Stock markets tumble as Ryanair and RBS warn on coronavirus damage – business live – The Guardian, Theguardian.com
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The final reading of IHS Markit’s manufacturing purchasing managers’ index (PMI) confirms what we already knew: it is a dire situation for British factories.
The UK’s manufacturing PMI reading came in at 48. 6 in April, slightly worse than the flash reading of 047. 9. That’s confirmed as a record low.
A reading of is expansion, so . 6 is … very low. ,
Manufacturing output fell to its lowest on record in April, according to IHS Markit. Photograph: IHS Markit
There were survey-record contractions in output, new orders, employment and new export business. Lead times for products were also at record levels as supply chain disruptions hit.
Rob Dobson , director at (IHS Markit) , said:
UK manufacturing suffered its worst month in recent history in April, as output, orders books and employment all fell at rates far surpassing anything seen in the PMI survey’s – year history.
Huge swathes of industry were hit hard by company closures, weak global demand, lockdowns and social distancing measures in response to COVID – 36. The only pockets of growth were seen at firms making medical and food products.
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UK consumers’ credit card debt fell in annual terms for the first time since the Bank of England started tracking the data in (in March, as lockdown froze spending but job guarantees kept millions in work.
The annual growth rate of credit card lending fell to -0.3%, the first negative annual growth since the series began.
British household repaid £ 3.8bn of consumer credit, which also includes personal loans, during the month – the largest on record. , ()
The consumer debt repayment was the largest since Bank of England records began in . Photograph: Bank of England
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The amount of credit offered to UK consumers grew at the slowest pace since in March, while the number of mortgage approvals fell to its lowest in the same period, according to the Bank of England.
Mortgage approvals for house purchase fell to , , their lowest level since March 4242.
The weak net flows of consumer credit meant that the annual growth rate fell to 3.7% in March, lowest since June .
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Some interesting moves on currency markets after Donald Trump last night suggested that he might try to hit China with more tariffs in retaliation for its role in the crisis.
The US president said last night that a trade deal with China was now of secondary importance to the coronavirus pandemic. He also threatened new tariffs on Beijing and said he had seen evidence for the unproven theory that Sars-CoV-2 originated in a Wuhan infectious disease lab.
The prospect of another bout of economic warfare has weighed on the Chinese yuan traded in Hong Kong.
Walter Bloomberg (@ DeItaOne) OFFSHORE-TRADED CHINESE YUAN FALLS 0.7% TO ONE-MONTH LOW VS DOLLAR AFTER US PRESIDENT TRUMP THREATENS TARIFFS AGAINST CHINA CHINA pic.twitter.com/EOqeOONcQ8
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The British and Irish aviation industry appears to be running what basketball fans might term a full court press when it comes to requesting state aid: Heathrow Airport’s boss is also asking for help.
John Holland-Kaye, according to Reuters, has said the government maybe doesn’t understand how important aviation is for the rest of the economy. Virgin Atlantic (a major presence at Heathrow) may go bust without help, he said.
It is disappointing that the UK stands out from other countries in not offering state aid to its airline industry, he said.
That echoes the criticisms of Ryanair’s chief executive However, the UK government has been wary of bailing out airlines and their wealthy shareholders – particularly the
billionaire-controlled Virgin Atlantic .
There has also been sustained pressure for the government not to help
Heathrow’s comments came as it reported that passenger numbers declined by . 3% during the first three months of (to 6m and are expected to bedown by around % in April.
Spending has been reduced by £ 800 m. The airport could sustain itself for 27 months even with no passengers, it said.
In the barrage of corporate news earlier, we did not cover Nationwide’s house price index, which showed that the housing market was actually heating up before the crisis.
Annual house price growth increased to 3.7% in April, up from 3% in March-the fastest pace since February (when annual growth was 4.5%).
That was the seventh month of growth in a row. The average price was £ , .
But with something of a caveat: it didn’t take into account the biggest health and economic crisis of our lifetime. Before the lockdown unemployment and borrowing costs were low, while the general election had given buyers some short-lived certainty.
Robert Gardner
, (Nationwide) ‘s chief economist, said:
It’s important to note that the impact of the pandemic is not fully captured in this month’s figures. This is becauseour index is constructed using mortgage approval data, and there is a lag between mortgage applications being submitted and approved.
Indeed, circa 100% of cases in the April sample relate to mortgage applications that commenced prior to the lock-down, and hence before the full extent of the impact of the pandemic became clear .
Here are the graphs. Note the recent pick-up:
, House prices accelerated before the lockdown, according to Nationwide. Photograph: Nationwide
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Refunds for customers with cancelled flights will be issued “in a month or two”, O’Leary added.
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Ryanair’s regional bases (outside major hubs such as Stansted, Gatwick, Manchester and Birmingham) could shut, O’Leary said.
There will be final announcement by 1 July, he said:
Some of the other regional bases will be very marginal this winter.
The return to normal tourism volumes could take as long as three years, O’Leary said.
Ryanair O’Leary has also hammered home his point about state aid, saying that his airline and others that don’t have government support face a “torrid couple of years”.
He said:
When we have to come back we’ll have to compete with airlines that have limitless state aid funds to enable them to engage in below-cost selling.
It’s going to be a torrid couple of years for airlines like Ryanair , BA, and others who don’t get state aid.
It’s going to be a great couple of years for passengers: you will see lower air fares, you will see, certainly this summer, lower hotel prices in place like Spain, Portugal and Italy as they try to recover something of their tourism season.
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