Daniel Casali provides a round-up of key market activity during the week of 1st June.
- Estimates have suggested that out of the UK Bounce Back Loan Scheme, which is currently lending to 608,000 borrowers, 40-50% would not be paid back, or approximately £8-9bn.
- YouGov and the Centre for Economic and Business research have indicated that consumers are highly pessimistic about personal finances, despite household confidence stabilising. According to their index, confidence rose in May by 3 points, to 95.8, however this remains below the level for optimism: 100.
- Due to the health and economic crisis resulting from COVID-19, public spending in the UK is set to surpass £1 trillion this year.
- The Congressional Budget Office has suggested that the effect of COVID-19 on the US economy could last for a decade. Economic output in the US could fall by 3% between 2020-2030. This would be equivalent of $7.9 trillion.
- The total of workers furloughed in the UK is now 8.7 million, an increase of 300,000 from the previous week. The £14 billion a month scheme is now supporting 25% of the workforce.
- ADP unemployed figures from the US showed 2.76m job losses in May, which was better than the consensus forecast.
- According to a Bloomberg report, home prices in the UK fell by 1.7% in May. Further bad news for the housing industry came from the BOE, who suggested that in April, mortgage approvals fell by 15,800.
- Germany passed a €130 billion stimulus package to help against the effects of COVID-19. This was 30% higher than previously expected.
- The European Central Bank has approved further stimulus measures to tackle the impact of COVID. The total stimulus is now €1.35 trillion
- £4 billion was invested into retail funds by savers during April, after a £9.7 billion outflow in March, according to the Investment Association. £969m of this was invested in ‘responsible investment funds’.
Investment does involve risk. The value of investments and the income from them can go down as well as up. The investor may not receive back, in total, the original amount invested. Past performance is not a guide to future performance. Rates of tax are those prevailing at the time and are subject to change without notice. Clients should always seek appropriate advice from their financial adviser before committing funds for investment. When investments are made in overseas securities, movements in exchange rates may have an effect on the value of that investment. The effect may be favourable or unfavourable.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
Smith & Williamson Investment Management LLP
Authorised and regulated by the Financial Conduct Authority.
Registered in England No. OC 369632. FRN: 580531
Smith & Williamson Investment Management LLP is part of the Tilney Smith & Williamson group.
© Tilney Smith & Williamson Limited 2021
This article was previously published on Smith & Williamson prior to the launch of Evelyn Partners.