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Latest news

  • Cuba, suffering from a coronavirus-induced collapse of tourism and other issues, plans a “big bang” currency devaluation

  • A French football TV deal has collapsed in a sign of how the pandemic is forcing a re-evaluation of how much broadcasters pay to screen games

  • Coronavirus infections in London were rising, bucking a generally falling trend across England, the Office for National Statistics said

For the latest coronavirus news, visit our live blog

No-deal Brexit could cap momentous few days

A landmark week for the EU continued as policymakers updated their economic response to the pandemic while preparing for a new relationship with their erstwhile partners in the UK. 

The EU’s €1.8tn budget, including a €750bn coronavirus recovery package, was finally agreed this morning after Poland and Hungary dropped their veto threats. The fund, a mixture of grants and loans, will start paying out in the second half of next year.

Separately, the European Central Bank has unveiled more stimulus for the eurozone economy. It is increasing its bond-buying programme by €500bn to provide more cheap funding for commercial banks and extending the length of its emergency measures. The FT revealed this morning that the package had actually been scaled back after objections it was in fact a little too generous to the banks. The ECB will decide next week whether to stick with its blanket opposition to banks making dividend payments during the crisis.

The FT’s Editorial Board welcomed the ECB plans but warned of a long road ahead even to just reach the “new normal” as fresh lockdowns brought the threat of a double-dip recession. 

Administrations at national level meanwhile are running to stand still, offering a mix of loans, grants, furlough schemes, tax holidays and grants to help individuals and business as the virus refuses to disappear. But even in France, a country well-placed to intervene given its history of close links between government and industry, the situation is merely “the calm before the storm,” as our Big Read explains.

France has been one of the worst hit in the G7 by the pandemic. Chart showing change in GDP, Q1-Q3 2020 vs same period in 2019 (%) in G7 nations, only Italy and UK fared worse

The final drama of the week involves France’s neighbour across the Channel. The conclusion of trade talks between the UK and the EU on Sunday should determine whether the disruption caused by the pandemic will be amplified by the potential chaos of a no-deal Brexit. The frustration of many of those involved was summed up by Dutch prime minister Mark Rutte: “It would be unexplainable to the world if the UK and Europe were not able to come to a deal in these times of upheaval.”

Markets

Oil prices hit a nine-month high thanks to vaccine-based optimism, with Shell, BP, Exxon and Chevron all enjoying share price bounces. Looking ahead, analysts will be closely monitoring the effect of production curbs being lifted in January.

Line chart of $ per barrel showing Oil prices hit nine-month high on vaccine optimism

Private debt funds that lent to UK leisure and retail companies have been hit badly by the pandemic and the ensuing string of insolvencies. The providers of such “direct lending” typically recover only pennies on the pound when a business goes bust.

Bar chart of Number of deals showing Pandemic pauses deal flow for many private lenders

South Korea — seen by the OECD as its strongest performing member economy next year — is enjoying a stock market boom thanks to the global demand for semiconductors and mobile devices during the pandemic. JPMorgan forecast an average 56 per cent increase in 2021 operating profits for South Korean companies, potentially driving stock market valuations even higher.

Business

It’s been a busy day for vaccine news. The US offered to boost production of the Pfizer/BioNTech jab — which now has backing from a key scientific committee ahead of official FDA authorisation — with the hope of securing another 100m doses for itself. Sanofi/GSK’s candidate has been delayed because of poor test results, while in Australia, tests for a homegrown vaccine have been abandoned after participants returned “false positives” for HIV. Here’s our guide to the leading vaccine candidates.

Digital streaming has been Disney’s only bright spot this year as lockdowns boosted demand for TV-based content, helping to offset losses from shuttered cinemas, theme parks and film studios as well as weaker ad sales. Business columnist John Gapper warns that a movie industry pivot from cinema to streaming could make the blockbuster an endangered species.

Shares in aero-engine maker Rolls-Royce dipped on news the pandemic’s resurgence would set back its recovery plans. The company expects an improvement in the second half of 2021 as vaccines allow economies to reopen and international travel to pick up. Our Big Read on Boeing examines the company’s potential for revival now its Max 737 jet is back in the air, amid pandemic-related losses for the global airline industry of $118bn this year. Travel company Tui, meanwhile, spoke out against calls for air passengers to be inoculated before flying.

Global economy

A $9bn credit facility from the Asian Development Bank aims to help vaccination efforts in developing countries. The initiative follows a $20bn pandemic package for Asian countries in April and a $20m technical assistance programme in November. The World Bank warned of serious economic setbacks for Nigeria — already suffering from rising unemployment and inflation and falling incomes before the pandemic — a country that relies heavily on oil and remittances.

Column chart of Poverty projections for business-as-usual scenario (millions) showing Nigeria could have 100m people in poverty by 2022

New US jobless claims rose sharply amid the surge in coronavirus infections and the tightening of restrictions. The country on Thursday reported 3,000 deaths in a single day for the first time. Fees for nurses are soaring under the strain.

British banks are strong enough to ward off damage from the pandemic, according to today’s Bank of England financial stability report, even amid the “market volatility and disruption” of Brexit. Gross domestic product data showed the UK recovery slowing in October — ahead of the November lockdown — with growth of just 0.4 per cent. Economics editor Chris Giles looks at the pros and cons of a proposed “wealth tax” of 5 per cent to help repair the country’s finances.

Have your say

Coronavirus vaccines mean light at the end of the tunnel at last. But there’s a long way to go before the world can say goodbye to pandemic disruptions. Can governments roll out vaccine programmes swiftly, efficiently and fairly? And who should have priority? Please share your views with us — email us at covid@ft.com. Thanks

Sadev comments on Pandemic leaves over-50s with uncertain job prospects

I completely agree with the theme of this article. For the above 50s it is a perfect storm brewing. Not just those who are unemployed, but even those who are in employment but whose jobs are hanging by the thread. I think a long-term solution is for the government to make it easier to borrow for setting up small enterprises. A lot of opportunities are still out there for someone with a small capital in online retailing. No doubt it is hard and lots of firms do close down. But to see that someone who is well qualified drifting into poverty is really quite depressing.

Science

An ultraviolet sterilisation device is being trialled at Kansai airport in Japan for use on baggage carts, with hopes it could be in operation in time for the Tokyo Olympics.

A baggage cart inside the UV steriliser

Science and environment reporter Anna Gross in this video looks at new technologies, such as anti-microbial coatings and new ways of using UV radiation and air con systems to help make workplaces safe from coronavirus.

Final thought

Cosy but cool: drinks editor Alice Lascelles highlights her favourite London spots for al fresco cocktails this winter in our FT Globetrotter travel guide.

© Cocktails at Dalloway Terrace | Rebecca Hope

We would really like to hear from you. Please send your reactions or suggestions to covid@ft.com. Thanks

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