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UK is suffering fastest and deepest slump in “possibly several centuries”, warns BoE policy maker Jan Vlieghe
Another 4.4 million Americans out of work Vlieghe says UK faces historic shock UK economy shrinking fast Eurozone PMI also hits record low
Stocks dented by report on ‘flop’ clinical trial
Updated
A member of staff at Vauxhall car factory cleaning and disinfecting a work station Photograph: Colin Mcpherson/The Guardian Graeme Wearden and Jasper Jolly
Thu 23 Apr 2020 18.29 BST First published on Thu 23 Apr 2020 08.04 BST
Share on Facebook Share on Twitter Share via Email Key events Show 6.25pm BST 18:25 Closing summary: Markets rise above dire economic data 5.59pm BST 17:59 Stocks dented after FT reports antiviral drug study flops 5.10pm BST 17:10 Oil prices rebound – but remain far off start of week 4.19pm BST 16:19 Government to ban ‘aggressive rent collection’ for high street during crisis 2.52pm BST 14:52 US economy shrinking fast 2.11pm BST 14:11 Airline industry predicts surge in UK job losses 2.01pm BST 14:01 US jobless claims: What the experts say Live feed Show 6.25pm BST 18:25
Closing summary: Markets rise above dire economic data Stock markets have gained ground on Thursday as investors look beyond the current certain recessions in major economies towards hopes of gradual recovery.
European stock markets, including the FTSE 100 gained some ground, as did Wall Street.However, US stocks have been dented by the FT’s report that a promising antiviral drug has not performed as expected in trials in China.
The relative stability on stock market indices belied a day of dire economic data.Here are some of the most noteworthy developments today:
One of the Bank of England’s top policymakers, Jan Vlieghe, has warned that the UK could be suffering its worst economic shock in several hundred years .An additional 4.4 million Americans filed unemployment claims last week, as losses have wiped out all the job gains made since end of the last recession.

UK purchasing managers’ index (PMI) data showed that Britain’s economy is shrinking at an unprecedented rate .It was a similar tale in the eurozone data.Oil prices rebounded further after this week’s historic falls, but still remained far below the start of the month.
In the UK, the government plans to ban landlords from using “aggressive” debt collection tactics to keep the high street afloat.You can continue to follow our live coronavirus coverage from around the world:
In the UK, key workers and their families can get tests from Friday, Hancock says
Coronavirus UK live: key workers and their families can get tests from Friday, Hancock says Read more
In the US, former presidential candidate Elizabeth Warren says her brother has died of Covid-19
Coronavirus US live: Elizabeth Warren says her brother has died of Covid-19 Read more
And in our global coverage, France could unveil lockdown exit plan on Tuesday
Coronavirus live news: US may never restore funding to World Health Organization, says Mike Pompeo Read more
Thank you for reading, and join us next week for more live coverage of business, economics and financial markets.JJ
Facebook Twitter 5.59pm BST 17:59
Stocks dented after FT reports antiviral drug study flops One of the drugs that scientists hoped might help fight Covid-19, remdesivir, has not performed well in clinical trials, according to the Financial Times (£) .
US stock market indices have quickly lost some of their earlier gains after the report was published.

