Florida reports record increase in deaths
Florida reported its biggest one-day increase in coronavirus deaths on Thursday and almost 14,000 new cases.
A further 156 people died from Covid-19 since Wednesday, the state health department revealed this morning, edging past the previous record from July 14 of 133. A total of 4,782 people there have died since the pandemic began.
The number of confirmed cases jumped by 13,965 compared with 10,181 on Wednesday. It is Florida’s second-biggest one-day jump, trailing the 15,300 on July 12 that is also a record for any US state.
Almost 316,000 people in Florida have tested positive for Covid-19 since the pandemic began; New York and California are the only US states with more cases. Florida’s tally crossed 300,000 for the first time on Wednesday.
More to follow
US homebuilder confidence back at pre-pandemic levels
US homebuilder confidence jumped in July, taking it back to levels seen before the pandemic rattled the US economy as the 30-year mortgage slipped to a record low, data on Thursday showed.
The National Association of Home Builders’ Housing Market Index jumped to 72 in July from 58 the previous month. That exceeded economists’ forecasts for a reading of 60, according to a Reuters survey, and matched its reading in March.
The rise in homebuilder confidence comes as mortgage rates on 30-year loans fell to a fresh low of 2.98 per cent, the lowest level on records dating back to 1971, according to Freddie Mac.
“Builders are seeing strong traffic and lots of interest in new construction as existing home inventory remains lean,” said NAHB Chairman Chuck Fowke. “Moreover, builders in the Northeast and the Midwest are benefiting from demand that was sidelined during lockdowns in the spring. Low interest rates are also fueling demand, and we expect housing to lead an overall economic recovery.”
Economists have pointed out that one of the reasons the housing market has recovered quickly is because pandemic-driven job losses have disproportionately affected younger renters as opposed to would-be homebuyers. Moreover, lower mortgage rates have made home purchases more attractive for those who have held on to their jobs.
Republican party convention to go ahead in Florida at smaller scale
Lauren Fedor in Washington
The Republican party has decided to hold a scaled-back convention in Jacksonville, Florida, next month, as the coronavirus outbreak in the Sunshine State continues to spread.
The GOP had originally intended to hold its convention, held once every four years, in Charlotte, North Carolina, but said it would move most of the event’s activities to Jacksonville.
The decision came after Roy Cooper, North Carolina’s Democratic governor, said he would impose social distancing and other requirements on attendees. Florida’s Republican governor, Ron DeSantis, is a close ally of Donald Trump.
But Ronna McDaniel, chairwoman of the Republican National Committee, said on Thursday that “adjustments must be made to comply with state and local health guidelines”.
Florida is one of the hardest-hit states in America’s widening Covid-19 outbreak. On Wednesday, the state reported a further 10,181 infections, bringing the total number of cases there to more than 300,000 since the start of the crisis.
In a letter to RNC members, obtained by the Financial Times, Ms McDaniel said only delegates would be allowed to attend the first three days of the convention, from August 24 through August 26. Mr Trump is still expected to give a speech formally accepting the party’s nomination on August 27, with a slightly wider group of attendees.
Ms McDaniel said the party would “implement a variety of health protocols”, including “on-site temperature checks” and “available PPE”.
Mr Trump had been reluctant to scale back the convention, which will be held just over two months before Election Day. The Democratic party has already announced plans for its own condensed convention in Milwaukee, Wisconsin, which will be held the week before the GOP gathering.
US retail sales jump again in June
US consumer spending jumped for a second month in a row in June as more Americans returned to work and retailers continued to gradually reopen.
The US Census Bureau said on Thursday that retail sales were up 7.5 per cent last month, compared with economists’ estimate of 5 per cent growth and a May rise of 18.2 per cent, which was revised higher.
The monthly rise in consumer spending was driven in part by petrol stations, where sales jumped 15.3 per cent, and food services, which registered 20 per cent growth as restaurants across the country gradually reopen. Sales in cars and related parts jumped 8.2 per cent. For clothing stores, sales more than doubled. Spending on electronics, appliances and home furniture also gained.
Non-store retailers, a category that includes ecommerce shopping, posted a 2.4 per cent decline in sales with more brick-and-mortar outlets emerging from shutdowns. Food and beverage stores were down 1.2 per cent.
The gains come amid worries over the impact of Covid-19 outbreaks in the US south and west, where some states have rolled back their reopening plans in an effort to slow the spread of coronavirus.
US unemployment claims ease amid gradual rehiring
The number of Americans collecting unemployment cheques eased for the sixth week running to 17.3m, reflecting how businesses have rehired workers even as lay-offs continue four months into the pandemic.
Continuing claims for the week ending on July 4 dropped from a revised 17.8m, according to the latest figures from the US labour department. It marked the lowest level since early April and compared with economists’ estimates of 17.6m.
Slightly fewer workers applied for new jobless benefits last week. There were 1.3m first-time claims, against 1.31m the week before. Economists had forecast claims of 1.25m. The pace of new claims has gradually slowed in each of the last 15 weeks since hitting a high of 6.9m in March.
New claims in the federal Pandemic Unemployment Assistance programme, which extended aid to the self-employed or other individuals who would not qualify for regular unemployment compensation, fell to 928,488 from about 1m on an unadjusted basis.
European assets take ECB in their stride as focus turns to recovery fund
European stocks and the euro were little moved by the European Central Bank’s decision not to tinker with its level of stimulus as it gauges the region’s fragile recovery from the coronavirus pandemic.
Analysts said the move to keep monetary policy and bond purchases unchanged was not a major surprise and said investors are instead focused on Friday’s meeting of EU leaders, where they are expected to finalise details of a €750bn recovery fund.
“We would expect to see progress and positive noises even if this isn’t the final sign off,” said Hetal Mehta, senior European economist at Legal & General Investment Management.
ECB pauses stimulus policy as it gauges pace of nascent recovery
Martin Arnold in Frankfurt
The European Central Bank has left its monetary policy on hold and committed to keep buying trillions of euros in bonds until it judges the economic crisis caused by the coronavirus pandemic to be over.
The decision by the ECB governing council on Thursday means that the central bank has hit pause after four months of ramping up its monetary stimulus, taking time to assess the eurozone’s nascent recovery before launching any new measures.
At its previous monetary policy meeting in early June, the ECB expanded the amount of bonds and other assets it plans to buy under its Pandemic Emergency Purchase Programme from €750bn to €1.35tn and extended its timespan until at least the end of 2022.
