Kill the virus.22 Mar 2020 12:19
Right! The Bull is dead. Official! Done down not by economic disaster, housing crashes or banks seeking chapter 11 but by a bloody Black Swan event that came out of a back street market in Wuhan, China. That's all it took to implode the global economy. That's all it took to isolate most of the UK people.
There will be winners, the supermarkets, SBRY went up 17% last week but many others are on the floor seeking bailouts of one kind or another. BA, Virgin & Easy J are going cap in hand to the Govt. Pubs, Hotels, Restaurants, other leisure businesses are closing and may never return. Owners may be on the hook with their homes on the line. These places are where we meet to socialise and unwind. Now empty, locked up till God knows when? Some might live to fight another day, many will not. We are creatures of habit and when that's broken returning to the norm may not happen. Empty pubs will stay empty their future in the hands of Charity businesses. Experts say if the situation has not improved by late summer then forget it as most will have thrown in the towel.
Savings rates are zero. Great for borrowers if you can access the cash and most won't. Many savings accounts have been pulled. The industry is on its knees. If the Banks are not charging you to park your money now, they soon will be. Insurance Cos are doing their best to evade liability as you'd expect. Easy access money is currently 1.31% and variable rate ISAs are down to 0.85% for existing customers. Not for long I suspect. Dividends are a thing of the past, unsustainable and wholly inappropriate. Cash will be King for years to come.
When the virus ends will we all troop back to work in those expensive to run buildings with high rents? Travelling on over crowded, late running trains? Tech might just see a mass exodus from the expensive to the cheap, home working via Skype and other methods. That would massively impact transport volumes, road taxes, congestion charges, petrol spend delivering a hammer blow to many.
The horror story does not end there. Higher taxes will be inevitable to pay off the Chancellor's largess in bailing UK Ltd out. Eventually the Govt will have to decide when to end the lockdown and can they continue to pay people out of work. The cost is going to be in the billions.
When we exit this ghastly mess Britain will have changed out of all recognition and likely not for the better.
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