The S&P 500 is up 0.6% and the Dow Jones industrial average has now only gained 0.7%.
And the news could barely have come out in a worse way for the embattled World Health Organization: it was posted to its website in error.
Investors had latched onto reports that the antiviral medication , made by pharma company Gilead Sciences, had been an effective treatment, but the FT reports that the document suggests the drug did not deliver the expected benefits.From the FT:
“In this study of hospitalised adult patients with severe Covid-19 that was terminated prematurely, remdesivir was not associated with clinical or virological benefits,” the filing said.
Gilead’s statement said the study results are “inconclusive” and that other studies had suggested a benefit particularly for patients treated early.*
*This post was amended to add Gilead’s statement.
Updated at 6.29pm BST
Facebook Twitter 5.45pm BST 17:45
The oil price rebound puts West Texas Intermediate futures pricse on course for their best day on record apart from…the previous two days.
WTI is up by 29%, beaten only by Tuesday’s 127% gain and Wednesday’s 38% daily increase.
Before the current crisis, the biggest rise in WTI futures prices was 18%, on 22 December 2008.
Facebook Twitter 5.23pm BST 17:23
It’s all going swimmingly today on US stock markets – even in the teeth of more spectacularly bad economic data from the world’s largest economy.
The S&P 500 is up by 1.2%, while the Dow Jones industrial average has gained 1.4% and the Nasdaq is up 1.3%.
They are all buying the rumour of (very faint) glimmers of hope for the economy’s prospects later in the year.
“The market is ignoring all the weak data so far, it’s priced in,” said Priya Misra , head of global rates strategy for TD Securities .
“We have moved ahead from the second quarter being awful,” Misra said, adding that market participants were turning towards the outlook for the third and fourth quarters.
Facebook Twitter 5.10pm BST 17:10
Oil prices rebound – but remain far off start of week Oil markets are at it again in what will go down as a truly historic week for the commodity.
Brent crude futures prices, the international benchmark, have rallied by $2 per barrel today – a heady 10% gain – to hit $22.39.However, such has been the turmoil on oil markets this week that it still remains far below Tuesday’s opening price of $26.33.
Brent crude futures prices recovered somewhat on Thursday – but still remained far below levels earlier this month.Photograph: Refinitiv
On the US benchmark, West Texas Intermediate, futures prices have jumped by more than 30% today.One barrel for June delivery will now set back a trader $17.56.
Remember, the storage shortage on Monday caused WTI prices to turn negative, plunging as low as -$40 , as traders paid others to take oil off their hands for fear they would be unable to store it.

That was partly due to technical factors to do with the futures market, but it wouldn’t have happened if the market were not already under severe strain.
Updated at 5.10pm BST
Facebook Twitter 4.32pm BST 16:32
European markets lost a tiny bit of momentum at the end of the trading day: the FTSE 100 provisionally closed up by 0.9%.
The Euro Stoxx 600 gained 1.1%.
Facebook Twitter 4.28pm BST 16:28
Grey’s monument stands at the top of an empty street in Newcastle upon Tyne as shops and business remain closed and the population in lockdown in the UK’s continuing fight against the coronavirus.Photograph: Owen Humphreys/PA
Retailers and the hospitality industry are – perhaps understandably – pretty pleased with the government’s move to stop landlords pushing shuttered businesses over the edge.
Helen Dickinson , chief executive of the British Retail Consortium , which represents shops, said the measures would “give retailers some vital relief and help safeguard millions of jobs all across the country”.
Rents are a huge burden for retailers that must be paid even where shops are closed.We have raised this problem with government and today’s announcement protects firms who – during these extraordinary times – are unable to meet their rent obligations.
Kate Nicholls , chief executive of UK Hospitality , which lobbies on behalf of restaurants, bars and the like, said it would give “some very valuable breathing room”.
Many businesses in our sector have no revenue whatsoever coming in, so paying rents has been out of the question for some.This extra space will allow businesses to survive and to find a way to work with landlords.