Since then, the outlook for the eurozone economy has tentatively brightened. Consumers went on a spending spree after shops reopened in May, helping retail sales to rebound from record falls in March and April, while industrial output also recovered, albeit at a slower rate.
On Thursday the ECB kept its main deposit rate unchanged at minus 0.5 per cent and said its bond purchases would continue “as long as necessary to reinforce the accommodative impact of its policy rates”.
J&J sales of medical devices slide as pandemic delays operations
Hannah Kuchler in New York
Johnson & Johnson’s net earnings fell by more than a third as the Covid-19 pandemic delayed elective procedures and hit sales of medical devices, while the consumer division suffered from declines in demand for beauty products.
But the world’s largest healthcare company inched up its revenue and earnings guidance for the year as pharmaceutical sales remained strong, led by treatments for cancer and inflammatory conditions. Shares were flat in pre-market trading.
Alex Gorsky, chief executive, said the results showed the “enduring strength” of its pharmaceutical business and remained confident about the prospects for its Covid-19 vaccine.
J&J expects full-year revenue of between $81bn and $82.5bn, higher than the previous range of $79bn to $82.2bn.
In the second quarter, J&J sales slid 11 per cent year on year to a higher than expected $18.3bn. They dropped by a third in the medical devices division.
UK business faces twin blow of higher Covid-19 costs and lower sales
Valentina Romei in London
UK businesses face steeper costs as they implement Covid-19 safety measures that include protective equipment and social distancing, yet turnover remains depressed.
Of the companies that put in place coronavirus restrictions, 73 per cent reported rising operating costs, a national survey on the pandemic’s impact on business revealed.
Ninety-one per cent of the 5,500 businesses surveyed from June 15 to 28 introduced social distancing while 80 per cent use personal protective equipment and 85 per cent updated hygiene measures. Only 3 per cent of businesses in the Office for National Statistics study did not implement any of the measures.
About 90 per cent of businesses in the accommodation and food services industry reported rising operating costs, with about two in five businesses reporting “substantial” increases.
Operating costs rise as 58 per cent of active businesses reported that their turnover decreased outside the normal range over the same period.
The burden was greater in the leisure and food services sector, which employs 1.8m and accounts for the largest share of furloughed workers. The industry had 86 per cent of businesses reporting depressed turnover. Almost half suffered turnover shrinking more than 50 per cent.
The combination of lower sales and rising costs is a threat to jobs that are being supported by the government scheme, but will lose support from August when the scheme will stop being free of costs.
Hong Kong authorities nervous about rise in untraceable cases
Primrose Riordan in Hong Kong
Hong Kong health authorities reported 67 new coronavirus infections on Thursday, triggering fears of an outbreak in the territory that has until now been a global success story in controlling the virus.
Authorities warned of an increase in untraceable cases as they said 63 of the cases were local and not imported.
Health authorities advised senior citizens not to leave their homes and further tightened social distancing regulations for restaurants.
Unicef to help poor countries secure medical supplies
Andrew Jack in London
Unicef has received support from a UK social finance business to help low and middle-income countries secure costly health supplies for their battles against Covid-19.
MedAccess, a social finance venture owned by the government’s development finance arm, will provide a $50m guarantee to the international children’s charity, boosting its bargaining power on behalf of nations in Africa and south Asia.
The guarantee will enable Unicef to buy high volumes of diagnostic and medical supplies from manufacturers, obtaining better terms than individual countries would manage on their own.
MedAccess has in recent months structured several deals directly with manufacturers of health products on behalf of lower income countries to lower prices in exchange for bulk purchases. Its latest agreement is the first with Unicef and will be offered without any fees.
Michael Anderson, MedAccess chief executive, said: “We’ve seen some pretty terrible profit seeking and local pricing that we want to help eliminate. This guarantee will reduce price volatility, pool procurement and increase the leverage of small low-income countries without the diplomatic or financial clout to get access directly.”
France orders mask-wearing in public indoor spaces from next week
Victor Mallet in Paris
France will insist that masks be worn in indoor public spaces nationwide from next week after signs of an uptick in coronavirus infections in Paris and some other regions, the government announced on Thursday.
A decree ordering the wearing of protective face masks was to have been enforced from August 1, but has been brought forward.
“I realised that the target date seemed too late,” prime minister Jean Castex told the Senate, “so the decree will come into force next week.”
Earlier, health minister Olivier Véran warned of Covid-19 clusters in the Mayenne department in north-west France and said infections in Paris merited attention.
“We are noticing in some Paris hospitals slight signs of an uptick in the epidemic, which is why I am asking the French to remain particularly vigilant in taking action against the virus,” he told France Inter radio.
We have to get used to the virus circulating. Some countries around us have been obliged to put towns, provinces and regions back into lockdown.
More than 30,000 people have died from coronavirus in France since the start of the year. The country started easing a strict, two-month lockdown in mid-May, and the national Covid-19 reproduction or R number has recently crept back above 1 to reach 1.05, while in Mayenne it is at 1.42.
The overseas territory of Guyane — French Guyana in South America — also has a high rate of new infections and is the only part of France currently classified as a “red zone” on high alert.
Coronavirus and the UK jobs market
The FT reported earlier on how the pandemic has blighted the UK labour force, with 650,000 paid employees having lost their jobs since March.
But according to investment manager Hargreaves Lansdown, which has looked at Office for National Statistics data and unofficial employment measures, the situation is even more miserable than this.
Sarah Coles, personal finance analyst at Hargraves, reports that while 650,000 formal jobs have been lost since March, another 178,000 self-employed people have given up work. This is the largest decline on record, according to her analysis.
Since March, the number of people claiming unemployment benefits has also more than doubled to 1.4m.
And in bad news for those looking for new jobs, vacancies fell to a record low of 330,000, a 58 per cent decline on the previous three-month period.
Ms Coles says:
We’ve seen 650,000 jobs lost, 178,000 self-employed people throwing in the towel, the claimant count more than doubling, and so few jobs being advertised that people have given up looking for work.
And this is just the start. The [Office for Budget Responsibility] has predicted unemployment will hit 3 million this year, [rising to] as much as 4 million in 2021.
UK boosts plans for government bond sales to record £385bn
The UK government now plans to raise £385bn from bond sales in the first eight months of the current fiscal year, in the latest increase to its record-breaking gilt issuance programme.
