What to Watch: 'Tepid' rise in stocks, lay-offs grow, BA decision on staff

Tom Belger
Finance and policy reporter
London skyline as stock markets rose on Thursday. (Dominic Lipinski/PA Images via Getty Images)

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

‘Tepid’ rise in European markets ahead of US jobs data

European stocks gained on Thursday as investors braced for the latest batch of weekly unemployment claims in the US and coronavirus cases neared the 1 million mark globally.

Analysts once again expect an initial jobless figure in the millions, with some estimating that as many as 5 million Americans signed on for unemployment benefits in the week ending 28 March.

The pan-European STOXX 600 index (^STOXX) was up by around 0.4%. London’s FTSE 100 (^FTSE) rose by around 0.2%. Germany’s DAX (^GDAXI) climbed by 0.6%, while France’s CAC 40 (^FCHI) was similarly in the green.

“Europe managed a tepid rebound on Thursday,” said Conor Campbell, a financial analyst at Spreadex.

Read more: Banks told to ‘repay the favour’ from 2008 bailout with COVID-19 support

Equities were boosted by a rebound in oil, after China said it would start buying oil for its state reserves and Saudi Arabia indicated it would support co-operation to stabilise prices.  Crude oil (CL=F) was trading 9% higher at $22.16 per barrel. Brent (BZ=F) was up 10% to $27.28.

The gains in Europe followed a mixed trading session in Asia. China’s SSE Composite Index (^SSEC) rose by almost 1.7% on Thursday, and the Hang Seng (^HSI) was up by 0.4% in Hong Kong at market close.

But Japan’s Nikkei (^N225) fell by around 1.4% and Australia’s ASX 200 (^AXJO) declined by almost 2%. The KOSPI Composite Index (^KOSPI) in South Korea closed over 2.3% in the green.

Pressure for freeze on credit card and loan payments

Lenders could be urged to offer a temporary freeze on loan and credit card payments, targeted at struggling borrowers affected by the coronavirus and its economic fallout.

The Financial Conduct Authority (FCA) announced on its website on Thursday it is likely to issue new guidance to banks and other lenders to give customers a three-month payment freeze.

A package of measures set out by the regulator include ensuring all overdraft customers are “no worse off” on price compared with before recent overdraft changes came into force. It may also order companies to charge no interest on existing arranged overdrafts of up to £500 ($620) for up to three months for customers affected financially by the pandemic.

It comes a day after shares in leading UK banks dropped sharply after they gave in to pressure from regulators to also scrap their dividends for the year.

British Airways ‘will furlough 36,00 staff’

British Airways, owned by International Consolidated Airlines Group (IAG.L), is expected to furlough around 36,000 staff in a bid to battle the impact of the coronavirus pandemic.

BA, which has already grounded a majority of its fleet of planes, has been negotiating with the union Unite over the last week, according to the BBC.

Read more: 87,000 Lufthansa staff put on part-time hours

It is expected to use the UK government’s Job Retention Scheme to pay for up to 80% of wages, capped at £2,500 ($3,071) a month.

A BA spokesperson told Yahoo Finance UK that “talks continue” with unions.

Meanwhile German flag carrier Lufthansa (LHA.DE) has also put around two-thirds of its global workforce, some 87,000 staff, on reduced hours as the coronavirus pandemic takes its toll on the aviation sector.

One in four UK firms plans lay-offs as welfare claims jump

Business groups are sounding the alarm on jobs, warning that huge swathes of the population could be laid off or furloughed in the coming weeks due to the coronavirus pandemic.

The British Chamber of Commerce (BCC) and the Chartered Institute of Personnel and Development (CIPD) both issued warnings on Thursday, saying millions of people could be fired or furloughed as COVID-19 brings the economy to a halt.

CIPD, the professional body for the HR industry, said a survey of 301 companies found almost a quarter expect to lay off at least some staff in the coming weeks.

It comes as the UK government confirmed it had received nearly a million applications for the universal credit benefit in the past fortnight, 10 times higher than normal levels.

Rising UK house price data ‘irrelevant’ as market paralysed

UK house prices rose at the fastest monthly rate in almost three years before the coronavirus paralysed the property market, new figures show.

With the coronavirus now causing unprecedented economic disruption and many estate agents fighting to stay afloat, several industry insiders said house price data was now “irrelevant.”

Data from Nationwide on Thursday showed the average mortgage offer jumped 0.8% between February and March to almost £220,000.

But most of the period covered by the figures was prior to the UK government lockdown and warning against house moves to contain COVID-19, with estate agents reporting activity has since plummeted.