According to data from the Bank of America, the UK accounts for a third of Europe’s indebted companies which are being kept alive by record low interest rates and bailouts. Barnaby Martin, credit strategist at Bank of America said: ”Too much debt risks leaving corporates as zombies, which makes it even more challenging for economies to rebound from recessions vigorously.”
The share of UK non-financial businesses which have been labelled “zombies” has jumped six percent to 15 percent in the last year.
It is the highest level in Europe, The Telegraph reports.
According to new forecasts from fund manager Janus Henderson corporate debt worldwide is set to soar to $ 9.3trillion this year – and increase of $ 1trillion.
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UK becoming ‘zombie’ business capital in wake of COVID-19 – gloomy forecast
1.30pm update: Reopening of retail and hospitality industries saw football more than double last week
Football increased 10.6 percent across all UK retail destinations last week as pubs and restaurants reopened.
The increase is more than double the previous week’s the 4.1 percent rise.
High streets also saw footfall traffic soaring 16.5pc on the previous week, according to new data from Springboard.
However, it is still more than 50 percent below what it was for the same period last year.
Diane Wehrle at Springboard said: “The first complete week following the reopening of hospitality in England demonstrates the contribution that this sector makes to footfall in retail destinations.
“The result was also supported by the positive impact on footfall from the easing of restrictions in other nations.”
1pm update: UNISON’s general secretary announces retirement
Dave Prentis, general secretary of the UK’s biggest Union (UNISON), announced he will retire at the end of the year
Announcing the news on Twitter, Mr Prentis said: “Today I advised UNISON’s President that I will retire on December 31st.
“It has been the honour and privilege of my life to represent incredible public service workers.
“I will continue to lead this union until the end of the year – we have a lot of work to do.
12.45pm update: The FTSE-100 index up 81.70 at 6177.11
10.30pm update: Russia to push back deadline for $ 360billion national projects plan to 2030
Russian President Vladimir Putin supported a proposal to extend the deadline for a 25.7 trillion rouble ($ 363billion) package of state spending, known as the national projects, by six years until 2030 due to the coronavirus pandemic.
Prime Minister Mikhail Mishustin suggested Russia give itself more time to complete the 13 projects, strategic spending goals ranging from infrastructure to education and healthcare, in light of the economic slowdown brought about by COVID-19 and the resultant strain on state coffers.
He said: “We have to work under tighter budget constraints.
“The spread of the coronavirus and its consequences for the global economy and our country, on the one hand have spurred development in certain segments of the market, but on the other hand have created new limits, slowing economic growth and constricting consolidated budget revenues.”
President Putin’s bid for re-election in 2018 had included the key target of Russian GDP growth exceeding the global average by the time the spending reached its scheduled conclusion in 2024.
Russian GDP was forecast to grow by 3.1 to 3.2 percent in 2021-22.
Putin is pushing back the deadline for $ 360billion national projects plan for Russia to 2030
10am update: World shares approaching a five-month peak
The US earnings season kicks off this week with major Wall Street banks JPMorgan, Citigroup and Wells Fargo reporting on Tuesday.
It’s expected to be the second-biggest quarterly earnings drop since 1968, according to Refinitiv data.
Ray Attrill, head of FX strategy at NAB: “There’s a view that the bar has been set pretty low for them to report the almost obligatory ‘better than expected’ results – the absence of forward guidance from many firms notwithstanding.”
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.8 percent as Chinese stocks jumped 2.1 percent on Monday. Japan’s Nikkei gained 2.2 percent and South Korea 1.7 percent.
The optimism carried over to Europe, where stocks rose 1 percent, even as the U.S. on Friday slapped additional duties of 25 percent on French luxury goods valued at $ 1.3billion, in a tit-for-tat response to France’s digital services tax.
MSCI’s All-Country World Index was just shy of hitting February 26 highs.
E-Mini futures for the S&P 500 ticked 0.5 percent higher despite record new cases of COVID-19 in the U.S. over the weekend, a divergence that shows no sign of stopping.
Mr Attrill said said: ”Ongoing grim US COVID-19 infection news continues to be summarily ignored in favour of ongoing optimism regarding the time-line for the discovery and rapid roll-out of an effective vaccine and/or more policy support for asset prices and the US economy.”
9.45am update: The FTSE-100 index drops slightly but is overall up 52.25 at 6147.66
US markets are optimistic most companies will beat gloomy forecasts brought about by coronavirus
9.15am update: The FTSE-100 index up 70.82 at 6166.23.
9am update: European share markets rise
European shares rose with cyclical sectors leading gains as investors hoped the upcoming earnings season will feed into signs of an economic recovery from the coronavirus-induced downturn.
The pan-European STOXX index rose 0.8 percent by 8.20am BST, with banks, automakers as well as oil an gas rising between 1.2 percent and 2.0 percent.
Miners gained 2.0 percent amid surging metal prices.
8.45am update: The FTSE-100 index up 85.15 at 6180.56
Boris Johnson’s Government announced changes to furlough last month
8.30am update: US dollar edges lower
The US dollar edged lower on Monday as investors looked to incoming global economic data and corporate earnings to gauge whether the markets’ guarded optimism on the economic outlook is justified.
The dollar had ended its third week of losses on Friday as investors bought into risk-sensitive currencies on bets that the worst of the pandemic’s sweeping impact was over.
The index that measures it against major currencies had slipped 0.2 percent by early deals in London to 96.416.
8am update: The FTSE-100 index opens at 6095.41
5.24am update: Asian shares extend rally, US earnings to test optimism
Asian shares crept toward five-month peaks on Monday as investors wagered the US earnings season would see most companies beat forecasts given expectations had been lowered so far by coronavirus lockdowns.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.15 percent, having climbed sharply last week on the back of surging Chinese stocks, which added another 1 percent on Monday.
Japan’s Nikkei gained 1.7 percent and South Korea 1.2percent. E-Mini futures for the S&P 500 rose 0.5 percent even as some US states reported record new cases of COVID-19, a divergence that shows no sign of stopping.
EUROSTOXX 50 futures added 1.1percent and FTSE futures 0.8percent.