Time for a quick recap
The single currency touched $1.1467 against the US dollar for the first time since March, after days of tough talks in Brussels, which are resuming this afternoon.
Traders are hopeful that an agreement will come, after opponents of the plan such as the Netherlands and Austria appeared to accept, in principle, that grants should be part of the package.
But there’s no agreement yet on the details – with EU president Charles Michel trying to rally all sides around a compromise. A deal may come tonight, or leaders could still require another summit.
But chief economist Andy Haldane also told MPs that the recovery is underway, with the economy clawing back around half its losses in the pandemic.
Roughly half of the roughly 25% fall in activity during March and April has been clawed back over the period since.
“We have seen a bounceback. So far, it has been a ‘V’. That of course doesn’t tell us about where we might go next.
The surge in visitors back to high streets and retail parks has also faded, new research shows. Footfall in the shops only rose 5% last week, down from over 10%.
UK households are also still being squeezed, with many curbing their use of unsecured credit.
Covid-19 has also claimed music magazine Q, which is to close after suffering falling circulation.
But pharmaceutical firms say they are making progress. AstraZeneca has reported that the Oxford Covid-19 vaccine is showing promising signs…
In the markets, the FTSE 100 has closed 28 points lower at 6261, a drop of 0.5%. European markets rallied, though, on hopes of a deal in Brussels. Germany’s DAX and Italy’s FTSE MIB both ended 1% higher, with France’s CAC up 0.5%.
Here’s our latest report on the summit:
While the Covid-19 liveblog is here:
A little more from Andy Haldane:
Back on Wall Street, the S&P 500 has now returned to its level on 31 December 2019, meaning it has recovered much of its Covid-19 losses.
Two Bank of England policymakers have updated MPs about the impact of Covid-19 on the UK economy, at their reappointment hearings today.
Chief economist Andy Haldane told the Treasury committee that there will “inevitably” be some long-term scarring of the economy as a result of the Covid crisis, including a hit to employment.
The two key channels through which scarring of the economy’s longer-term potential might arise is through reduced business investment and dynamism, hitting the stock of physical capital, and through high unemployment depleting the skills of the workforce and shrinking the stock of human capital.
In the MPC’s illustrative scenario published in May, it was assumed that scarring of businesses resulted in the productive capacity of the UK economy being persistently lower by around 1¼%. There was little assumed scarring of the labour market. In practice, there is the potential for scarring effects in the labour market – for example, if sectoral or skills mismatches between workers and companies make it difficult for people to find new jobs, raising the economy’s equilibrium rate of unemployment and lowering its productive potential. Whether the economy experiences scarring, through businesses or workers, will depend on the actions taken by firms, as well as on policy actions taken by Government.
Professor Silvana Tenreyro, an external member of the Monetary Policy Committee, predicted that Covid-19 will have a complex impact on the economy:
Rather than a radical change, I think this shock could accelerate pre-existing technological trends; for example, more remote working, a switch to online retail, distance learning and more investment in artificial intelligence. Added to pre-existing climate change concerns, there may be a permanent shift away from long-distance air travel. These changes may have knock-on macroeconomic impacts. More remote work, e-commerce and distance learning could weight on the demand for and the rental price of commercial real estate.
The switch to online retail and greater AI could have implications for aggregate productivity, as well as driving changes in the share of income accruing to workers versus capital. Changes are also likely to depend on the success of policies put in place – countries have the opportunity to shape the nature of any turning point coming from the crisis.
The music monthly Q is to be shut after more than three decades after its publisher was unable to find a buyer as the coronavirus pandemic accelerates the shift of readers and advertisers to online media.
The German-owned Bauer Media, which owns magazines in the UK including Grazia and Empire, said that the 34-yea- old magazine would cease publishing immediately.
Last month, the company said that it had entered advanced talks to sell the music monthly and four other titles, while also deciding to cease publication of three others including Planet Rock.
While it has found buyers for some titles – including Your Horse, Sea Angler and Car Mechanics to specialist publisher Kelsey Media – Q and stablemate Modern Classics could not be saved.
“We have been unable to find equivalent new owners for Q and Modern Classics and have decided to cease publication of these titles with immediate effect,” said Chris Duncan, chief executive of UK Publishing at Bauer Media.
“We thank those teams for their work on these iconic titles.”
Q enjoyed sales of just over 200,000 at the turn of the century when it was a must-read title. But by the end of last year sales had dwindled to 28,000, according to official figures from the Audit Bureau of Circulations.
In May, the publisher began a review of the future of 10 magazines with options including complete closure, moving to online-only, a sale or merger with another title.
“There tough decisions were made to help us recover and rebuild through the COvid-19 crisis. We will continue that process with our remaining portfolio of world class titles.”
