EUROZONE GDP SEES BIGGEST CONTRACTION SINCE 1995

The eurozone GDP dropped 3.8 per cent in the first three months of 2020, the biggest fall since records for the area began in 1995 (The Telegraph, £, p1 and B1). President of the European Central Bank (ECB) Christine Lagarde warned that the eurozone economy could collapse by as much as 12 per cent this year, saying Covid-19 has ?halted economic activity to a large extent across the globe?.

Meanwhile, the ECB announced measures yesterday that will incentivise lending to households and businesses, as it will effectively pay banks to lend (The Times, £, p39).

It comes as the prime minister Boris Johnson confirmed yesterday that the UK is now past the peak of the coronavirus outbreak, and announced that the government will publish a comprehensive plan next week for gradual lifting of lockdown restrictions (The Guardian, p1).

UK SEEKS SOFTENED TRADE STANCE WITH EU

According to senior British officials, Boris Johnson is advising the EU to revise its negotiating mandate on three key areas before a high-level meeting between ministers in June, in order for there to be a UK-EU trade deal this year (FT, £, p3). Mr Johnson wants the EU to abandon its demands for a common fisheries policy, enabling the UK to be able to exercise full control over its coastal waters, and to not see EU restrictions on environmental legislation, state aid and labour laws.

Meanwhile, according to EU officials, an EU source has warned that the Brexit talks are not making any progress, as they have come to a 'standstill round?, reports The Guardian (p19).

NEWS IN BRIEF

The Lending Standards Board (LSB) published its summary report on the Contingent Reimbursement Model (CRM) Code for Authorised Push Payment (APP) scams yesterday, advising banks to review old fraud cases (The Telegraph, p14, print only). Please find UK Finance's full statement here.

The Financial Conduct Authority (FCA) has today announced that it intends to ask the courts to clarify uncertainty on business interruption (BI) insurance in order to help businesses impacted by the coronavirus. The regulator has also proposed a series of measures to support both consumers and businesses who hold insurance products and who are facing other issues as a result of the coronavirus (Reuters).

According to data published by the Office for National Statistics (ONS), sales have more than halved for one in four British businesses since the lockdown was in place (The Times, £, p43). Meanwhile, according to the CBI's monthly growth indicator, private sector activity fell at its sharpest pace in 11 years in the first quarter of this year (The Times, £, p39).

The business secretary Alok Sharma will publish ?workplace by workplace? guidance this weekend on how companies can safely go back to work once the lockdown is eased (FT, £, p3).

Industry leaders are calling on the government to make the furlough scheme more flexible for workers so that they can return to work part-time without a sudden stop in wage subsidies (The Telegraph, £, B2).

Make UK, the industry body representing manufacturers, has called on the government to look beyond the provision of subsidised loans for manufacturers in order to help the industry after reporting that three-quarters of manufacturers have seen a decline in sales during the coronavirus pandemic (The Guardian, p29).

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