Capital Economics issues optimistic prediction 

Experts at Capital Economics have predicted a quicker than expected recovery for the UK Economy as a result of the Coronavirus vaccine.

Following a decline of 11.3% in 2020, the Governments official forecaster had predicted 5.5% growth in 2021 and 6.6% in 2022

Capital Economics meanwhile predicts growth of 7.5% in 2021 and 2022. The firm also boldly suggested that chancellor Rishi Sunak will not raise taxes or reduce spending in 2021 or 2022.

40% of UK Construction SMEs have no plan for Brexit

Recent research conducted by Aldermore Bank has revealed dealing with the fallout from the Covid 19 Pandemic as the main reason behind ill preparations for Brexit by UK SME construction businesses. Concerningly, on average 28% their monthly business income is dependent on EU customers.

Should building materials or services from the EU have tariffs or levies placed upon them, this could have a significant knock-on effect on cashflow. Of those UK construction SMEs that have started to prepare for Brexit nearly one in five (19%) have diversified into new markets.

Losses from BBLS could total £26bn

The Public Accounts Committee says Government plans for recouping taxpayer losses on fraudulent C OVID-19 loans are “woefully underdeveloped”.

They added that the Government did not have the data to “assess the levels of fraud within the scheme, or its actual economic benefits” nor a counter-fraud strategy.

Losses at Lloyds and Santander have told the committee that around 1% of Bounce Back Loans have been taken out fraudulently. although analysis suggests losses from the BBLS could reach £26bn.

Furlough scheme extended until April 2021

Chancellor Rishi Sunak has extended the furlough scheme for a further month until the end of April 2021, meaning the government will continue to pay up to 80% of the wages of workers who have been furloughed.

Data released this week revealed 2.4 million workers were still furloughed at the end of October equating to circa  7.5% of the workforce.

The end of both furlough and the loan schemes coincide with the run-up to the next Budget, which the Chancellor also confirmed would take place on 3rd March 2021.

M&A Activity booms in October 

October saw the second highest monthly tally of ‘mega deals’ on record. 19 mega deals worth $5bn dollars or more were announced last month and according to data from Refinitiv, this is a tally topped only once in 2007.

The Private equity sector has seen  a particularly busy second half of the year as many firms honed in on struggling corporate businesses in a busy summer of acquisitions.

Whilst the private equity sector has focused its attentions on struggling corporate businesses, deals in the tech sector dominated in October. Deals in the sector totalled $85.7bn, a monthly value exceeded only once in the last two years.

As always, good luck with everything, stay safe and if we can help in any way we’re happy to do so.

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*Sources: City AM, Gov.uk, NACFB.