The Debt Management Office (DMO) announced the new figure, covering the period from April to November, following the latest package of measures to support the economy through the coronavirus crisis announced by chancellor Rishi Sunak last week. At its previous update in late June, the DMO had pencilled in gilt sales of £275bn from April to August.
UK borrowing costs have dropped to record lows in recent days despite the flood of new bonds, thanks largely to the Bank of England’s £300bn bond purchase programme. Gilt yields are negative, meaning investors are in effect prepared to pay the government to take their money, up to maturities of seven years.
The new issuance schedule, which includes 38 bond auctions from September to November, means the pace of gilt sales is set to drop to £36bn a month, from £60bn at the start of the fiscal year, according to analysts at TD Securities.
The slowing of issuance “should be considered relatively positively for markets”, said TD strategist Pooja Kumra. However, the outlook for gilts will depend on the ongoing pace of BoE purchases, which will be updated at the central bank’s August meeting, she added.
Online gaming boom helps GVC cope with retail closures
Ladbrokes Coral owner GVC reported that revenues fell sharply in the second quarter but the blow was softened by a stronger than expected performance for online gaming.
The damage from coronavirus was revealed on Thursday as the group reported that net gaming revenues fell 22 per cent in the second quarter, as the business was hit by cancellations and postponements of sports fixtures and closed high street bookies during the lockdowns.
However, a more than 20 per cent rise in revenues from its online business due to a boom in gaming from home helped to mitigate the sharp fall-off in other businesses.
It said that earnings before interest, tax, depreciation and amortisation in the first half of the year were expected to be £340m-£350m, higher than analyst forecasts.
The trading update came as the group announced that chief executive Kenneth Alexander would step down at the end of the week, making way for chief operating officer Shay Segev to take charge.
The leadership change comes as gambling groups vie to win customers in the prized US market, which has gradually begun to legalise sports betting state by state.
Chinese stocks fall further after disappointing sales data
Global stocks pulled back on Thursday after disappointing data on China’s economy sent the country’s stock market tumbling almost 5 per cent.
The slide in Chinese markets dragged down European equities in early trading with the continent’s Stoxx 600 index slipping 0.6 per cent, pulling back from gains of 1.8 per cent on Wednesday when positive news from early Covid-19 vaccine trials lifted global markets.
The UK benchmark FTSE 100 dropped 0.4 per cent as traders reviewed employment figures, which showed the country shed 650,000 jobs during the coronavirus lockdown.
Retail sales in the world’s second-largest economy defied expectations of a return to growth to fall 1.8 per cent in June compared with last year in their fifth month of decline. The signal of a slow and uneven recovery from the pandemic sent stocks into reverse after a rally on Wednesday.
China’s CSI 300 index of Shanghai and Shenzhen-listed companies suffered its worst day since February, falling 4.8 per cent. Hong Kong’s Hang Seng slid 1.7 per cent and China’s currency, the renminbi, weakened.
The drop came despite better than expected figures on China’s gross domestic product, which grew 3.2 per cent in the three months to the end of June compared with the same period last year — above the 2.5 per cent forecast by economists in a Reuters poll.
China’s mainland stocks have risen 12 per cent this year, despite Thursday’s fall, leading some investors to worry that the country’s equities have become a bubble.
California’s biggest oil and gas producer files for bankruptcy
Myles McCormick in London
California Resources Corp, the golden state’s biggest oil and gas producer, filed for bankruptcy overnight, becoming the latest US energy group to hit the wall since the coronavirus pandemic sent crude prices tumbling.
Recent market ructions proved to be the final straw for a company that had struggled under the weight of its debt load since it was spun off from Occidental Petroleum six years ago.
“Today’s unprecedented market conditions, including oversupply and reduced demand due to Covid-19, require that we further reduce our debt through a Chapter 11 process,” said Todd Stevens, CRC chief executive.
The Santa Clarita-based company is the fourth big name in the US energy sector — and the biggest conventional producer — to file for bankruptcy since the outbreak of coronavirus combined with a price war between Russia and Saudi Arabia sent oil prices plunging.
It was spun out of Occidental in 2014, inheriting a net debt of over $6bn, just as oil prices were beginning to slide ahead of the last downturn. When the deal was conceived, oil traded above $100 a barrel, but even as it closed, prices had slipped to about $70. They fell to $30 by the end of 2015 and have never since returned to triple digit levels.
Heineken set for first-half loss as it takes €550m impairment charges
Judith Evans in London
Heineken expects to swing to a loss for the first half, it said on Thursday, after slashing the value of its assets by €550m because of the pandemic.
The world’s second-largest brewer said it expected to make a net loss of about €300m in the second quarter, down from a net profit of €1bn a year earlier, thanks to the impairment charges. Net revenues declined by 16.4 per cent on an organic basis in the first half, it said.
Shares in the beermaker fell 5 per cent in early Amsterdam trading.
“As expected, the impact of the COVID-19 crisis deepened in the second quarter of 2020,” said the Dutch group, which also makes brands including Amstel, Tiger and Moretti. “After a low point in April, volume started to gradually recover into June as lockdowns were lifted around the world and customers restored depleted inventories.”
It said beer volumes had been worst affected in Americas, Africa, the Middle East and Eastern Europe, above all Mexico and South Africa, both of which banned the sale of alcohol during lockdowns.
The brewer has taken “significant cost mitigation actions” which will continue, it said as it issued preliminary figures ahead of a full release on August 3.
UK loses 650,000 jobs despite attempts to shore economy up
Valentina Romei in London
The UK has shed more than half a million jobs during the coronavirus lockdown while employees worked fewer hours and earned less despite the government rolling out numerous measures to support the economy.
The number of UK payroll employees fell by 650,000 in June compared with March, a 2.2 per cent fall, figures from the Office for National Statistics based on tax data show. The statistics body said, however, that the rate of decline in employment had slowed in June compared with May.
“There are now almost two-thirds of a million fewer employees on the payroll than before the lockdown,” said Jonathan Athow, ONS deputy national statistician for economic data.
June’s ONS labour market statistics pointed to a deterioration across various measures despite a government programme that supports 9.4m jobs and 2.7m self-employed people. The jobs scheme is due to be phased out in October, prompting concern that Britain could face a further surge in unemployment in coming months.
Banks in Hong Kong tell staff to work from home amid local outbreak
Primrose Riordan in Hong Kong
Banks in Hong Kong have reinstated measures to allow employees to work from home after a resurgence in local coronavirus cases led authorities to introduce new social distancing measures.
