“Hundreds of thousands of people have already lost their jobs, and unfortunately there will be many more in the coming months. But while there are difficult choices that need to be made, we will get this,” he said.
Lockdowns necessitated by the coronavirus pandemic were the main cause of the widespread economic destruction. But there is ample evidence that policy decisions made by voters and their elected leaders – both in the recent past and years ago – made the crisis worse than it could have been.
Play back to June 23, 2016. That is the day the British people voted by a narrow margin to leave the European Union, their largest export market, and start a new future outside the bloc.
The result was years of uncertainty that discouraged companies from investing in Britain and spurred the economy of much of its dynamism. Average annual gains in real GDP fell from 2.4% in the three years prior to the vote to 1.6%, according to Berenberg.
“Future historians will mark June 23, 2016 as the day when the UK, like a train changing tracks, suddenly switched to a different path,” said Kallum Pickering, a senior economist at Berenberg, in a research note.
The malaise was well-established when the coronavirus pandemic hit earlier this year, making the economy more vulnerable and flaming a government led by Prime Minister Boris Johnson who was widely criticized for its response.
Johnson promised a ‘world beat’ rail and rail system, but it has not materialized. Nursing homes have been destroyed by the disease, the government has been slow to add test capacity and the prime minister’s chief adviser has confused government reports on social distance by driving hundreds of miles to a second home during lockdown.
One result: The UK economy has lost 730,000 jobs since the coronavirus pandemic in March hit businesses, with the young, the old and the self-employed facing the run-up to the unemployment crisis.
The outlook for the UK economy remains low.
Even after years of back and forth over Brexit, the country has not yet negotiated a Brexit trade agreement with the European Union. The deadline for such a deal is the end of the year.
Talks are not going well – increasing the possibility of another major shock just as the expected economic recovery is gaining momentum.
“Whether the post-Brexit path will run largely parallel to the old one, with the UK in a roughly similar direction … or take a new direction entirely, remains an open question,” Pickering said.
Tesla splits 1 part into 5
Shares in Tesla jumped by roughly 5% in premium trading after the automaker announced a five-for-one stock split.
In practice, the move means that an investor who owns one Tesla share will own five after the split, which is scheduled for August 31st. The price of a single share will therefore be divided by five.
Tesla shares have risen more than 200% since January to more than $ 1,370, and their market capitalization has outperformed the combined value of rival manufacturers Toyota and Ford.
The advantage: By increasing the number of available shares, Tesla may be able to attract investors who were put off by the high price of a single share.
Good company: Apple, another tech company with an astronomical share price, announced last week that it would implement a four-for-one stock split.
Bitcoin grabs as gold stands
Bitcoin is on a tear.
The price of one bitcoin is now trading just above $ 11,500, the highest level in about a year. The value of the digital currency is now more than 180% up from its lowest mid-March of around $ 4000, reports my colleague Paul R. La Monica.
What drives the spike? Experts say much of this is due to the weakness in the U.S. dollar. The dollar has fallen in recent months on expectations that the Federal Reserve will keep interest rates close to zero for years as a result of the financial constraint of the Covid-19 pandemic.
“It’s a flight to security,” said James Putra, head of product strategy for TradeStation Crypto.
Of course, safety is a relative term these days. Investors may think that bitcoin is a good hedge against a falling dollar. But the virtual currency remains extremely volatile.
Gold, another asset typically considered a safe haven by investors, has been on a wild ride since recently hitting a record high above $ 2,000 an ounce.
But prices have tumbled in recent days, briefly falling back to below $ 1,900 on Wednesday. Part of the decline was attributed on Tuesday to a rise in U.S. Treasury yields, while other analysts point to optimism running a vaccine for coronavirus. However, investors should expect more volatility.
Next
U.S. inflation data will be published at 8:30 p.m. ET.
Also today:
- A report on raw inventories from the US Energy Information Administration will be published at 10:30 a.m. ET.
- Cisco will release its quarterly results after the closing clock.
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