Yesterday, Sunak addressed the Houses of Parliament to outline the new support arrangement which will offer a support package for workers and businesses through this pandemic and offer financial support.
The current scheme ends in October and the government have been abundantly clear they will not extend the current furlough scheme. So, what next? The current scheme sees the government pay up to 80% of more than 9 million workers during this pandemic. Mr. Sunak said we cannot afford to keep paying for people in jobs that genuinely don’t exist. However, we can support those that are in jobs.
The new furlough scheme sees the government pay at least a third of their contracted hours. Should an employee work less than a third of their contracted hours the employer will have to pay the other third.
This scheme starts 1s November and it is open to small and medium sized businesses what’s reassuring is the government is trying to keep the economy on its feet and holding our country together.
Yesterday the UK also saw it highest number of COVID-19 cases at 6,634, with 40 people dying within 28 days (average age remains at 82). This comes as no great surprise considering the fact testing has gone up from the low thousands to over 170k a day.
Brexit continues to be the main driving force behind the strength of sterling, this week a spokesman for Charles Michel said the EU summit planned for yesterday and today would be cancelled. The Summit were forced to go into lock down after being in contact with a security guard.
The summit is now rescheduled for the 1st and 2nd of October and will focus on several issues, Brexit being a key topic. This is likely to create some market volatility in the currency markets over the coming weeks based on previous market reactions.
Historically anything pointing towards a deal remains positive for sterling and any news pointing towards a no deal remains negative with HSBC, Goldman Sachs and Lloyds are predicting levels of parity to 1.02 against the euro on a no deal and levels of 1.15-1.20 on a deal.
US elections are scheduled for 2nd November. The telegraph states “this will be an election that no one has seen before”. Over the coming months we will find out who has won enough votes to take leadership, Trump for the republicans or Biden for the democrats. Yesterday Trump stated he will not commit to a peaceful transfer and believes the US election could end up in the supreme court as Trump casts doubt on postal voting.
As more American’s are encouraged to mail in votes as the stay at home message is starting to kick in this looks like the preferred option. However, Mr. Biden says if Mr. Trump refuses to accept the result he may need to deploy military action to remove Trump from the white house.
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