HSBC employees were encouraged to work from home from Wednesday, while others who needed to work from the office were told to stagger their arrival.
“To support flexible working employees who must work from HSBC premises should discuss working arrangements, including staggered arrival and lunch times, with their line manager,” a memo from the bank said.
Standard Chartered bankers who can work from home were told to go back to this arrangement, the bank said, and those who work from the office have to follow a split team system.
Customers must wear masks inside branches and partitions have been installed, Standard Chartered said.
Anglo’s working capital builds up as diamond demand fades
Neil Hume in London
Global miner Anglo American has reported an 18 per cent drop in second-quarter output because of coronavirus-related disruptions and flagged a $1.3bn increase in working capital because of plunging demand for diamonds.
The London-listed company, which has extensive operations in South Africa, said it is operating at 90 per cent production capacity, up from 60 per cent in April, as lockdowns have eased.
“Continued strong performances from our Minas-Rio iron ore operation in Brazil and the Collahuasi copper operation in Chile helped mitigate our overall decrease in production to 18 per cent, as we also addressed operational issues at our metallurgical coal and platinum group operations,” said chief executive Mark Cutifani.
Anglo revealed a $1.3bn build-up in working capital as demand for diamonds produced by its De Beers division plunged due to Covid-19 and repairs at a key processing plant in South Africa hit refining activity in platinum and palladium.
Analysts had expected a weak quarter due to the tough lockdown measures implemented in South Africa and two incidents at its met coal business in Australia.
European futures tip stocks to fall
Europe’s markets are set to retreat when trading begins on Thursday after disappointing Chinese retail data unsettled Asian equities.
Retail sales in the world’s second-largest economy contracted 1.8 per cent in June compared with last year, missing expectations of a modest return to growth, in a sign of weak consumer confidence. The data sent Asia’s markets down despite 3.2 per cent year on year growth in China’s gross domestic product.
Futures in the European Stoxx 600 composite traded down 0.8 per cent ahead of the market open, pulling back from gains of 1.8 per cent on Wednesday when global markets rallied on positive news on an early Covid-19 vaccine trial.
The UK’s FTSE 100 futures pointed to a 0.5 per cent drop as investors digested data on job losses during the coronavirus lockdown.
European traders will be looking ahead to Thursday’s scheduled announcement from the European Central Bank, which is expected to hold interest rates steady.
S&P 500 futures also dropped, by about 0.5 per cent, after the index rallied 0.9 per cent on Wednesday.
Australia cannot eliminate Covid-19, says top medical official
Australia cannot eliminate coronavirus, according to one of its top medical officials, who called such a strategy “unrealistic” and “dangerous”.
Nick Coatsworth, a deputy chief medical officer, said the recent surge of hundreds of new cases in the state of Victoria has prompted calls for an “elimination” strategy.
“This is surprising,” Dr Coatsworth said in a statement posted on the health department website on Thursday. “It’s unrealistic – and it’s dangerous.”
He said it was not true that if Victoria had eliminated community transmission of Covid-19, this second outbreak would not have occurred.
He said the new surge has stemmed from breaches in quarantine by Australian citizens returning from overseas. “Such breaches would have seeded this outbreak even if community transmission had been eliminated for several weeks,” Dr Coatsworth said.
He said “true elimination” can be achieved only by a vaccine. “Measles is a good example. It is eliminated in Australia and we received that distinction from the World Health Organization in 2014.”
But, he noted, Australia does see occasional outbreaks, “which are quickly brought under control by our public health teams and because we have an excellent immunisation programme”.
Local elimination is wonderful when it occurs, and allows significant relaxation of distancing measures, Dr Coatsworth noted.
But, he added, “we are not in a position in Australia to achieve elimination where global transmission is increasing”.
He said returning travellers, ships and crew would continue to come from countries with widespread transmission.
Chipmaker TSMC reports 81% jump in quarterly profit
Kathrin Hille in Taichung, Taiwan
Taiwan Semiconductor Manufacturing Company reported an 81 per cent jump in net profit for the second quarter compared with the same period last year, as the world’s largest contract chipmaker continues to grow despite the downturn caused by the coronavirus pandemic.
Net income in the three months to June 30 totalled NT$120.8bn (US$4.1bn), TSMC said. The company said its revenue reached NT$310.7bn, up 28.9 per cent from the same period in 2019, and in the top range of the forecast the company gave three months ago.
Compared with the first quarter, net earnings increased by 3.3 per cent and revenue was flat. In the first three months of this year, TSMC’s net income had almost doubled over the same period a year earlier, and revenue had grown by 42 per cent.
The results reflect strong demand for computers and other gadgets needed for working from home which use the chips TSMC manufactures for global customers, including Apple and Huawei.
Although US sanctions on Huawei announced in May are set to force TSMC to discontinue shipments to the Chinese technology group later this year, other customers are expected to take up the production capacity, TSMC said earlier this year.
Formula One strikes hospitality deal with Zoom
Samuel Agini in London
Formula One is set to unveil a tie-up with Zoom, the video meeting platform, as the world’s biggest motor racing series creates a virtual substitute for the corporate hospitality business it has been forced to suspend during the coronavirus pandemic.
While Zoom has struck partnerships with individual sports teams in the past, including English Premier League sides Arsenal and Manchester City, the F1 deal is its first move into re-creating corporate hospitality as a virtual experience.
F1, which has been controlled by billionaire John Malone’s Liberty Media since an $8bn deal in 2016, is trying to emulate the experience of the Paddock Club, its luxurious corporate hospitality arm.
Read more here
Survey indicates mid-sized Asia companies hit hard by virus
More than half of mid-sized Asia-Pacific companies reported a reduction of up to 50 per cent of normal revenues during the coronavirus pandemic, according to a regional survey.
More than 60 per cent of the respondents indicated a 20 to 50 per cent reduction in monthly revenues, with more than half of them foreseeing that it will take at least six to 12 months to recover from the disruptive impact and stabilise operations.
“Due to limitations around financing support as well as uncertainties about the end-consumer demand, mid-sized corporates are often more vulnerable to disruptions compared to their larger counterparts,” said Jiten Arora, global head of commercial banking at Standard Chartered, which commissioned the survey.
“Despite these challenges, there is an opportunity for new profitable growth if these businesses can … be nimbler in innovating and transforming their ways of working to become more resilient,” Mr Arora said.
