Issue 247 | 21 September 2020 - Turner & Townsend alinea

UK news

Inflation | The Eat Out to Help Out scheme pushed consumer price inflation to its lowest rate in nearly five years. Consumer prices rose at an annual rate by just 0.2%, much slower than July’s 1% increase.
UK Internal Markets Bill | The controversial Bill passed its second reading in the House of Commons. A series of adjustments have been made but the EU maintains that the bloc’s fundamental objections have not been addressed and that it is “still illegal”.
Insurance | Mishcon de Reya is preparing a group action case against 12 insurers who are refusing to pay out on claims for business damage caused by Covid-19. Recently the High Court ruled in favour of policyholders. The decision could affect 370,000 companies with £1.2bn of claims.
Employment | ONS data shows that the largest decline in employment has been amongst the youngest workers.

Bonds | Bloomberg reported on a global “rush to cash”, with companies selling record amounts of debt this year. $2.61 trillion of bond sales this year so far, more than any other full-year result.
Paving blocks | Marshalls reported that restructuring and a 94% rebound in sales have strengthened the business following a 25% fall in turnover earlier in the year.

M&E survey | An in-depth trade survey found that M&E contractors are now far more optimistic about future work prospects as the impact of Covid-19 were not as bad as they feared. 67% of responding firms expect turnover to increase or remain the same in Q3 2020.
Red diesel | Consultations on ending the entitlement to use red diesel in construction plant from April 2022, which the Chancellor has described as “a £2.4bn tax break for pollution that’s also hindered the development of cleaner alternatives”, end on 1 October 2020.
Tideway | The last giant tunnel boring machine was lowered to dig the final 5.5km stretch of the new super sewer this week. The project is expected to finish in 2025, nine-months late due to the impact of Covid-19.
Broadband expansion | Openreach announced a £12bn expansion plan which will be a boost for construction and a boost for efficiency of the economy too

World growth | The OECD has revised its forecasts to suggest that the global economic slump will not be as severe as it first thought, upgrading the outlook for 2020 from -6% to -4.5%
Spain | The Bank of Spain has forecast an unemployment rate of around 20% until at least 2022 and its economy may shrink by between 10.5% and 12.6% this year.
Germany | Investor sentiment rose unexpectedly in September, with the ZEW economic research institute stating that there was confidence in a recovery from the current coronavirus crisis despite headwinds from stalled Brexit talks and rising covid-19 Cases. The survey rose from 71.5 to 77.4, whereas economists had expected a fall to 69.8.
Regional contraction | Asia’s developing economies are expected to contract for the first time in six decades this year. The Asian Development Bank expects a contraction of 0.7% this year followed by a recovery of 6.8% next year.
America | The Federal Reserve announced that interest rates will be held at the current near-zero rate. It expects to “moderately exceed” its target of 2% consumer price inflation “for some time”.