -24% respectively in apr’20.

However, manufacturers expect total new orders to decrease heavily in the next three months, with -78%as the weakest expectation.

Business sentiment also decreased at a survey-record rate in apr’20, at -87%. In jan’20, sentiment had increased to 23% following the decisive general election result.

Rain Newton-Smith, chief economist at the Confederation of British Industry, stated that despite the already-quick decrease in output and orders in the quarter to apr’20, expectations point to a faster decline in the coming three months.

 

Closure of legacy manual booking processes for Covid-19 Tests

DHSE have now digitised the process for booking Covid-19 tests for eligible essential workers, and are closing all of the manual processes at 1700 on Monday 27 April, directing all applications through the new digital portal. The portal enables individuals to book a test themselves, accessible via www.gov.uk/coronavirus. Alternatively, employers can refer staff using an employer portal. Accounts for this portal can be requested by emailing portalservicedesk@dhsc.gov.uk

On Thursday the government announced that Covid-19 testing has been expanded to essential workers in England, and members of their households, who are showing symptoms of coronavirus. Employers can register their workers through a digital employer portal. Employees are also able to self-register through a separate employee portal.

 

The online booking service will apply to England Scotland only, but full details on how to access testing in all nations and who is eligible can be found here: https://www.gov.uk/guidance/coronavirus-covid-19-getting-tested

 

Support for vital freight routes

The government has announced a support package for essential freight services to Northern Ireland, the Isle of Wight and the Scilly Isles, and the European mainland.

Apprenticeships

DfE has provided guidance for apprentices, employers, and training providers about changes to apprenticeships during coronavirus.

Parental leave

BEIS and DWP have announced that furloughed workers will receive full pay during planned parental leave, rather than their furloughed rate.

Ask a question at the next coronavirus press conference

The government will answer one question from a member of the public at the daily coronavirus (COVID-19) press conference.

Furlough Scheme-Message from HMRC: Dear customer,

Wages for furloughed employees are now being paid through the Coronavirus Job Retention Scheme, just six working days after claims opened.

Payments for claims made on Monday 20 April will be in employers’ bank accounts by tomorrow (28‌‌ April).

If you have already made a claim

Don’t worry if you haven’t received payment yet – it takes six working days from when you claimed. Please don’t call us to chase payment as we won’t be able to update you before the six working days have ended.

You don’t need to do anything to receive payment. It will automatically be sent to the bank account you nominated in your claim.

Please retain all records and calculations for your claims in case we need to contact you about them in future, as we continue to check claims made through the scheme.

If you have not yet made a claim

You can still claim online for a grant for 80% of your furloughed employees’ salaries, up to a maximum of £2,500 per employee, per month. You will receive the funds six working days after you claim, provided your claim matches records that we hold for your PAYE scheme.

Please read all the available guidance before you apply. To find this, go to GOV‌.UK and search for ‘Coronavirus Job Retention Scheme’.

HMRC will check claims made through the scheme and will act to protect public money against anyone who makes a dishonest claim.

Please continue to keep your furloughed employees informed and ask them not to contact us directly – we will not be able to provide them with any information.

A word about scams

Stay vigilant about scams, which may mimic government messages such as ‘Stay at home’ and ‘Stay home, stay safe’, as a way of appearing authentic and unthreatening. Don’t give out private information or reply to text messages, and don’t download attachments or click on links in texts or emails you weren’t expecting. You can forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.

I wish you all the best at this challenging time.

EU roadmap for easing lockdown
The European Commission (EC) has also published a joint EU roadmap setting out criteria for beginning to lift the restrictive measures adopted across the EU to combat Covid-19.  It seeks to ensure a gradual, consolidated and co-ordinated exit from lockdown arrangements across the EU. As in the UK, its criteria include that the spread of the disease has significantly decreased and stabilised for a sustained period of time; there is sufficient health system capacity to meet need; and there is appropriate monitoring capacity, including large-scale testing and contact tracing capacity.

EU rule changes to mitigate impact of C-19 on aquaculture, fishery & agri-food sectors
The European Council (ECo) has adopted new rules in order to mitigate the impact of Covid-19 on the fishery and aquaculture sectors. The new rules take the form of amendments to the regulation on the European maritime and fisheries fund (EMFF) and the regulation on the common market organisation (CMO). They are expected to enter into force on 25 April. The European Commission (EC) has also proposed a package of further exceptional measures to support the agri-food sector.  These include measures for private storage aid in the dairy and meat sectors, the authorisation of self-organisation market measures by operators in hard hit sectors and flexibility in fruits and vegetables, wine and some other market support programmes.

Agriculture Bill – no date set yet for Report stage debate

The Agriculture Bill, as amended by the Public Bill Committee was published last month, but no date has been set yet for the Commons Report stage, when further amendments to the Bill can be tabled and will be debated if selected by the Speaker. The future progress of the Bill can be followed on its website.

WTO members pledge well-functioning global food supply chains

The EU, UK, USA and 21 other members of the World Trade Organisation (WTO) have committed to open and predictable trade in agricultural and food products during the current global health crisis. Co-signatories of the joint statement pledge to ensure well-functioning global agriculture and agri-food supply chains and avoid measures with potential negative impact on food security, nutrition and the health of other members of the organisation and their populations.