UK ECONOMY EXPECTED TO RECOVER IN 2023

Chancellor Rishi Sunak is preparing to offer a 100 per cent guarantee on loans to Britain's smallest businesses, following pressure from Conservative MPs and the Bank of England (BoE) (Financial Times, p1, £).

The UK economy is expected to take three years to recover from the fallout of the coronavirus pandemic, according to a report published by EY (The Times, £, p2). The forecast predicts that economic growth could fall by 6.8 per cent this year before returning to positive growth of 4.5 per cent in 2021 when business activity and consumer spending picks up (The Guardian, p31).

Meanwhile, the Prudential Regulation Authority (PRA) has advised UK lenders against booking huge charges on loans, offering guidance under new accounting rules known as IFRS 9 (FT, £, p1).

It comes as the prime minister Boris Johnson returns to Downing Street following his recovery from coronavirus. He will resume his full-time duties, including chairing the regular morning cabinet meeting on the UK's response to the coronavirus outbreak (BBC News).

GOVERNMENT URGED TO SET OUT ITS LOCKDOWN EXIT STRATEGY

The Institute of Directors (IoD) has called on the government to set out its lockdown exit strategy in order to restore confidence amongst British businesses (The Guardian, p31). The IoD's director general Jon Geldart said business leaders need to know what they should prepare for, with a poll from its members showing that they were more fearful about their company's future than at any point since the Brexit vote.

According to estate agent Knight Frank, the number of houses built by private developers in the UK is set to fall by as much as 35 per cent this year, about 56,000 fewer homes, due to the lockdown (The Telegraph, £, B3).

Meanwhile, a former Bank of England rate setter, Ian McCafferty, has said that if the lockdown was lifted gradually it could take the economy at least six months to get back on track, with households and businesses facing tax rises and austerity once the pandemic is over (i, p39, print only).

NEWS IN BRIEF

EU diplomats have warned that the UK's request to remain part of a cross-border legal cooperation treaty, known as the Lugano Convention, is at risk (FT, £, p3).

A House of Lords committee is calling on the government to reform IR35 rules, otherwise known as 'off-payroll' working, as a current inquiry found that there are numerous flaws in the measures (The Times, £, p36).

The chancellor may issue emergency cash payments to the self-employed sooner than originally planned, reports The Telegraph (£, B4).

Boris Johnson is expected to speak with the European Commission's president, Ursula von der Leyen, and EU leaders to ask them to dedicate attention to Brexit negotiations (The Guardian, p2).

The auditor Deloitte has identified an increased risk of fraud in property valuations, reports The Times (£, p33).

COVID-19 - THE LATEST

LATEST BLOGS

Grant Kennedy. MD of KRisk, writes about the importance of building a positive, proactive risk culture ahead of our forthcoming Risk and Resilience Academy.