NEW EXPORT GUARANTEE SCHEME LAUNCHES

A new government-backed guarantee scheme that will give exporting SMEs access to working capital to support the everyday costs of international trade launches today, following joint work between UK Export Finance (UKED) and the banking and finance industry (Financial Times, £, p2). The General Export Facility scheme will offer extra financial help to empower firms to take advantage of new free trade agreements and to encourage post-Brexit trade. Exporters will be able to apply for larger loans from high street banks, backed by a partial state guarantee of up to 80 per cent, with UKEF's support no longer tied to individual export contracts.

Commenting on the scheme, Managing Director of Commercial Finance at UK Finance, Stephen Pegge, said:

?Supporting British exporters at this time is vital, which is why UK Finance and five of the main export lenders have been working closely with UKEF on the development of this new guarantee scheme.

?We expect business to apply from the new year as the General Export Facility enables lenders to support an even wider range of small and medium-sized firms, giving businesses the confidence to win new contracts by having an agreed revolving facility in place.?

Meanwhile, talks between the UK and EU negotiating teams are due to resume today in a final push to agree a trade deal following the United Kingdom's withdrawal from the bloc. According to some sources, there has been progress in discussions around the stumbling block of fishing rights, but Downing Street has denied this claim (BBC News, Sky News). The EU's lead negotiator Michel Barnier told envoys this morning that the most contentious issues in the Brexit negotiations have not been resolved and no deal has yet been reached (Reuters). After tense negotiations over the weekend, it has been suggested that a telephone call between prime minister Boris Johnson and EU commission president Ursula von der Leyen this afternoon will be critical, with Mr Johnson reportedly prepared to walk away from the discussions without striking a deal (Daily Mail, p1).

Separately, the British Chambers of Commerce (BCC) has warned that UK businesses still have unanswered questions about Brexit with less than a month until the end of the transition period (The Guardian, p27). The BCC added that the uncertainty is making it challenging for businesses to plan for the future, creating additional costs for firms.

TENTATIVE SIGNS OF A POSITIVE ECONOMIC OUTLOOK

Following the relaxation of England's four-week national lockdown and progress in the development of coronavirus vaccines, there have been some encouraging indications for the UK's economic recovery. The Bank of England's chief economist Andy Haldane told the Daily Mail that families are already spending the £100 billion of ?excess savings? built up over lockdown, which could help the economy recover faster than initially predicted (Daily Mail, p4). Mr Haldane identified considerable ?pent-up? demand amongst consumers following the reopening of non-essential retailers and hospitality and explained that consumer spending has returned at a ?real pace?.

This coincided with analysis by the Institute of Directors (IoD) which found that business optimism and hiring have surged following Britain's approval of the Pfizer Covid-19 vaccine (The Telegraph, £, B1). The research showed that executives are now as positive about the future as before the first national lockdown earlier this year. Additionally, house prices held strong in November as the property market shrugged off the impact of England's second national lockdown (The Telegraph, £, B3). Data from estate agency firm Knight Frank showed that there was no fall in house prices after the restrictions were introduced last month, and buyer and seller numbers recovered strongly after an initial dip.

NEWS IN BRIEF

Police Scotland has today launched a six-week campaign encouraging customers to follow the advice of the Take Five to Stop Fraud campaign to combat a rise in economic crime. Scottish government figures say fraud has increased 45 per cent since the coronavirus pandemic began. Katy Worobec, Managing Director of Economic Crime at UK Finance, said: ?We would urge people to follow the advice of the Take Five to Stop Fraud campaign to keep themselves safe from fraud. Always take a moment to stop and think before parting with your money or information, and don't let a criminal rush or panic you into making a decision that you?ll later come to regret.? (Edinburgh News, online only).

According to market research firm Springboard, shoppers flocked to high streets and shopping centres across England this weekend, but retail footfall remains far below pre-pandemic levels (BBC News).

In early trading, the FTSE 100 rose having been boosted by a falling pound as Brexit talks failed to make significant progress over the weekend (City AM).

Research by The Times has found that the UK's unemployment rate could be twice as high as official figures suggest, with almost two million people in ?hidden unemployment?. The analysis suggests that there are around two million Britons who are classed as economically inactive rather than unemployed because they are not actively seeking work, but this may be because they are unable to access jobs, are in poor health, or have caring responsibilities (The Times, £, p42).

Following regulatory approval for the Pfizer/BioNTech coronavirus vaccine, the UK is preparing a massive mobilisation effort to roll out the vaccination nationwide. The UK will be the first Western country to inoculate its citizens against Covid-19 (Bloomberg).

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