UK finance chiefs gloomier before lockdown - BoE survey
By Sean Farrell
Date: Thursday 05 Nov 2020
(Sharecast News) - UK finance chiefs were gloomier about the outlook for business and the economy even before the second Covid-19 lockdown, a Bank of England survey showed.
Chief financial officers told the BoE in October that sales were 18% lower because of coronavirus in the third quarter compared with an estimated 14% shortfall in September's survey. Estimates for sales in the fourth quarter and the first three months of 2021 were also worse than the previous month.
CFOs were also more gloomy about jobs with employment estimated as 8% lower as a result of the crisis in the third quarter and only dipping to a -7% effect in the second quarter of 2021. In September the third-quarter estimate was the same but the negative effect was forecast to ease to 6% by the second quarter.
Investment was viewed as 25% lower because of the crisis compared with a -21% reading in September. The survey also found 72% of businesses thought the outlook was uncertain or very uncertain - up from 71% in September and 36% in April.
The survey was carried out between 2 and 16 October and received 2,808 responses from small, medium and large companies. It was conducted as Covid-19 cases rose and the government came under renewed pressure to close parts of the economy.
The government ordered a second, though less severe, lockdown for England that started on Thursday. Also on Thursday the BoE announced £150bn of new bond purchases to prop up the economy and Chancellor Rishi Sunak bowed to pressure by extending his furlough programme until the end of March.
Asked about Brexit, only 4% of businesses said they were fully prepared with 41% as ready as they can be, a third partially prepared and 4% not at all prepared. The remaining 19% did not trade with the EU.
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