The bank’s survey polled 205 mid-sized companies – defined by the bank as having annual revenues of $100-500m – in China, Hong Kong, India, Malaysia and Singapore during the last two weeks of June.
Scientists question lasting immunity from virus vaccine
Hannah Kuchler in New York and Anna Gross in London
Scientists are questioning whether waning immunity to Covid-19 could affect how useful a vaccine will be in tackling the pandemic, even as investors welcomed new positive early trial data.
A study from King’s College London, which has yet to be peer-reviewed, showed recovered patients’ antibodies declined significantly within months of infection, raising the critical issue of how long a vaccine could prevent people catching the disease.
The concerns come as shares in Moderna rose 6 per cent on Wednesday after the US biotech company shared positive data showing all 45 participants had produced antibodies after taking its vaccine candidate.
Read more here
Indonesia to impose fines over masks, says governor
Indonesia’s president, Joko Widodo, will approve a decree imposing fines for the first time on people who violate Covid-19 health protocols, official media reported on Thursday.
The president is working out the details of a presidential instruction, the Antara news agency quoted West Java governor Ridwan Kamil as saying after a meeting with provincial leaders.
“The president has applauded our initiative to impose the fines,” Mr Kamil said.
The governor said the minimum fine for not wearing a mask in public would be set at Rp100,000 ($7).
West Java, home to 48m of Indonesia’s 267m people, would start fining violators from July 27, Mr Kamil told the agency.
The governor said the spread of Covid-19 had been brought under control in West Java.
“It has been under control, but some locations, including boarding education institutions, need to be monitored cautiously,” Antara quoted him as saying.
Airbnb executive to depart amid virus downturn
Dave Lee in San Francisco
A senior executive is set to depart Airbnb as part of a leadership shakeup, as the accommodation-rental company insists it has not ruled out going public despite coronavirus leaving much of its business in tatters.
Greg Greeley, president of homes and a former Amazon executive, is stepping down two years after being brought in to stabilise and grow Airbnb’s core rental business.
“When the market is ready, we will be ready,” Brian Chesky, chief executive, sad of the proposed listing in an email to employees on Wednesday. “We were down, but we’re not out.”
India records more rural cases as total approaches 1m
Amy Kazmin in New Delhi
India detected a record 32,682 new coronavirus infections on Wednesday, bringing it ever closer to the grim milestone of 1m confirmed infections.
The country also recorded an additional 614 coronavirus deaths, bringing the total number of fatalities from the pandemic in India to 24,900.
India now has more than 970,000 confirmed coronavirus infections, the world’s third-heaviest confirmed burden after the US and Brazil.
Despite this, the government has touted its battle against the pandemic as a great success, pointing to the relatively low number of deaths in a nation of 1.3bn people.
Until now, India’s coronavirus hotspots have mainly been metropolises such as Mumbai, the preeminent financial city, and Delhi, the capital district.
But the virus is now spreading into more rural areas, such as Bihar, where medical infrastructure is far weaker.
The failure to control the virus has led to renewed disruptive lockdowns in many parts of the country, including the tech hubs of Pune, Bangalore, pictured, and the state of Bihar.
In the southern state of Karnataka, of which Bangalore is the capital, B. Sriramulu, the state’s health minister and chair of its Covid-19 task force, declared on Wednesday that “only God” could save the state from the ravages of the pandemic.
Public health experts say India’s total confirmed case count, and its official death toll, are likely to be severely understating the true magnitude of the epidemic, as India has one of the lowest rates of testing of any major nation in the world.
In these regions, many ailing coronavirus patients may never be tested, or diagnosed, or treated, simply becoming silent, unacknowledged casualties of the pandemic.
Opec and Russia primed to unwind historic supply cuts
Anjli Raval, David Sheppard and Derek Brower in London
Opec and Russia are primed to start unwinding the record oil supply cuts agreed earlier this year, as they aim to raise production without undermining a recovery in crude prices.
The oil cartel and its allies are set to scale back the cuts of 9.7m barrels a day that took effect in May to 7.7m b/d from August, Opec delegates said on Wednesday.
It would be the first test of their ability to start returning to the market the equivalent of almost 10 per cent of global crude output, which was removed this spring after Covid-19 lockdowns and travel bans crushed oil demand.
Read more here
Coronavirus cases emerge in Hong Kong’s judicial system
Hong Kong’s Judiciary announced on Thursday that Covid-19 positive cases had been discovered in its Labour Tribunal and in a magistrates’ court.
The Centre for Health Protection said a contract cleaner at the tribunal, located in Kowloon, had tested positive for coronavirus and hearings had been adjourned until further notice.
Another person who had visited Tuen Mun Magistrates’ Courts in the northwest of the territory also tested positive. Officials said the court would be disinfected.
Hong Kong’s judicial system had been adjourned on January 29 due to the pandemic, but hearings had begun to resume in stages from May 6.
India reports 1st trade surplus in 18 years as imports collapse
Amy Kazmin in New Delhi
India reported its first trade surplus in more than 18 years in June, as exports remained far below last year’s levels but imports collapsed even more dramatically, as the coronavirus pandemic weighs on the country’s economy and trade.
India recorded a slight $800m surplus in June, the first time since January 2002 that its merchandise exports had exceeded imports.
However, the backdrop was a sharp decline in India’s overall trade activity, highlighting disruption from the virus and efforts to control it.
India’s merchandise exports contracted 12.4 percent in June from June 2019, though the magnitude of the contraction has moderated significantly from the 36 per cent year-on-year contraction in exports in May, and the 60 per cent contraction in April, when virtually all economic activity was brought to a halt.
The export numbers were buoyed by growth in overseas pharmaceutical sales, which grew about 10 per cent year on year in June, while other items, including textiles, electronic goods and engineering items, remained depressed.
Imports remain severely depressed, down 47.6 per cent year on year, reflecting weak domestic demand.
Economists have projected that India’s economy will contract significantly this year, with some saying the fall could be as much as 7 per cent, a more significant decline than the global average.
Ukraine to extend quarantine measures for another month
Ukraine health officials will extend quarantine regulations in the country by another month to August 31, state media reported on Wednesday.
“We cannot abandon the restrictive measures due to the current epidemic situation,” the Ukrinform news agency quoted health minister Maksym Stepanov as saying.
Quarantine measures were introduced in Ukraine on March 12 with June 30 set as a deadline. On June 20 the measures were extended until July 31.
The government regulations require Ukrainians to wear face masks and keep social distance minimums.
