Differing expectations surround end of Covid restrictions
The FTSE 100 Index is expected to remain stagnant following differing expectations as to how the end of the UK’s Covid restrictions on July 19 will impact UK companies. While many expect the economy to improve significantly, some business leaders are warning this may trigger a surge in virus cases and disrupt workplaces. Employers are concerned that if cases rise to 100,000 new cases per day, running businesses would become impossible because so many people would be forced to self-isolate.
UK businesses worried about restrictions lifting
Groups, such as UK Hospitality, have urged the government to end self-isolation rules early to allow employees to keep turning up for work. However, the current rules are set to be lifted on 16 August, nearly a month after lockdown restrictions end. Economic recovery lost momentum in June, with a rise in infections caused by easing restrictions. According to Google mobility data, visits to retail and recreation centres dropped in June after surging once restrictions lifted. Retail consultant Springboard also said footfall in retail centres declined through June to 25% below June 2019’s levels.
US investors still putting more money into bond funds than shares
In the US, investors are still putting more money into bond funds than shares despite fears of rising inflation, according to the Investment Company Institute. Hedge fund giant Marshall Wace is planning to invest in blockchain technology, payment systems for digital currencies and stablecoins, via a new portfolio to buy stakes in late-stage digital finance companies. The UK’s Morrisons is facing a bid battle, with a property adviser saying that the group’s portfolio of stores is drastically undervalued, risking it being sold on the cheap to private equity bidders. Meanwhile, attention has turned to Sainsbury as a possible bid target, despite its new CEO Simon Roberts refusing to comment on whether this will be the case.
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