If social distancing measures are to be in place for some time, as we now believe they will, this measure may need to be extended to ensure that businesses can survive.
Facebook Twitter 4.19pm BST 16:19
Government to ban ‘aggressive rent collection’ for high street during crisis The government plans to ban landlords from using “aggressive” debt collection tactics such as winding up orders and statutory demands for high street shops who cannot pay their rent because of the coronavirus.
The business department also urged landlords to “give their tenants the breathing space needed” in the hopes that companies can survive the lockdowns.
Legislation will ban the use of winding up orders and statutory demands, and will also prevent landlords from using Commercial Rent Arrears Recovery (CRAR) unless they are owed 90 days of unpaid rent.
On the other side of the coin, the announcement said:
The government calls on tenants to pay rent where they can afford it or what they can in recognition of the strains felt by commercial landlords too.
Business secretary Alok Sharma said:
In this exceptional time for the UK, it is vital that we ensure businesses are kept afloat so that they can continue to provide the jobs our economy needs beyond the coronavirus pandemic.
I know that like all businesses they are under pressure, but I would urge them to show forbearance to their tenants.I am also taking steps to ensure the minority of landlords using aggressive tactics to collect their rents can no longer do so while the Covid-19 emergency continues.
Facebook Twitter 4.03pm BST 16:03
European Central Bank President Christine Lagarde looks on during a debate on the 2018 annual report of the ECB, at the European Parliament in Strasbourg.Photograph: Vincent Kessler/Reuters
Some more warnings from top officials on the depth of the economic crisis hitting Europe: this time it’s Christine Lagarde.
The European Central Bank president thinks eurozone output could fall by 9% in 2020 in a middle scenario, according to sources cited by Reuters.In the worst-case scenario it could be as bad as a scarcely believable 15% .
For comparison, World Bank data suggest GDP fell by 4.5% in 2009 as the financial crisis raged.
Here’s the Reuters report:
European Central Bank Governor Christine Lagarde told EU leaders on Thursday that the coronavirus pandemic could cut up to 15% of their economic output, a diplomatic source said.
Asked about Lagarde comments on Thursday afternoon to a videconference of the 27 national EU leaders discussing economic recovery from the pandemic, the source said she presented “a bleak outlook: a downturn in the range of 5-15%.”
Facebook Twitter 3.50pm BST 15:50
With 40 minutes left of European trading, stock markets are on the front foot.
The FTSE 100 has gained 1.2%, led by big jumps for three housebuilders as they prepare to get back to work, while the mid-cap FTSE 250 is up by 1.8%.
The Euro Stoxx 600 has risen by 1.2%, helped by France’s Cac 40 and Italy’s FTSE MIB – up by 1.6% and 2% respectively.
Facebook Twitter 3.39pm BST 15:39
Time for a recap….
The Bank of England has warned that Britain faces its worst slump in at least a century, on a day dominated by more grim economic data.
BoE policymaker Jan Vlieghe warned that the Covid-19 pandemic, and the ongoing lockdown, was having a ‘highly asymmetric’ impact .
Based on the early indicators, and based on the experience in other countries that were hit somewhat earlier than the UK, it seems that we are experiencing an economic contraction that is faster and deeper than anything we have seen in the past century, or possibly several centuries.
Vlieghe also denied that the Bank of England’s stimulus measures amounted to Zimbabwe-style money printing (even though they might look like it!) .

The difference, he insisted, is that the BoE is in charge …and will get inflation back to target.
His comments came as Britain’s economy slumps at a record pace .The latest PMI survey shows that UK service sector firms and factories are contracting much faster than in the financial crisis.
James Picerno (@jpicerno) UK economy fell off a cliff in April, according to this month’s Composite PMI, which exceeds “anything seen in the PMI survey’s 22-year history,” says Chris Williamson, chief business economist at IHS Markit: https://t.co/4HjOhneJWO pic.twitter.com/vgkAMlJSyk
April 23, 2020 The downturn is just as grim in the eurozone , where France and Germany both posted record-breaking poor PMIs.
Coronavirus lockdown tips UK economy into biggest slump on record Read more
Firms across Europe, and in the US, report a slump in new orders and activity and a jump in unemployment.
In the US, another 4.4m Americans have filed new jobless benefit claims, as its private sector also reels from the pandemic.
US unemployment applications reach over 26m as states struggle to keep pace Read more
The cost of the crisis is rising fast.Britain’s Debt Management Office has outlined plans to borrow £225bn between April and July, to cover the government’s emergency response.
But while physical restrictions could last for months, there are signs that parts of the economy are starting to reopen.

Jaguar Land Rover says it will restart some factories next month .Two UK housebuilders, Taylor Wimpey and Vistry, are also planning to begin work soon .
That’s Graeme Wearden signing off for the day.