In Kyiv, the capital, where the infection rate is highest, indoor restaurants, swimming pools, cinemas, theatres, museums and entertainment areas in shopping malls remain closed.
Mr Stepanov said the restrictive measures might be gradually eased by regional administrations.
As of July 15, Ukraine reported 55,607 confirmed Covid-19 cases, including 1,427 deaths and 28,131 recoveries.
Officials told Ukrinform that 836 new cases were recorded on Wednesday.
Weak China retail sales data drag down Asia-Pacific stocks
Asia-Pacific stocks retreated on Thursday after retail sales in China remained weak, offsetting better-than-expected overall economic growth figures for the second quarter.
China’s economy grew 3.2 per cent year on year in the three months to the end of June after coronavirus lockdown measures were eased, and coming in above a Reuters poll of economists that forecast 2.5 per cent growth.
However, Chinese retail sales fell 1.8 per cent year on year in June, notching a fifth month of falls and bucking expectations from a Reuters poll of 0.3 per cent growth. Retail sales fell 20.5 per cent in February as the country was locked down to halt the spread of coronavirus.
Fixed asset investment was down 3.1 per cent, in line with forecasts and industrial production rose 4.8 per cent.
The CSI 300 index of Shanghai- and Shenzhen-listed stocks fell 1.1 per cent and Hong Kong’s Hang Seng dipped by the same amount. In Japan, the Topix declined 0.3 per cent and Australia’s S&P/ASX 200 edged down 0.4, while the Kospi in South Korea shed 0.7 per cent.
S&P 500 futures were down 0.6 per cent.
Marcella Chow, JPMorgan Asset Management global market strategist, noted the lag for retail sales, but expects this sector will become a growth driver alongside government infrastructure investment.
“Since domestic households have accumulated a huge amount of bank deposits for precautionary savings during the economic slowdown and pandemic, fast recovery might be seen in consumption when their confidence improves,” she said.
The onshore renminbi, which is permitted to move 2 per cent either side of a daily midpoint set by China’s central bank, was 0.1 per cent weaker at Rmb6.9957 to the dollar. The offshore renminbi was 0.2 per cent weaker at Rmb6.9956.
Positive news from two vaccine trials supported global stocks overnight with the S&P 500 ending 0.9 per cent higher in the US and the FTSE 100 adding 1.8 per cent.
Chinese GDP grows 3.2% in second quarter
Thomas Hale in Hong Kong and Xinning Liu in Beijing
China’s economy returned to growth in the second quarter, in one of the world’s earliest signs of recovery from the fallout of the coronavirus pandemic.
Gross domestic product grew 3.2 per cent in the three months to the end of June, compared with the same period last year, exceeding forecasts.
The figures follow the first annual decline in decades in the previous quarter, when China’s GDP fell by 6.8 per cent as the country struggled to deal with the impact of the coronavirus pandemic.
The return to growth coincided with a period when new reported cases of the virus had fallen sharply, and against a backdrop of state support for the country’s industrial sector even as consumption remains weak.
Liu Aihua, spokeswoman for the country’s National Statistics Bureau, said the figures “demonstrated a momentum of restorative growth and gradual recovery”. “We are confident on the economic recovery in the second half of this year,” she added.
Read more here
S Korea central bank warns of deeper contraction
Song Jung-a in Seoul
The Bank of Korea on Thursday forecast the economy to shrink more than expected this year as exports and domestic consumption were hit hard by the coronavirus pandemic.
The central bank now expects Asia’s fourth-largest economy to contract more than 0.2 per cent in 2020, after it shrank 1.3 per cent in the first three months of this year, the sharpest decline since the global financial crisis.
“Looking forward, facilities and construction investment are expected to grow at a moderate pace; however, the pace of recovery in consumption and exports will be slower than previously forecast,” the bank said in a statement.
In May, it forecast the export-driven economy to shrink by 0.2 per cent this year while the IMF forecast a 2.1 per cent contraction for the Korean economy.
However, the BoK left interest rates unchanged at a record low of 0.5 per cent on Thursday, concerned about a property bubble in the housing market in the greater Seoul area.
The base rate was slashed by 75 basis points since March to shore up the economy battered by the pandemic.
The country’s exports dropped 10.9 per cent in June, falling for the fourth consecutive month, while its job market was hammered by the pandemic. The country lost about 352,000 jobs in June, marking the fourth straight monthly decline.
South Korea continued to grapple with rising coronavirus infections brought in from abroad, reporting 61 new cases on Thursday, including 47 imported cases, the highest since end-March.
About 20 of the imported cases were among those who worked at a construction field in Iraq, according to the Korea Centers for Disease Control and Prevention.
Infections coming in from overseas reported double-digit numbers for the past three weeks.
Peru president reshuffles cabinet as Covid-19 cases soar
Gideon Long in Bogotá
Peruvian president Martin Vizcarra has reshuffled his cabinet, ditching his health minister in the wake of some of the highest coronavirus numbers in the world.
He replaced Victor Zamora with surgeon Pilar Mazzetti, who has held the position before.
Despite imposing a strict lockdown at the start of the pandemic, Peru, with a population of 32m, has recorded nearly 340,000 cases of Covid-19.
That is the fifth-highest caseload in the world, and the country has recorded more than 12,400 deaths, the 10th-highest global death toll.
Mr Vizcarra’s popularity has fallen as the pandemic has unfolded.
The president kept his economy minister, María Antonieta Alva, and named economist Rafael Belaunde as his new mining minister.
Gross domestic product crashed by over 40 per cent year-on-year in April and by 33 per cent in May. Mining is the bedrock of the economy.
Despite the grim numbers, Peru has shown signs that the worst of the pandemic might be over. The number of new cases has dropped significantly in recent days.
Big US retail chains to require masks for all shoppers
Mamta Badkar and Peter Wells in New York and James Politi in Washington
Three of the biggest US retail chains will require all customers to wear masks, imposing the restrictions nationwide in the face of a patchwork of measures from government authorities in response to the new coronavirus outbreak.
Walmart, Kroger and Kohl’s announced the face covering policies, which go into effect next week, amid signs the spike of cases in the US south and west was continuing unabated.
About 65 per cent of Walmart’s 5,000 stores and Sam’s Club locations were in regions where face coverings were already mandatory, the company said. Kohl’s said about 70 per cent of its stores are affected by government mandates.
