BUSINESS NEWS - APRIL 2021-(4)

BUSINESS NEWS

Written 21 April 2021

Welcome to our round up of the latest business and Covid-19 news for our clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you through these tough times.

This week, the positive news is that the average number of new daily Covid-19 cases in the UK has fallen substantially since the start of the year, and vaccinations continue with more than 10.5 million people now having had their second jab and over 33 million their first.

Antivirals Taskforce to roll out innovative home treatments this autumn

The Antivirals Taskforce will identify treatments for UK patients who have been exposed to COVID-19 to stop the infection spreading and speed up recovery time.

The taskforce will search for the most promising novel antiviral medicines that can be taken at home and support their development through clinical trials to ensure they can be rapidly rolled out to patients as early as the autumn.

The taskforce will also look at opportunities to onshore the manufacture of antiviral treatments.

The aim is to have at least 2 effective treatments this year, either in a tablet or capsule form that the public can take at home, following a positive COVID-19 test or exposure to someone with the virus.

The latest figures on the economy

As the lockdown gradually eases, the latest Office for National Statistics (ONS) indicators for the UK economy and society show some positive news about the reopening of the economy.

 

Estimates for UK seated diner reservations on 12 April 2021 were at 79% of their level seen on the equivalent Monday of 2019. This is the first time the level has exceeded 2% since before the announcement of the latest lockdown in England on 4 January 2021 and coincides with the easing of hospitality restrictions in England on 12 April 2021 (OpenTable).

Total UK online job adverts on 9 April 2021 equalled their February 2020 average level to become the highest level seen since 6 March 2020; this was partly driven by a notable increase to the “catering and hospitality” category, which also reached its highest level since March 2020 (Adzuna).

There were 25,320 new VAT reporters in March 2021, the highest number of new reporters seen since August 2016 when there were 26,440 (Her Majesty’s Revenue and Customs (HMRC)).

In Quarter 1 (Jan to Mar) 2021, a net 1% of 287,880 firms reported an increase in turnover at the total industry level when compared with the previous quarter (Her Majesty’s Revenue and Customs (HMRC)).

Retail footfall was strongest in the West Midlands and the East of England in the week to 10 April 2021, each at 46% of their level in the equivalent week of 2019; retail footfall was weakest in Northern Ireland at 35% of its level in the equivalent week of 2019 (Springboard).

There were 17,881 company incorporations and 5,059 voluntary dissolution applications in the week to 9 April 2021, a 19% increase and 2% decrease from the previous week, respectively (Companies House).

See: Coronavirus and the latest indicators for the UK economy and society - Office for National Statistics (ons.gov.uk)

Younger people bear the burden of unemployment

The ONS figures show that over the past year there were over 800,000 payroll jobs lost in the UK and the under 35’s accounted for 80% of losses. The unemployment rate is now dipping thanks to the easing of lockdown, although experts expect it to peak towards the end of the year as the Job Retention Scheme ends and to lag behind the rest of the economy.  Overall unemployment is 311,000 higher than a year ago.

The mortgage guarantee scheme

This government has introduced a mortgage guarantee scheme. The scheme is open to new 95% mortgages until 31 December 2022, with participating lenders offering 95% mortgages under the government guarantee from 19 April 2021.

 

The idea is to support a new generation in realising home ownership. The scheme will increase the availability of 95% Loan-to-value mortgage products, enabling more households to access mortgages without the need for large deposits.

See:  The mortgage guarantee scheme - GOV.UK (www.gov.uk)

BREXIT NEWS

EU Parliament committee backs Brexit trade deal

The European Union Parliament committees have backed the new trade deal between the 27-nation bloc and the UK pushing it onward to the full legislature for a final vote expected later this month.

Northern Ireland

The news in recent weeks has been dominated by the Northern Ireland (NI) border discussions.

Last month a meeting of the EU-UK body overseeing the NI Brexit arrangements and aimed at resolving issues with the Irish sea border has had mixed reactions amongst NI politicians. No change was reported in extending the request by the UK to extend the border grace period, due to end in April. The UK and business groups have asked the EU for an extension until 2023.

The UK has delayed some Irish Sea border checks without EU agreement and the UK and EU have agreed to intensify talks following a recent meeting of negotiators.

One of the key problems is the check on food and agricultural products entering Northern Ireland and the UK rejects the idea of aligning to EU rules on plant and animal health measures. The UK continues with its “Trusted trader” agreement to reduce border administration controls on traders who have a secure audit trail on their supply chains. We will have to wait and see where the negotiations lead.       

Financial services

Reports this week show that many banks and financial institutions have moved thousands of jobs and £1 trillion of assets (approximately 10% of total assets in the UK banking system) out of the UK and into the EU because of Brexit.

Banks, insurers, pension funds and wealth managers had hoped that the UK would secure access to the EU, but the Brexit deal does not cover financial services, one of the UK's most important industries, and the EU has not yet granted the UK financial services industry “Equivalence”. Equivalence is a system which can be used to grant domestic market access to foreign firms in certain areas of financial services. It’s based on the principle that the countries where they are based have regimes which are ‘equivalent’ in outcome. The EU has not yet reached a decision regarding the UK and requires more information on what the UK will be doing in the future.

Traffic management measures in Kent stood down as trade returns to normal

The government has announced that the Kent Access Permit (KAP) and the M20 moveable barrier will be stood down from 20 April, as delays have been prevented thanks to hauliers arriving at the border prepared.