8:02 am, April 9, 2020
- Here’s a look at the news headlines from the world of business and motoring on Thursday, April 9
Furlough plans could cost £40bn in just three months
The Government’s plan to cover 80 per cent of the salary of furloughed workers could cost up to £40bn in just three months as more companies decide to take up the scheme.
Between £30bn and £40bn could be paid out as at least a third of workers in the private sector are likely to be sent home, the Resolution Foundation said. The foundation analysed new data from the British Chambers of Commerce (BCC) which showed that more businesses than first thought would furlough staff.
UK economy slumped in February before pandemic impact
The UK economy contracted in February as poor weather impacted the construction sector, according to official statisticians. The Office for National Statistics (ONS) said UK GDP fell by 0.1% during the month, as it slipped from 0.1% growth in January.
The ONS said the figures, which cover the period before the spread of coronavirus accelerated across the UK, reflected continued stagnation in the economy. The services sector was flat, manufacturing grew by 0.5% and the agriculture sector reported a 0.1% decline for the month.
The ONS revealed that GDP grew by 0.1% in the three months to February, on the back of growth in December and January.
Security flaws in Ford and VW connected cars could pose risk to drivers – Which?
A pair of connected cars made by Ford and Volkswagen contain serious security flaws which could allow them to be hacked, according to Which? Research. The consumer group says it uncovered vulnerabilities in the computer system of a Ford Focus and Volkswagen Polo.
It warns the issues could put the driver’s security, privacy and safety at risk, and claims a lack of meaningful regulation for on-board technology in the motor industry has allowed manufacturers to be ‘careless with security’. Ford refused to see the full reports, while VW agreed to analyse the findings.
FTSE 100 rallies after Bernie Sanders drops US presidential bid
A late rally after the news that Bernie Sanders would pull out of the race to be US President was not enough to erase the impact of a soaring pound on the FTSE 100 yesterday (April 8).
Likely boosted by news that prime minister Boris Johnson is responding to treatment in hospital, sterling helped push down the FTSE 100, as European markets continued to suffer. The index dropped 0.5%, or 26.72 points, to 5677.73.
It rallied after the news from Mr Sanders sent the Dow Jones up by around 2%. Johnson remains in intensive care under close monitoring but treatment is helping. That news helped send sterling up, said Connor Campbell, an analyst at Spreadex.
One pound now buys 1.2395 dollars, up 0.5%, or 1.1408 euros, up 0.7%.
Used car prices remain stable, despite coronavirus outbreak
Used car prices are remaining stable despite the impact that the coronavirus outbreak has had on the market. The average retail price of a used car has maintained, with like-for-like prices down 0.2 per cent at £13,601. It follows on from industry valuation companies announcing that no adjustments will be made to trade prices.
The data, compiled by Auto Trader, shows that all fuel types saw a small like-for-like drop in prices last month, with diesel down by 1.2 per cent, alternatively fuelled vehicles down 1.4 per cent and pure electric vehicles cut by 3.8 per cent. Only petrol-powered cars saw an increase, up a modest 0.5 per cent.
Companies’ Covid-19 response will be remembered for years, says advertising boss
Companies could be judged on their responses to the coronavirus crisis for years to come, one of the world’s top advertising bosses has said. Wendy Clark, of Dentsu Aegis, said that businesses need to show customers they are responsible as communities deal with the pandemic.
Customers ‘want to know [brands] have empathy and that they are treating their associates well and that they are making steps and strides to improve communities,’ she told the PA News Agency.
Government urged to step in to stop car finance industry collapsing
The car finance industry could be on the brink of collapse as thousands of consumers risk defaulting on loans because of coronavirus. The stark warning came from one industry expert who urged the government to offer similar help given to mortgage lenders.
Stuart Masson, editor of thecarexpert.co.uk, told the PA News Agency that the car finance industry had been ‘kicking problems down the road’ because a positive economy meant stretching consumers’ finances had resulted in manageable levels of defaulting.
He said: ‘It’s going to go wrong – it’s just a question of how wrong it’s going to go, how much is it going to cost, and who is going to lose out?’
Families who rent ‘more exposed to economic shock than home-owners’
Families living in rented accommodation are more exposed to the current economic shock than home-owners despite government support. The Resolution Foundation has said home-owners are ‘relatively well protected’ compared with previous downturns.
They can request a three-month mortgage payment holiday and are already benefiting from record low interest rates which keep borrowing costs down. But newer home-owners with low amounts of equity in their property could still find themselves in big trouble should they lose their jobs. The think tank argued private renters are far more exposed to housing stress if their incomes fall.
Waiting times for EVs expected to match petrol and diesel as market recovers
The average waiting times for the most popular electric vehicles on sale is expected to match that of conventional petrol and diesel models as the market recovers from the coronavirus crisis.
Waiting times on a new electric car used to extend as far as 12 months, but with more models entering the market we’re finally starting to see those times fall to match those of petrol and diesel variants
The What Car? research found that eight manufacturers have stock of their electric models in the UK now, which will allow for even shorter waiting times. These include the Tesla Model 3 and the Renault Zoe.
Pension funds and investors face hit from dividend collapse
Pension savers could face a massive hit to the dividends that form a major part of their incomes, as companies slash shareholder payments amid the coronavirus crisis. Anywhere between 29 per cent and 53 per cent of the value of UK companies’ dividends may be slashed between now and the end of the year, according to new estimates.
Experts at Link Group said that 45 per cent of UK companies have already scrapped their payouts to shareholders – including most listed car dealer groups – with £28.2bn worth of dividends being sure to be lost by December, around a third of the total.
Source: PA Media, editing James Baggott
