Articles & Updates

UK companies borrowed almost £80bn across the government’s flagship coronavirus loan schemes in the year to March, according to recently published Treasury data, costing the Treasury around £25bn in loan defaults. This figure is based upon just-published scheme utilisation levels and Covid loan default forecasts by the Office for Budget Responsibility (OBR).

The coronavirus job retention scheme (CJRS) starts to taper this week, which will prompt employers that receive funding to quantify their long-term workforce size as the UK slowly emerges from its third extended national lockdown.

Temporary legislation introduced under the Coronavirus Act 2020 placing a ban on commercial evictions has been extended until 25 March 2022. As the threat posed by the coronavirus pandemic on the commercial property sector fails to subside, the pressure on financially strained tenants is once again lightened.

Government restrictions on international travel have tightened again in the UK as a surge in new infections linked to the emergence of virus variants threatens the airline industry’s summer recovery.

The Bank of England (BoE) upgraded its outlook for GDP, seeing a surge this year driven by a successful vaccination roll-out and a fully reopened UK economy in June combined with supportive fiscal and monetary policies and unleashed household savings. Overall, the revised UK forecast implies a faster GDP expansion this year, followed by slower growth next year. As ever, underneath the rosy headline outlook, the environment will remain precarious for some.

Uncertainty obscures the global economic outlook. In the short term, global growth will correlate with the pandemic’s path: from the efficacy of existing vaccines to stem the emergence of possible new Covid-19 variants to the effectiveness of policy action and the varying resilience of different economies to lockdown restrictions. But the long-term effects of the pandemic may take years to become apparent, such as changes in long-term supply and demand across economies and in the evolution of financial markets.