Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Analysts at the ratings agency Moody’s expect the UK economy to contract by 10.1% this year, according to Reuters.
Moody’s released a statement (paywall) on Friday on Britain’s economic outlook. It said chancellor Rishi Sunak’s summer statement, which included stimulus of up to £30bn ($38bn), “adds further policy support to mitigate coronavirus-induced shock.”
But Reuters reports Moody’s expect Britain to face the steepest peak-to-trough decline in GDP in the G20.
Meanwhile Britain’s deficit and public debt ratio are expected to significantly deteriorate this year, given the scale of borrowing-funded stimulus measures amid lower tax receipts during the crisis. It predicted debt will surge as a share of GDP by 24 percentage points.
“We forecast a contraction of 10.1% in the UK's GDP for this year, but expect a gradual subsequent recovery on the back of the easing in lockdown measures, with growth rebounding to 7.1% next year.”
UK retailers sounded the alarm on Friday over the risks of Britain leaving its Brexit transition period without an EU trade deal, after intensified talks failed to break the deadlock this week.
The cost of supermarket staple items, such as beef, cheese, and oranges, if a deal is not agreed, according to the British Retail Consortium (BRC).
If a tariff-free trade deal with the bloc is not negotiated in time for the end of the Brexit transition period on 31 December, tariffs of over 5% will be applied to some 85% of foods imported from the EU, it said.
“With the clock ticking down to 31 December, the government must put consumers first and agree a deal that avoids tariffs and minimises the impact of non-tariff barriers,” said Andrew Opie, the director of food and sustainability at the BRC.
Stocks in Europe fell on Friday as mounting job losses across the continent further raised the prospect of a sluggish recovery from the coronavirus crisis.
UK retailers John Lewis and Boots announced thousands of job cuts on Thursday (9 July), adding to a long list of airlines and industry titans that have shed employees in recent weeks.
The pan-European STOXX 600 index (^STOXX) fell by around 0.3% on the open, while London’s FTSE 100 (^FTSE) declined by 0.4%. Germany’s DAX (^GDAXI) fell by more than 0.2%, while France’s CAC 40 (^FCHI) was almost 0.5% in the red.
“Markets here in Europe have opened lower this morning, and look set to finish the week very much on the back foot, as it becomes increasingly apparent that any economic recovery is unlikely to be V-shaped in nature, with a wide range of companies starting to announce thousands of job losses this week,” said Michael Hewson, chief market analyst at CMC Markets UK.
Stocks in Asia closed out the week in the red after authorities in Hong Kong suspended schools amid a spike in locally transmitted coronavirus infections.
What to expect in the US
Futures were also pointing to a lower open for US stocks on Friday.