Read more here
Victoria faces ‘cunning enemy’ as 317 new cases reported
Australia’s state of Victoria reported 317 new coronavirus cases on Thursday morning as its premier described the virus as a “cunning enemy” and that it would take about two weeks to see the results of new lockdown measures.
Daniel Andrews, Victoria’s premier, said the new cases took the overall total to 4,750 with 29 deaths. The two fatalities from Covid-19 were men in their 80s, Mr Andrews said.
Metropolitan Melbourne was placed under lockdown last week in a bid to stall the spread of coronavirus infections.
Mr Andrews, pictured, called on residents of Victoria to follow the rules put in place to limit the spread of the virus and to avoid a harsher lockdown.
“It’s very very challenging for us to be across every single case and for every single person to do everything they can to limit the likelihood of infecting someone else,” he said.
“That’s why it’s so so important that these rules are followed.”
North Macedonians vote as coronavirus cases surge
Valerie Hopkins in Sarajevo
North Macedonia’s pro-Western Social Democrats are leading their nationalist rivals in a parliamentary vote by a knife edge, according to a partial vote count.
The vote, which had been postponed from April, took place as the country attempted to cope with a surge in Coronavirus cases, with 94 per 100,000 inhabitants, according to the European Center for Disease Prevention and Control.
The country of 2m people has registered more than 8,500 cases and almost 400 deaths.
More troops head to Melbourne as Covid-19 cases surge
The Australian and Victorian state governments announced on Wednesday that 1,000 more military personnel would be sent to Melbourne in the next few days, as a surge in coronavirus cases continues.
One of the country’s deputy chief medical officers, Michael Kidd, said the new additions were “highly-trained Australian Defence Force personnel” who join 400 other military supporting testing and checkpoint control.
“The additional ADF support will be … doing planning, logistics and intelligence reporting, people supporting the public health response focusing on contact tracing, data management and analysis and on information flow,” Prof Kidd said.
Victoria reported 270 more positive cases on Wednesday, out of 284 diagnosed nationally. “Nationwide, there are 90 people with Covid-19 in hospital, and 85 of those people are in hospital in Victoria,” he said.
In the past seven days, only 4 per cent of cases in Australia have been acquired overseas, according to health department data.
Dubai arrivals to New Zealand test positive
New Zealand has seen three cases of imported Covid-19 infection in the past two days, health officials said on Thursday.
Two people tested positive for Covid-19 after arriving in New Zealand on flights via the United Arab Emirates.
A man in his 60s arrived from Pakistan via Dubai on July 10 and a woman in her 50s who arrived from Dublin via Dubai. Both were put in isolation after travelling to the city of Rotorua.
On Thursday, a child who arrived from Italy on July 4 tested positive. The family is in quarantine in Christchurch.
The health ministry said the most recent case of Covid-19 acquired locally from an unknown source was 75 days ago.
Twitter hack shuts off Covid-19 information flow
Bitcoin scammers who on Wednesday hacked the Twitter accounts of dozens of public figures, including US presidential candidate Joe Biden, Microsoft founder Bill Gates and Tesla chief Elon Musk, have shut off a flow of Covid-19 information from prominent public health experts.
Twitter reacted to the hack by appearing to temporarily stop tweets from users with verified accounts. “You may be unable to Tweet or reset your password while we review and address this incident,” the Twitter Support account tweeted.
The accounts temporarily silenced include those of World Health Organization director-general Tedros Adhanom Ghebreyesus, US Centers for Disease Control and Prevention director Robert Redfield and former UK government scientific adviser Neil Ferguson.
A pause on all verified accounts would mean many national, state and provincial, and local public health officials and organisations are temporarily frozen.
“Apparently all verified (blue check) accounts are unable to tweet at the moment as Twitter tries to get a handle on this breach,” MIT professor Vipin Narang wrote on his unverified Twitter account. “I don’t want a blue check anyway.”
Asia-Pacific stocks cautious ahead of China GDP
Asia-Pacific stocks struggled for direction at the open on Thursday ahead of Chinese economic growth figures and after optimism over a potential coronavirus vaccine lifted global markets.
Japan’s Topix dipped 0.1 per cent, while the Kospi in South Korea was flat and Australia’s S&P/ASX 200 added 0.2 per cent. Futures tip the Hang Seng to open 0.3 per cent higher.
China will release its second quarter gross domestic product figures at 10am Hong Kong time on Thursday (3am Thursday in London, 10pm Wednesday in New York), giving investors insight into the effects of the pandemic on the world’s second-largest economy.
Economists polled by Reuters predict year -on-year growth of 2.5 per cent, up from the 6.8 per cent contraction in the first three months of the year as lockdowns to curb the spread of coronavirus stalled activity.
Global stocks climbed on Wednesday following positive signals on vaccine trials for coronavirus, with the S&P 500 ending the day up 0.9 per cent and the UK benchmark FTSE adding 1.8 per cent.
India urges schools to limit computer screen time
Amy Kazmin in New Delhi
The Indian government has unveiled a plan to help its citizens deal with the fallout from the coronavirus outbreak: limit screen time for the country’s 240m school-age children.
Authorities have urged schools to restrict online classes to two hours a day for children younger than 13 and three hours a day for older students in a bid to ensure children “do not get overly stretched or stressed or get affected negatively owing to its prolonged use”.
Critics say the pandemic will widen India’s educational divide, highlighting disparities between families with and without access to digital devices
Read more here
Carnival cruises taps another $1.3bn to stay afloat
Joe Rennison and Robert Smith in London
Carnival Corporation raised a further $1.3bn secured against its fleet of ships on Wednesday, as the cruise operator seeks to steady itself while burning through more than half a billion dollars per month.
The world’s largest cruise operator has suffered after the outbreak of coronavirus caused sickness and death on several of its vessels and forced the cancellation of voyages.
In April, the Miami-headquartered company offered an interest rate of 11.5 per cent on $4bn of secured bonds backed by the company’s assets, including 83 of its ships.
Read more here
US records 2nd-biggest single-day jump in new cases
Peter Wells in New York
The US reported its second-biggest one-day jump in coronavirus cases on Wednesday, boosted by near-record increases in infections in California and Florida.
A further 65,106 people tested positive for the disease over the past 24 hours, according to Covid Tracking Project data, up from 62,879 yesterday, and about 1,500 short of the July 10 record.
Florida becomes the third US state to top 300,000 coronavirus cases since the pandemic began after reporting another daily increase of more than 10,000 new cases.
