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This is the last Coronavirus Business Update of 2020. We will return on January 4. We wish you a healthy and happy seasonal holiday and look forward to continuing keeping you updated in the new year.
Signs of renewed economic activity in UK and US even as infections rise
Consumers rushed out to splash the cash in shops, pubs and restaurants after November’s coronavirus lockdown ended in England, resulting in the fastest rate of consumer spending growth this year, according to the latest data tracking bank transactions.
Figures from Fable Data, based on card transactions and bank payments, show that consumer expenditure in the UK was up 9.4 per cent in the week ending December 13 compared with the same period a year ago.
Even as coronavirus infections intensified across Europe and the US, there were broader signs of renewed economic activity towards the end of the year in a number of countries.
Sales of British Christmas trees were up 15 per cent, reflecting the mixture of a traumatic mink cull in Denmark that affected supply chains and deterred wholesale buyers, disruption at ports ahead of the end the Brexit transition, and a campaign to buy local.
FedEx has revealed the scale of the online shopping boom in the run-up to the US holiday season peak, reporting its highest quarterly sales on record after the logistics group handled millions of additional packages and implemented surcharges on shipments.
Elsewhere, Gucci will launch two online stores in China alongside ecommerce group Alibaba, as the high-end brand counts on a post-coronavirus boom in luxury goods spending in the country to offset sluggish sales in the west.
But the academic Adam Tooze warns that while scientists may have provided a miraculous fix for Covid-19, history shows that any path to recovery will be long.
Reflecting the spirit of seasonal goodwill, he says we should “forgo austerity measures in favour of generous crisis relief for those most in need, and long-term investment in the transition to green energy”.
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Absolute Strategy Research, an investment consultancy, found in its latest quarterly survey of 200 asset allocators, chief investment officers, investment strategists and economists, that 71 per cent thought global equities would be higher in a year’s time. This created the “risk of groupthink”, it warned.
While the City of London remains a global superpower in a number of areas of finance, its stock market is struggling with weak returns and a lack of big tech stocks. Lacking the megacap tech stocks that dominate in the US and China, the FTSE 100 is now trading at one of the widest price-to-earnings discounts to the S&P 500 for 15 years. This is part of our Future of the City series.
The Federal Reserve’s emergency lending programme for small and midsize businesses has recorded a jump in demand with just weeks to go before it is shut down over the objections of the US central bank. For the week ending Wednesday, the Fed lent out an additional $2.7bn through the Main Street Lending Program, created to help struggling businesses that are not big enough to access the bond market.
Restaurant owners have highlighted the crippling effects of a second lockdown within six months in England as well as tough restrictions still in place across the UK. The Restaurant Group, which owns chains including Wagamama and Frankie & Benny’s, reported higher cash burn during England’s second lockdown. Fulham Shore, which owns Franco Manca and The Real Greek, posted first-half revenue down 45 per cent to £19.9m.
The US Food and Drug Administration will grant emergency approval to the Moderna coronavirus vaccine in the coming days, making it the first country to have authorised two inoculations against the virus. The EU has requested a further 80m doses from the company, doubling the size of its orders.
Barclays retail bank chairman Ian Cheshire is stepping down after four years helping to establish and lead the UK unit of the lender, which is set for a major overhaul in the coming years after its profits collapsed amid coronavirus. Sir Ian, 61, will be replaced by Crawford Gillies at the end of the year and will leave the board in May.
Vendors have been offering coronavirus vaccines for sale on hidden parts of the internet days after the first Covid-19 shot was approved this month, as criminals seek to profit from global demand for inoculations. Experts said that many of the vaccines for sale on the dark web were either fake or would never be shipped.
A political flare-up over the Federal Reserve’s pandemic crisis lending programmes has emerged as a late stumbling block to a $900bn fiscal stimulus package as US congressional leaders rushed to complete the deal. Pat Toomey, a Republican senator, sought to insert a provision in the legislation that would prevent the Fed from reviving several emergency credit facilities that are due to expire at the end of the year.
The feverish demand for UK property has stood out in the gloom of the wider economy. After lockdown brought the homebuying process to a near standstill in March, it roared back to life from May, fuelled by the desire for bigger, more comfortable properties triggered by the shift to working from home and the nine-month stamp duty holiday announced in July.
Simon Schama argues that John le Carré, the spy fiction master, ventured well beyond the shadows of espionage to become one of the most perceptive and enduring writers of his age. His writing was “often surprisingly tender amid the carnage, exactingly watchful, brimming with sensuous plenitude, even on rain-sodden city streets, and with the bloody beat of life pounding away on every page”.
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