Summing up the market from our various conversations with Banks, Finance Houses and Accountants
Latest Coronavirus Government Lending Figures
|Scheme||Value of facilities approved||# of facilities approved||Total number of applications|
|Bounce Back Loan Scheme (BBLS)||£35.47bn||1,174,854||1,430,017|
|Coronavirus Business Interruption Loan Scheme (CBILS)||£13.68bn||60,409||122,885|
|Coronavirus Large Business Interruption Loan Scheme (CLBILS)||£3.50bn||516||938|
*As per the latest official figures reported to the Treasury at close of play on 16th August
As the UK slumped into it’s deepest recession on record, the ONS (Office for National Statistics) confirmed this week that UK GDP plummeted by 21% between April and June, this following a 2.2% drop in Q1 of this year. We’re closely watching June’s figures as many analysts predict a circa 8% rebound in activity. Chief economist at Investec Bank, Philip Shaw, predicted a ‘material rebound in the 3rd quarter’ once July’s figures are in but added ‘the test will come in the autumn when there are no further lockdown releases to boost the economy, some restrictions (perhaps just local) are imposed and programmes such as the furlough scheme are wound up’. It certainly looks like at present that this downturn will last well into 2021 with the UK facing mass redundancies and sadly, the insolvency of many SME’s up and down the country. October will surely give a clearer picture of the full effect of this recession once the furlough scheme ends, although one possible tactic to combat the spread of the virus and help protect the economy that has intrigued us is the prospect of ‘local lockdowns’. To date, the national lockdown measures imposed in March were crippling to many sectors and ground the economy to a halt. The prospect of identifying areas with a high R rate and subsequently temporarily ‘locking down’ those specific areas could allow the rest of the UK economy to operate and prop up the areas unable to contribute. There are obvious details that would need to be ironed out and still much to be planned and determined logistically, but it’s a proposal we’ll be watching very closely in the coming weeks.
We also saw this month a second support grant for the self employed introduced by the government. Over 3 million people may be eligible for the grant of up to £6,570 each, although Chancellor Rishi Sunak did state this would be the final handout. Since opening on Monday, the HMRC said it was pleased to report a positive start to the scheme with 39,000 people successfully making claims. Initially, the claims window will open for a 4 day period however anyone who believes they may be eligible and hasn’t been contacted by the HMRC still has until October to make a claim. It’s a step in the right direction for the nations self-employed but much is still to be done.
Rounding off August’s edition of Word on the Street, this month saw us receive a record number of enquiries for our ‘financial strategic review’ offering. Having devised a number of sector specific ‘road map to recoveries’, it’s likely we’d have covered your sector or line of business in the process. If you would like to receive practical, impartial advice on how to plan your financial strategy and navigate your way through these challenging times, we’d be happy to help. Just contact us either by email or phone and we can schedule a chat.
Good luck and stay safe, and do let us know if you would like help with any of the above.
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