A further 10,181 people were confirmed over the past 24 hours to have tested positive for Covid-19, Florida’s health department said on Wednesday morning, up from an almost week-low of 9,194 yesterday.
California reported among its biggest one-day increases in both new cases and deaths. A further 11,126 people tested positive for Covid-19 over the past 24 hours, the state’s health department revealed, up from an almost one-week low of 7,346.
“Please stay home when you can, avoid gatherings, and only visit businesses when you have to,” Los Angeles mayor Eric Garcetti wrote on Twitter.
Oklahoma governor Kevin Stitt has become the first US state leader to test positive for coronavirus. Mr Stitt, who said he was self-isolating at home, made the announcement during a teleconference. Oklahoma has not ordered a statewide pause or reversal of its reopening plans or issued a mask-wearing mandate.
Alabama joined a growing number of southern US states and ordered residents to wear a face covering as it confronts a more than 50 per cent increase in coronavirus cases over the past two weeks. Governor Kay Ivey issued the statewide mask requirement on Wednesday.
A further 855 people died from coronavirus since Tuesday, up from 736, and to the highest level in nearly a week. California (140) and Florida (112) had near-record increases, while Texas (110) reported its biggest one-day jump.
San Francisco delays business reopenings
Businesses in San Francisco that involve close interaction with customers will not reopen this week as planned, city officials announced on Wednesday, extending a pause on a return to normal.
Personal services, such as hairdressers and nail salons, would stay shut until further notice, the city’s top health official said.
“The key indicators of Covid-19 activity … show that a surge of cases and hospitalisations is under way, and it must be brought under control before reopening can continue,” said health director Grant Colfax.
Massage parlours, tattoo and body piercing salons would also be prohibited from opening.
Other activities and businesses that were previously scheduled to reopen either June 29 or July 13 remain on pause, including indoor dining, outdoor bars without food, indoor museums and aquariums, outdoor swimming pools and real estate open houses.
Mayor London Breed said the city would review the restrictions again on Friday.
New York City wavers over easing Covid-19 restrictions
New York City, the biggest US metropolis, will decide this week if Covid-19 movement restrictions will be eased as planned, or the city will have to extend a partial lockdown as cases surge in the country.
While New York expected to move into a “Phase Four” of restrictions that would see many locations and businesses reopened, mayor Bill de Blasio said on Wednesday that there is “a substantial amount of activity that needs to be adjudicated”.
He said under Phase Four, sports teams could start up without audiences, but a number of colleges and universities have already announced that they’re not going to do in person classes or activities.
The mayor said indoor dining would remain “on hold until a point that we feel it’s acceptable”.
Governors Island, a popular 11ha park between Manhattan and Brooklyn boroughs, reopened to the public on Wednesday, while Liberty and Ellis Islands plan to partially reopen on Monday. The Statue of Liberty’s interior will remain closed.
Asia companies fail on cyber-attack prevention during Covid-19
Most small and medium-sized Asia-Pacific businesses have failed to deploy basic cybersecurity measures during the pandemic, when employees are in less secure working-from-home environments, according to PwC, the consultancy.
PwC said it surveyed more than 1,000 such companies in 11 countries and territories during March 2020, as Covid-19 had reached pandemic status.
While most respondents expressed confidence in their cybersecurity measures, only 53 per cent had installed antivirus programs, regarded as an indicator of basic countermeasures.
“The survey reveals a discrepancy between their confidence in their cybersecurity capabilities and their actual cyber-readiness,” said Kenneth Wong, regional cybersecurity and privacy leader at PwC in Hong Kong.
The survey showed only 27 per cent of the companies had a dedicated
cybersecurity team. Mr Wong said 76 per cent of smaller businesses in the region had sustained more than one cyberattack over the past two years, while 57 per cent of those surveyed had been attacked.
“[Small and medium-sized businesses] are viewed as easy targets by attackers, as they do not have the substantial cybersecurity resources dedicated to protecting larger enterprises,” Mr Wong said.
PwC said the surveyed companies identified viruses and malware, web-based attacks and phishing as the top three cybercrimes.
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US stocks closed higher with the S&P 500 up 0.9 per cent, its second straight day of gains, led by shares in the industrial sector. The tech-heavy Nasdaq Composite rose 0.6 per cent, and the Dow Jones Industrial Average climbed 0.9 per cent.
US airline stocks rose as investors savoured good news about a potential vaccine and the prospect of additional government funding. American Airlines jumped 16 per cent to $13.44, followed by a near 15 per cent increase at United Airlines to $36.37. Prices also rose for Delta and Southwest as well as Boeing.
Moderna, the US biotech group, announced late on Tuesday that its experimental vaccine had produced an immune response in all 45 individuals participating in an early-stage trial. A rumour of positive developments for the vaccine candidate being developed by the University of Oxford in the UK also buoyed stocks.
Burberry, the UK luxury fashion group that relies heavily on wealthy tourists visiting its European stores, said it saw no immediate end to coronavirus disruption. European sales were down 75 per cent on a year ago. In contrast, online retailer Asos reported a jump in sales thanks to growth in “lockdown products” such as loungewear.
The Bank of Canada will keep its rates at rock-bottom levels until inflation reaches 2 per cent, as the central bank said it would continue its bond-buying programme. The bank said it will hold its benchmark rate at the “effective lower bound” of 0.25 per cent. In its first policy update under new governor Tiff Macklem, the bank also signalled a willingness to keep supporting an expansion in government debt not seen since the second world war.
Ireland has deferred reopening bars and nightclubs by three weeks until August 10 as a rise in Covid-19 infections spurs fear of a second coronavirus wave. Some 3,500 pubs that don’t serve food had been preparing to reopen next Monday but they have now been directed to stay closed. The sector closed in March, with the loss of 50,000 jobs.
About €40bn of France’s new €100bn coronavirus recovery plan will go towards protecting and modernising industry and reducing dependence on foreign countries, according to Jean Castex, the new French prime minister. Mr Castex was giving details in the National Assembly of President Emmanuel Macron’s promise on Tuesday to allocate more money to the national economic recovery from the Covid-19 pandemic.
Rishi Sunak, the UK chancellor of the exchequer, said British companies should not expect the government to help relieve their growing debt burden and that it is not sensible for the government to take equity stakes in companies. His remarks contrasted with those made by Andrew Bailey, Bank of England governor, who has said the high level of corporate debt might undermine the recovery and the public sector should ensure a response to “the need for equity capital”.