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What to watch: BOE expands its QE program, Sainsbury’s could cut 3,500 jobs, Lufthansa bleeds cash

·3-min read
As Londoners await the second coronavirus national lockdown the City of London braces itself for the economic hardship to come a few days before a month-long total lockdown in the UK on 2nd November 2020 in London, United Kingdom. The three tier system in the UK has not worked sufficiently, to suppress the virus, and there have have been calls by politicians for a 'circuit breaker' complete lockdown to be announced to help the growing spread of the Covid-19. (photo by Mike Kemp/In Pictures via Getty Images)
The UK heads into a month-long lockdown on Thursday. (Credit: Mike Kemp/Getty Images)

Here are some of the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.

BOE expands its QE program

The Bank of England will pump another £150bn ($194bn) into the UK’s ailing economy by buying government bonds.

The central bank on Thursday said its Monetary Policy Committee (MPC) had voted to maintain the interest rate at the record low level of 0.1% but expand quantitative easing (QE) — its programme of government bond buying on the secondary market — by £150bn. The Bank of England will maintain a stock of corporate bonds worth £20bn.

All three decisions were voted through unanimous by the 9-person MPC.

The QE expansion takes the size of the Bank’s asset purchase facility to £895bn, covering both government and corporate debt.

WATCH: BOE boosts bond-buying programme

Sainsbury’s could cut 3,500 jobs

One of Britain’s largest supermarkets, Sainsbury’s (SBRY.L) has warned that around 3,500 people may lose their jobs as the grocer shifts its business and staffing plans to accommodate the way COVID-19 has shaped shopping.

The group said in a statement that most of those roles at risk will be from the Argos chain it bought in 2016 as it looks to close 420 Argos standalone stores by March 2024, and then open 150 more outlets in Sainsbury's stores.

Sainsbury’s is Britain’s second largest grocer with 16.2% of the market share, according to data from analytics agency Kantar Worldpanel, and has a total workforce of 172,000.

“We are talking to colleagues today where the changes we are announcing impact their roles,” said Sainsbury’s in a statement.

“We recruit 55,000 Retail colleagues every year and have already hired 52,000 people since March, including 29,000 additional colleagues to support our efforts to feed the nation,” said Sainsbury’s in a statement.

Lufthansa bleeds cash

German air carrier Lufthansa AG (LHA.DE) saw its shares fall on Thursday as it announced it was facing a major cash loss in its Q3 report.

Shares fell by at least 1.2% in early trading on Thursday.

It reported a loss of €1.3bn (£1.19bn) in adjusted earnings before interest and taxes (EBIT) in the third quarter, compared to a profit of €1.3bn in the same period a year ago, highlighting that the global coronavirus pandemic continued to have a “considerable impact” on its earnings. This was largely due to customer reimbursements of ticket costs for coronavirus-related flight cancellations, which amounted to €2bn.

“Strict cost savings and the expansion of our flight program enabled us to significantly reduce the operating cash drain in the third quarter, compared to the previous quarter,” Carsten Spohr, CEO of Deutsche Lufthansa AG said in a statement of Thursday.

US election: European stocks hit two week high amid Biden edging closer to win and Trump filing lawsuits

Markets are welcoming news of a potential Democratic win in the US presidential election on Thursday with stocks in Europe and Asia trading higher and US futures also pointing upward.

While Joe Biden could be on the brink of victory, incumbent challenger Donald Trump has not taken the news lightly, choosing to launch a series of lawsuits in swing states.

US futures have been steadily gaining. The S&P 500 (ES=F) is tilting higher by 1.11%, the Dow Jones (YM=F) modestly headed higher by 0.8%, and the Nasdaq (NQ=F) leapt by 2%.

The gains in early trading in Europe were modest. The FTSE (^FTSE) in London was 0.5% higher, Germany’s Dax (^GDAXI) was up 0.8%, while France’s CAC 40 (^FCHI) rose 1%.

Asian markets remained firm on Thursday.

The Hang Seng Index in Hong Kong (^HSI) was up 3%%, China’s SSE Composite Index (000001.SS) gained 1.3% and Japan’s Nikkei 225 (^N225) leapt 1.7%.

With additional reporting from Oscar Williams-Grut and Lianna Brinded

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