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What to watch: Bank of England meets, UK retail sales, US jobless data

Edmund Heaphy
Finance and news reporter
Governor of the Bank of England Andrew Bailey. (PA)

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

Bank of England expected to hold fire on further stimulus

Newly installed Bank of England governor Andrew Bailey will oversee his first scheduled policy meeting on Thursday, just a week after the central bank initiated its second emergency interest rates cut in as many weeks.

Though analysts do not expect new stimulus measures designed to tackle the coronavirus pandemic, investors will be looking for signals about further actions that the bank could take in the coming weeks.

“We do not expect more action from the Bank of England at its policy meeting this week,” said analysts at Bank of America this week, noting that the central bank has already cut interest rates, launched £200bn ($237bn) in quantitative easing, and introduced a commercial paper purchase facility.

“Central banks to us are never really out of ammunition. The question is whether they are out of ammunition that they are prepared to fire,” they said.

European stocks sink as markets await US unemployment figures

Stocks in Europe fell across the board on Thursday as investors expected US jobless data to show that an all-time record number of people filed for unemployment benefits amid the coronavirus pandemic.

The pan-European STOXX 600 index (^STOXX) declined by around 1.6%, while London’s FTSE 100 (^FTSE) fell by almost 2.3%.

Germany’s DAX (^GDAXI) was down by around 2%, while France’s CAC 40 (^FCHI) was 1.8% in the red. Stocks in Italy and Spain also declined.

Analysts expect a jobless figure in the millions, with some estimating that as many as four million Americans signed on for unemployment benefits last week, up from 281,000 in the previous week.

Consensus estimates suggest that 1.6 million people filed a claim with state unemployment agencies, reflecting the spiralling impact of the pandemic.

UK retail sales fell even before major coronavirus impact

Retail sales in the UK were tumbling even before the coronavirus crippled the UK high street, official figures show.

The amount spent by shoppers in February was down 0.5% and the volume of products bought down 0.3% on the previous month, according to the Office for National Statistics (ONS) on Thursday.

The volume of sales in February was also no higher than a year earlier, the lowest growth rate in seven years. Several retailers blamed heavy rain and highlighted some disruption to Chinese supply chains at the time.

But the ONS said when the figures were collected, retailers had been “largely unaffected” by recent coronavirus developments.

Now experts are warning the coronavirus and government lockdown in Britain and its trading partners could trigger the worst UK recession in modern history, with many retailers taking a particular hit.

Incoming William Hill finance chief decides against joining firm

Betting firm William Hill (WMH.L) said on Thursday that its incoming chief financial officer had decided not to join the company, and would instead stay on in his current role amid the coronavirus pandemic.

Adrian Marsh, the current finance director at cardboard firm DS Smith (SMDS.L), had been expected to take up the role at the company later this year in order to assist it with regulatory issues in the UK.

Marsh told Reuters on Thursday that the effects of the pandemic had prompted him to choose to stay at DS Smith.

“A few months ago it seemed like a good time to move on to a new challenge. However, these are very strange times and my loyalties are to my colleagues and stakeholders in DS Smith,” he said

Ruth Prior, who was due to leave William Hill for a role in the private equity sector, will instead continue as the firm’s finance chief.

UK government set to help 'one in three' self-employed workers

The UK chancellor is expected to hand self-employed workers a lifeline on Thursday, with many facing a collapse in income as the coronavirus has battered the economy.

The government has been under enormous pressure to support the self-employed, including from business lobby groups, opposition parties and Conservative backbenchers.

Many freelance workers from painter-decorators to musicians to lawyers face a long spell without work as COVID-19 and the government’s response have taken a heavy toll. Almost half a million people have applied for the universal credit benefit in the past 10 days, with hundreds of thousands thought to have been laid off in the hospitality sector.

Chancellor Rishi Sunak has already announced an unprecedented scheme for employees who would otherwise be laid off, but nothing similar has yet been confirmed for the self-employed.

What to expect in the US

Futures were also pointing to a lower open for US stocks on Thursday.

S&P 500 futures (ES=F) declined by around 1.7%, Dow Jones Industrial Average futures (YM=F) fell by more than 1.3%, while Nasdaq futures (NQ=F) were down by around 1.6%.

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