Stresses starting to show: weekly roundup 21 August 2020

Posted on August 21, 2020 by Chris Warburton

This was a week when it felt the economic stresses of lockdown really seemed to starting to show and were reported more widely.

All of this still seems to be building towards some sort of crunch point at the end of the summer, early autumn.

After the summer is after all when the UK furlough (which still covers 12% of the workforce) and payment deferral schemes are due to expire. Evictions are also due to restart in England too.

All of this piling more pressure on the consumer at the same time… potentially a building storm front.

It is not necessarily all bad news for everyone though, there were some brighter spots showing a bounce back somewhat quicker than expected.

  • The 2nd hand car market, prices see to have returned to more normal levels, as the economy gets moving and people turn to driving rather than public transport… good news for motor finance (and maybe even oil prices) longer term.
  • Retail sales seem to be returning, with what seems to be a sustained movement to online too. (Although CFO’s reportedly do not seem to be that prepared should sales do not return to previous levels).
  • Digital and touchless processing also continues as a running theme, with a move to cashless payments, in part due to fears regarding COVID, although this will also help the velocity of payments, hence the economy too.

So this is starting to maybe be a story of polarisation. Those that are impacted negatively could be impacted significantly, but many may not be impacted at all…. one to watch closely and see how it develops.

Lastly, on a more personal note, I was sorry to see the closure of STA travel. For many of us, this was the travel agency we booked and travelled much of the world when we were younger and could (actually) travel… good experiences and many memories, they will be missed.

Have a good weekend everyone…. @chris_w_tweet

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Week 22: Rain and Shine

Posted on August 16, 2020 by Chris Warburton

The hot weather broke this week and somehow working inside seemed easier, looking at the rain rather the sweltering days earlier in the week… the observations this week.

  • Lots of us have been growing vegetables during lockdown, myself included… I am now, unfortunately, suffering from peak courgette (zucchini)… they are now in every meal with more growing before they can be eaten, some the size of submarines lurking beneath the foliage… I keep repeating to myself…’this will pass’ and ‘I will miss them when they are gone’!
  • I also took a visit to the hospital and was amazed how the experience has been transformed since the lockdown… no stuffy waiting rooms, little queuing, and car parking spaces… Also thinking about everything the staff must have been through there, they do an amazing job.
  • Workwise a busy week. With the economic+ news there is still ‘the calm before the storm’ feeling… Somehow the summer has allowed us to forget about everything a little and am trying to not think about the mood when it is really over. Another few weeks, to make the most of it.

It’s a rainy Sunday evening here, time for dinner…courgettes!

Have a good week everyone… @chris_w_tweet

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Weekly Roundup 14 August 2020

Posted on August 14, 2020 by Chris Warburton

Economic news took centre stage this week it seemed…

The UK has reportedly plunged into the deepest recession on record shrinking 20%. This is more than our peers in Europe and already impacting jobs, with redundancies up 5 fold from normal.

There is an expectation that this will increase further once the furlough scheme ends… the end of the summer when reality hits, is likely to be somewhat grim. Interestingly, over in the US, Jamie Dimon of JP Morgan is expecting the full effects to get delayed until the end of the year, so we may have a little more time.

UK consumers are clearly reigning in their expenditure already. They are now borrowing less and using spare cash saved through the lockdown to pay down debt. This is resulting in a contraction of lending market for now at least.

On the fin-tech front more news of financial pressure, with Revolut losses seeing a further increase (x3). As discussed before, this does seem like a sector under challenge especially given the current environment… all the normal economic rules (and stability) are being changed as they are growing… maybe they are just ahead and their time will arrive (remember the dot.com bubble, crash and then real growth of hugely successful companies like Amazon)… this is one to watch closely.

Lastly, there were also a couple of interesting stories on working from home

Have a good weekend everyone…. @chris_w_tweet

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