Jasper Jolly will take over through to the European stock market close.
Facebook Twitter 3.16pm BST 15:16
Jillian Ambrose
Bernard Looney, the boss of BP, has warned that the oil company faces a “brutal business environment” ahead of its first quarter financial results next week.
Looney will deliver his first financial update as BP’s new chief executive on Tuesday, amid the deepest oil price crisis on record and just one week after oil prices turned negative in the US oil markets for the first time in history .
He said the impact of the coronavirus outbreak combined with the oil market collapse “remains a brutal business environment”, in a social media update posted to LinkedIn and Instagram:
“We saw it in the negative oil prices this week.That’s not just unprecedented – it is staggering.”
The admission is likely to raise questions among investors over whether BP may choose to break a cornerstone oil industry taboo and scrap its dividend policy.
Norway’s state oil giant Equinor emerged as the first oil major to cut shareholder payouts for this quarter after oil prices tumbled 80% since the outbreak of the coronavirus in January this year.
Analysts at HSBC believe a dividend cut in the current environment could be the right strategic move by making a virtue of a weakness.
“It has been interesting to see other sectors where dividend cuts have been seen in the market to some degree as being ‘the right thing to do’ in the current environment,” the bankers said in a research note.
“The oil sector is somewhat different in this regard but the sentiment backdrop is one where there is a degree of ‘moral positive’ to lower dividends”.
That would be a new one for the oil industry, but then again these circumstances are not just unprecedented – they’re staggering.
Updated at 3.19pm BST
Facebook Twitter 3.13pm BST 15:13
Yet more bad news! Sales of newly built US family homes slumped by 15% in March, as the coronavirus pandemic hit the economy.
The Commerce Department reported that sales of brand new residential properties slowed to annual pace of 627,000 in March, down from 741,000/year in February.
Earlier this week we learned that sales of ‘existing homes’ (ie, not new builds) fell by 8.5% in March, so consumers have clearly been spooked by the downturn.
Facebook Twitter 2.52pm BST 14:52
US economy shrinking fast Newsflash: America’s economy is sinking at the fastest rate in at least a decade, but not as badly as in the UK and the Eurozone.
Data firm IHS Markit says its flash US Composite Output Index has slumped to 27.4 this month, down from 40.9 in March.
That’s the worst reading since the survey began in late 2009 — and shows an extremely sharp contraction (anything under 50 is a contraction).
So, brutally bad.

But not as awful as in the UK, where the composite PMI sank to just 12.9 this month ( see this morning’s post ), or the eurozone’s 13.5 .
Markit says:
The decline in output largely stemmed from a slump in both domestic and foreign client demand.Temporary company closures, travel restrictions and other emergency public health measures across the globe weighed on total new orders.
Services companies registered the steepest rate of decline in the survey’s history, while manufacturers recorded the sharpest fall in sales since the depths of the financial crisis in early-2009.
Photograph: IHS Markit Facebook Twitter 2.35pm BST 14:35
Wall Street has shrugged off today’s jump in US unemployment.
The S&P 500 index has risen by 18 points, or 0.7%, to 2817 – despite another 4.4m Americans filing jobless claims last week .
In London, the FTSE 100 is now up 0.6% or 36 points too, to 5807.
Facebook Twitter 2.21pm BST 14:21
Jasper Jolly
Jaguar Land Rover, the UK’s biggest carmaker, plans to reopen some factories on 18 May, as the automotive industry moves to restart production with new measures to stop the spread of Covid-19.
The company’s Solihull plant, which employs 9,000 workers making the Range Rover and its Sport and Velar varieties, will be among the first to reopen, alongside its Slovakia plant making the Land Rover Discovery and the Austrian factory making the I-Pace and E-Pace SUVs.
While the coronavirus lockdowns continue in many countries, carmakers have sought to put in place protocols to keep workers 2 metres apart at all times, from spacing out rest areas, enforcing mask wearing and even restricting toilet facilities.
In a statement, JLR said:
“The health and wellbeing of our employees is our first priority.We are developing robust protocol and guidelines to support a safe return to work.

We will adopt strict social distancing measures across our business and are currently evaluating a number of different measures to ensure we protect and reassure our workforce when they begin to return to work.”
The company, which is owned by India’s Tata Motors, added that it had seen the start of a recovery in vehicle sales, with customers returning to showrooms.
Chinese manufacturing operations in Changshu have been running since mid-February after quarantine restrictions eased
Facebook Twitter 2.14pm BST 14:14
Another reminder of the astonishing jump in US joblessness claims:
Danske Bank Research (@Danske_Research) 🇺🇸We won’t know for sure until the April jobs report but based on initial jobless claims, employment has dropped to the lowest level since the late-90s (when the labour force was smaller).It took 10 years to increase employment by 22 million and only 5 weeks to destroy it! pic.twitter.com/etRYZoUiUA
April 23, 2020 Gregory Daco (@GregDaco) Initial claims for #unemployment :
3/20: 3.3mn
3/27: 6.9mn
4/3: 6.6mn
4/10: 5.2mn
4/18: 4.4mn
Cumulative 26.5mn
> All but 7 states saw fewer claims
> FL claims*3 >> backlogs
> Bleeding is less severe, but we still 4.4mn new claims in a week
> Worst of GFC was just <700k/week pic.twitter.com/kJUZfrsePp April 23, 2020 Facebook Twitter 1 of 4 Newest Newer Older Oldest Topics Economics Business live Stock markets Coronavirus outbreak Manufacturing sector.