Subject: Fears for Tiers ... As Local Lockdowns Loom ...

View this email online if it doesn't display correctly
                                                                                                   Saturday 10th October 2020
Hi Friend,
Fears for Tiers ...
As local Lock-downs Loom...
Just when you thought it was safe to leave the bubble and nix the rule of six, the traffic light system is coming. Fears for tiers and local lock-down abound. Pubs and restaurants may have to close in Northern Cities. More job losses seem inevitable in the hospitality sector.

The Chancellor is already handing out lifebelts, on a cruise ship heading for the ice. The Chancellor has announced a new Job Support scheme starting in November. The Treasury will pay one third of the wages of those in businesses forced to close; Closures as a result of new measures, yet to be announced. The support scheme will last six months and cost around £2.4 billion.

This is not an extension of the furlough scheme. It should have been. The cost of £2.4 billion of the new scheme, should be added to the £6 billion for the Job Retention Scheme and the £9 billion for the job retention bonus. Scrap three schemes and the Treasury could have saved £17.4 billion.

Running the initial furlough scheme though until Easter next year would have cost just £20 billion. Money well spent in a year in which Public Sector Borrowing will exceed £300 billion. Uncertainty now abounds in the pubs and restaurant sector. Not just the Turkeys will be on reduced rations in the run up to Christmas.

Good news from the latest GDP data released this week. The Eat Out to Help Out scheme boosted growth in the food and accommodation sector in August. Manufacturing and construction also performed better than expected. Latest data from the IHS Markit series suggests strong growth continued into September.

UK construction activity increased sharply in the month. The manufacturing recovery continued as output and new orders increased. Business activity in the service sector increased for the third successive month. B2B activity was the focus of main gains. The hotel and leisure sector reported a downturn, as the government stopped the support for family food outings.

Given the latest data, what shape will the recovery be? It's a V. It has always been a V since 1933. The recent data has not changed our outlook much. If anything we have upgraded our sector forecasts slightly. The details are listed below.

Output in the second quarter was down by 20%. We expect a recovery by halves this year. Output down by 10% in the third quarter, then down by 5% in the final quarter of the year. For the year as a whole, output will be down by around by almost 10%. A strong bounce back is in prospect for 2021 especially from Easter onward.

The big question is just how high will the job losses be by the end of the year. The latest measures from Treasury will not be enough to avoid a rise in the U rate. The Chancellor may say "He cannot save every job" but many will think he could have done a little bit better ...
The President On Steroids ...
Who could have thought it was a good idea to put the President on Steroids? Trump received an exotic cocktail of oxygen, the red blood of ten young men and a dose of experimental drugs from America's finest pharmaceuticals this week.

At the military hospital, Trump received a dose of Remdesivir, the experimental drug, not yet known to be safe or effective as a treatment for Covid.

Conley, the President's physician disclosed that Trump was also given the steroid dexamethasone after his blood oxygen level  dropped twice in recent days. Side effects of dex include, mood swings, behavioral disorders and cognitive disability apparently.

At the hospital Trump posted a video on Twitter, "I think I am doing very well" (whoever I am), in a second video Trump announced, "I am feeling better and will be back soon". The President escaped once for a drive by photo shoot around the hospital block. Duped into thinking he was returning to the White House, the Presidential Guard had him back in a Walter Reed White Coat within the hour.

"Do not drive, operate heavy machinery or run the largest economy in the world" should be the Surgeon General's warning. Trump on steroids could not be restrained. Someone smuggled in a Smart Phone. Trump ordered a Big Mac and Marine One. A dramatic flight back to the West Wing followed. An even more dramatic scene on the balcony followed.

Flanked by American flags with the Washington Monument in the distance, Trump saluted the brave people of America. So good, they filmed it twice, then set it to music. Trump ripped of his mask, wheezing slightly.

It was a scene set from "Argentina", Madonna as Eva Peron. "I had to let it happen" sang Maddonna, "I had to do it" said Trump. "As your leader, I had to do that" "I knew there was a danger but I had to do it. I stood out front. I led. I knew there was a risk, there was a danger but that's OK."

"I learned so much about Coronavirus," said Trump, [not like Joe Biden he wore a big huge mask all the time]. "I think this was a blessing from God, that I caught the virus". A blessing for us all there will be no second debate. "Don't cry for me Amereeka," sang the President under his breath "the truth is I'll always love me!"

That's all for this week! Have a great, safe, week-end ... Hands, Face and Space ...

John
The Saturday Economist Live is now available as a podcast. You can listen to the updates on your favourite podcast App including Apple, Google, Amazon, Spotify, Overcast, Pocketcast, Breaker and RadioPublic ...
Check Out the Home Page , Sign Up for updates ... and special editions every week ... Don't Miss Out ...
One of the many ways we always keep you in the picture J
The Saturday Economist GDP(O) estimates by sector 2020 ...
© 2020 John Ashcroft, Economics, Strategy and Financial Markets, experience worth sharing.
______________________________________________________________________________________________________________
The material is based upon information which we consider to be reliable but we do not represent that it is accurate or complete and it should not be relied upon as such. We accept no liability for errors, or omissions of opinion or fact. In particular, no reliance should be placed on the comments on trends in financial markets. The receipt of this email should not be construed as the giving of advice relating to finance or investment.

______________________________________________________________________________________________________________
If you do not wish to receive any further Saturday Economist updates, you can unsubscribe or update your details, using the buttons below or drop me an email at jkaonline@me.com. If you enjoy the content, why not forward to a friend, they can sign up here ...
_______________________________________________________________________________________
We have updated our privacy policy to address Europe's General Data Protection Regulation (GDPR). The policy changes include explaining in more detail how we use your information, including your choices, rights, and controls. We have published a GDPR compliance page about the regulation and the steps we have taken as part of our compliance process. Your privacy is important to us.
For details of our Privacy Policy   and our Terms and Conditions check out our main web site. John Ashcroft and Company.com
_______________________________________________________________________________________________________________
Copyright © 2020 The Saturday Economist, All rights reserved. You are receiving this email as a member of the Saturday Economist Mailing List or the Dimensions of Strategy List. You may have joined the list from Linkedin, Facebook, Google+ or one of the related web sites. You may have attended one of our economics presentations. Our mailing address is: The Saturday Economist, Tower 12, Spinningfields, Manchester, M3 3BZ, United Kingdom.
LikeTwitterPinterestGooglePlusLinkedInForward
Tower 12, Bridge Street, M3 3BZ, Manchester, United Kingdom
You may unsubscribe or change your contact details at any time.