On the Spot

This week Company Watch Data Scientist, Adam Stones, joins the show to discuss UK furlough data - breaking down the % of workers furloughed by region and by industry. Also covered is February inflation, which fell to 0.4% mainly due to lower prices for clothes and second-hand cars, although a rise is expected in the coming months. And finally, there are some updates given on pre-packaged administrations.

The Bank of England upgraded its outlook for the UK economy on Thursday, however long-term recovery remains unusually uncertain. Government borrowing levels continued to set new records last month, indicating the cost of supporting the UK's economy during the pandemic. The ONS report that borrowing for the financial year to date - between April and February - has now reached and astronomical £278.8bn, a record for that period. Nick and Jo also look at the white paper 'Restoring trust in audit and corporate governance' - part of the reform includes measures that would force directors to take on much greater responsibility and liability for company accounts and require large businesses to be more transparent about finances.

UK goods exports to the EU fell 40.7% in January, according to the Office for National Statistics (ONS), while imports tumbled 28.8%. The ONS also state that the economy shrank 2.9% in January this year after it was hit with a third national lockdown. Whilst it was not surprising to see the UK's economy go back into reverse given the lockdown, the bigger question will be what impact this lockdown will have on long-term growth - especially given the real unlocking of the economy does not come until April. Also covered, Small Business Finance Markets report and insolvency rule review.

Company Watch Data Scientist, Adam Stones, makes sense of recent contradictory GDP statistics and explains how to stay grounded when interpreting dramatic changes in GDP. He also indicates how we will know when GDP has returned to pre-pandemic levels, the extent to which GDP reflects the underlying health of the economy, and what we should watch out for as fresh statistics are released in the coming months.

Rishi Sunak delivered his Budget on Wednesday, unveiling his latest plans for financial recovery. Nick and Jo cover the key takeaways from his speech, looking at the OBR forecasts and the Budget measures themselves. They also discuss pre-packaged administrations that have come under scrutiny. And finally, they take a look a supply chain finance issues, with Greensill having shown the risks thereof this week. 

Nick & Jo are joined by Company Watch Data Scientist, Adam Stones, who provides further clarity on the hard-to-understand GDP figures that have been doing the rounds of late. Another key talking point is the roadmap out of lockdown that Boris Johnson set out on Monday. The roadmap brought relief for many, with sectors such as non-essential retail and hospitality given dates to work towards for reopening. The trio also cast an eager eye to next week’s Budget, with the run-up having caused the usual wave of speculation about the contents of the Chancellor’s red briefcase...

Nick and Jo cover a range of topics, including, retail spending and corporate insolvency figures for January 2021. Retail spending was down 5.9% and insolvency figures down 50% compared to January 2020. Rishi Sunak also looks set to extend business rates relief into the summer, offering further support to companies affected by coronavirus restrictions. They also reiterate the notion that no landlord is ever an island, ripple effects will be felt up and down the supply chain if one falls into distress.

Q4 2020 GDP figures were released this morning, prompting Nick and Jo to analyse the reported 9.9% drop in more detail. This GDP fall is the UK's biggest drop in economic output in 300 years. Also discussed are some recently published non-essential retail numbers, with the British Property Federation reporting that a shocking £4.2bn remains unpaid in commercial rent from 2020. Finally, what happens to the new continuation of supply provisions under CIGA? Can suppliers change their terms during the 10-day protection period that a notice of intent to appoint an administrator provides?...

The Bank of England’s Monetary Policy Committee (MPC) set a policy to meet the 2% inflation target, in a way that helps to sustain growth and employment. Nick and Jo discuss the MPC's prediction that total GDP fall in 2020 will be 8%, but with Q1 2021 set to deliver another 4% fall, this leaves the economy still some 12% below pre-pandemic levels. Which sectors can we expect to bounce back and help reduce this deficit? Also covered are the soon to be released proposals that will overhaul UK corporate governance and audit oversight.

This week Nick and Jo talk about business resilience in light of the latest insolvency statistics. UK hospitality turnover fell £72bn in 2020, a huge blow for the sector, and 1 in 12 small businesses in the UK are unsure whether they will survive past the pandemic... The Bank of England conducted a credit survey, uncovering a rise in corporate credit demand amongst large businesses whilst demand appears to be falling in smaller firms. Also discussed are the most recent employment/ furlough figures and the continued fallout from Brexit.