Meanwhile in Brussels…..
Amid all the optimism about the “promising” Oxford vaccine, biotech investor Peter Kolchinsky is recommending caution:
AstraZeneca’s shares have now dipped back from that record high, but still up around 1% today.
The company has told shareholders that the latest trial results from Oxford won’t “impact” its financial guidance this year, as the cost of developing the vaccine will be offset by funding by governments and international organisations.
There’s not much reaction in the wider stock market to today’s trial update, with the FTSE 100 still down around 0.6% or 38 points at 6252.
That’s probably because a lot of good vaccine news is already ‘priced in’ — with so many trials underway, investors are hopeful that some will be effective, and reach the mass market.
AstraZeneca has also updated the City about the Oxford Covid-19 vaccine, which it is producing.
It highlights that interim results from the trials show that AZD1222 induced a T-Cell response (a key part of the body’s immune response), as well as antibodies (which bind to, and neutralise, the virus).
Professor Andrew Pollard, Chief investigator of the Oxford Vaccine Trial at Oxford University, says that a ‘two-dose’ strategy may work well:
“The interim Phase I/II data for our coronavirus vaccine shows that the vaccine did not lead to any unexpected reactions and had a similar safety profile to previous vaccines of this type. The immune responses observed following vaccination are in line with what we expect will be associated with protection against the SARS-CoV-2 virus, although we must continue with our rigorous clinical trial programme to confirm this. We saw the strongest immune response in participants who received two doses of the vaccine, indicating that this might be a good strategy for vaccination.”
Mene Pangalos, AZ’s executive vice president for BioPharmaceuticals R&D, says the results give the firm confidence.
“We are encouraged by the Phase I/II interim data showing AZD1222 was capable of generating a rapid antibody and T-cell response against SARS-CoV-2. While there is more work to be done, today’s data increases our confidence that the vaccine will work and allows us to continue our plans to manufacture the vaccine at scale for broad and equitable access around the world.”
Speaking of vaccines… medical journal The Lancet has just reported that preliminary results show that Oxford’s Covid-19 vaccine is safe and generates an immune response.
Trial data also shows that it led to neutralising antibodies in trial subjects who received a second dose.
Further clinical trials are still needed (and indeed are already underway in the UK and Brazil, and soon in the US too), but it’s a promising sign.
Shares in AstraZeneca are still proudly at the top of the FTSE 100,, up 3.5% at £95.12, on track for a record closing high.
The US stock market has started the new week with small gains.
The Nasdaq index is up 28 points, or 0.3% at 10,532, as it continued to outperform the rest of Wall Street.
The Dow is up just 4 points, or 0.01% at 26,676.
Traders are juggling concerns about the spike in Covid-19 cases with optimism that a Covid-19 vaccine will be developed.
Any readers with a spare £5.5m may be interested to know that Mark Carney’s old house is on the market.
The former Bank of England governor has left the UK, and the Victorian house rented by the Carney family in South Hampstead is now on the market.
And what a house! Eight bedrooms, an cavernous open-plan kitchen, stylish living space and an 81-foot rear garden must have made an agreeable escape when Bank duties allowed. The Mail have published the full photo gallery from estate agents Aston Chase (after the family left, alas, so there are no snaps of Mr Carney wearing an apron or mowing the lawn)
More encouraging Covid-19 treatment news, this time from Pfizer:
Reuters has the details:
German biotech firm BioNTech and U.S. drugmaker Pfizer on Monday reported additional data from their experimental coronavirus vaccine that showed the vaccine was safe and induced an immune response in patients.
The results were disclosed from a trial in Germany testing 60 healthy volunteers, and come after the companies earlier this month reported data from a corresponding early-stage trial in the United State
Boris Johnson’s spokesman has told reporters that the government ‘stands ready’ to help Marks & Spencer staff, with 950 facing redundancy.
“We know that this will be worrying news for M&S employees and their families and we stand ready to support them. Affected employees will be able to access a wide-range of support including universal credit and the job seekers’ allowance.”
Andy Barr of online price-tracking website www.alertr.co.uk, says M&S is right to adjust to the changing retail landscape this year:
“As we all slowly adjust to the ‘new normal’ we can see that retailers are making changes internally to ensure a better future for all. Marks & Spencer are just the latest retailer to come out and announce job cuts, they’re not the first by any means – and we must remember that the ‘never the same again’ programme to restructure the brand was announced earlier this year.
And while it’s never nice to hear about job losses, especially in the current climate, the brand is right to say that some consumer shopping habits will never be the same again. Online shopping was making waves long before Coronavirus, but lockdown has only further boosted this. We hope that by making these kinds of cuts now, hopefully retailers will be better off for it the future.