Industry leaders react to Boris Johnson roadmap

• UK Prime Minister Boris Johnson unveils his lockdown exit roadmap
• Industry leaders react to roadmap rules on the reopening of businesses
• UK firms urge the Prime Minister to provide additional target support
• Chancellor Rishi Sunak set to extend furlough scheme
• Pound Sterling (GBP) rallies to fresh highs against the US dollar (USD), euro (EUR) and other major currencies

UK Prime Minister Boris Johnson unveiled his roadmap out of lockdown on Monday, with June 21st set as the date for when the UK government can lift all coronavirus restrictions.

Ministers will be easing lockdown restrictions over four months in five-weekly intervals, with the reopening of schools taking priority, followed by non-essential retail stores, gyms, shops, zoos and hospitality venues with outdoor seating capabilities in April.

Under stage three of the exit plan – which commences on May 17th – Mr Johnson will reintroduce the rule of six. All indoor hospitality venues, cinemas, hotels, travel and tourism businesses can also resume operations.

While the four-step roadmap shows a return to normality in June, UK Health Secretary Matt Hancock said the more cautious approach would put the UK economy on course for a swift rebound while avoiding a fourth COVID wave.

The UK will follow a “data not dates” approach to easing lockdown restrictions to prevent a repeat of November’s blunder when restrictions were lifted too quickly. Mr Johnson said that the following conditions must be met at each stage of the plan before the government can introduce the subsequent measure:

• The UK’s vaccination programme continues to be an ongoing success
• Vaccines are effectively reducing the number of COVID-19 cases and fatalities
• The NHS has not come under sustained pressure due to the infection rate
• The UK government’s assessment of the risks associated with reopening the economy has not been challenged by new mutations of the virus

Industry leaders were quick to respond to the UK government’s four-step roadmap out of lockdown, and many welcomed the Prime Minister’s strategy for reopening the economy and getting back to normality.

Industry leaders react to Boris Johnson’s roadmap rules

While Britain’s rapid vaccine rollout program has offered hope, UK businesses have been forced to navigate a challenging 12 months. However, the Prime Minister’s lockdown announcement will have allowed many industry leaders to let out a deep sigh of relief.

Airlines UK Chief Executive, Tim Alderslade, said: “We’re grateful to the Prime Minister and Department for Transport for providing the clarity the sector was looking for that international travel can reopen this summer, as soon as it is safe to do so.”

Mr Alderslade cheered news that the UK government were keen to restore international travel and said that the series of reviews Mr Johnson said would take place to examine the resumption of travel will provide much-needed reassurance to the travel and aviation industry.

Tim Alderslade added that there is a substantial amount of pent-up demand for travel, and he hopes that now that there is a date to work towards, UK airlines and airports will prosper during the summer months.

Needless to say, the industry will need to work with ministers to devise practical details on how best to remove current travel restrictions and ensure a safe return to the skies.

However, the Association of British Travel Agents (ABTA) Chief Executive Mark Tanzer appreciated Boris Johnson’s determination “to restore travel before summer”.

Other industry leaders have also welcomed the Prime Minister’s lockdown exit roadmap. Roger Marsh OBE DL, chair of the NP11 and Leeds City Region Local Enterprise Partnership, said: “I can finally see the light at the end of the tunnel drawing near.”

He noted that some businesses in the north have been closed since the onset of the pandemic and that the positive steps, while cautious, will help spur recover and allow firms to work towards a brighter future.

However, he warned that the UK government will need to provide additional support for the hardest-hit sectors such as retail and hospitality, with the cost of lost sales to non-essential stores now amounting to GBP 22BN and counting.

Airport Operators Association (AOA) Chief Executive, Karen Dee, added that some firms wouldn’t survive until April 12th.

Karen Dee and several other business leaders across various industries are urging the UK government to set out sector-specific support measures to provide “businesses with a fighting chance to restart.”

Industry leaders call for targeted financial support

While many UK companies welcomed the lockdown exit strategy for England, there were more unanswered questions than answered following the announcement, particularly over ongoing support.

Dr Adam Marshall, director-general of the British Chambers of Commerce, criticised Mr Johnson for failing to lay out the much-needed support measures that “our businesses and our communities” need to survive and urged the Chancellor to “put this right at the Budget.”

While the Treasury has already pumped out GBP 300BN in financial aid, industry leaders have said t further financial support is needed to make it through the weeks ahead.

It comes as official government statistics reveal that the number of employees on payroll fell by 828,000 between February and December in 2020, with young people in the UK experiencing disproportionate levels of rising unemployment.

All principal business representatives have pleaded for support measures such as the furlough scheme and business rates relief to be extended.

UK Board of Airline Representatives (BAR-UK) Chief Executive, Dale Keller, urged the UK and its devolved nations to provide targeted support for the aviation industry, which struggles to support nearly 1 million jobs amid ongoing COVID restrictions.

Labour leader Sir Keir Starmer also condemned Boris Johnson for failing to announce “proper economic support” during the televised address to the nation. On Monday, Sir Keir said: “Nothing was stopping the Prime Minister from saying that he would extend business rates relief, the furlough scheme and the VAT cut for hospitality and leisure.”

Meanwhile, Frances O’Grady, Trades Union Congress (TUC) general secretary accused the Prime Minister of “dithering and delaying”. Mr O’Grady told Boris Johnson to extend the furlough scheme for the remainder of 2021 and deliver urgent support to self-employed workers.

However, Prime Minister Boris Johnson did hint that the furlough scheme would be extended after stating that the UK government will do whatever it takes to protect jobs amid the pandemic.

Chancellor Rishi Sunak set to extend furlough scheme

Chancellor Rishi Sunak could announce that the furlough scheme is being extended until July in his upcoming Spring Budget statement.

According to a senior government source, the furlough scheme and other financial bailouts will continue through the spring and into the summer to support businesses out the other side of the pandemic.

Although the UK’s jobless rate has hit its worst level since 2016, the furlough scheme has been a lifeline for businesses and livelihoods and prevented a tsunami of unemployment.

Recent data also shows that there has been a rise in payrolls, which is believed to be a result of companies bringing staff back from furlough as they are better able to adapt to lockdown restrictions.

However, more than 1 million self-employed workers are without work or financial aid due to the government’s eligibility criteria.

While the UK government’s Self-Employment Income Support Scheme (SEISS) is said to be one of the most generous schemes of its kind in the world, there have been several calls for emergency relief for self-employed workers.

Last year officials confirmed that there would be an additional SEISS grant to cover the February to April period. However, Chancellor Rishi Sunak has refused to provide further information on support for self-employed workers until the March Budget announcement.

Financial journalist Martin Lewis slammed the UK government’s decision to withhold information on SEISS as “unnecessarily cruel”, stating people need certainty and reassurance that help is in place.

Despite concerns raised over the lack of clarity on economic support, the government’s lockdown exit roadmap appears to have restored confidence in the UK’s economic recovery outlook.

While the cautious approach may delay the UK’s economic rebound, the exit strategy has fuelled hopes that the current lockdown will be the last, and that is also driving pound Sterling (GBP) exchange rates higher.

Paul Dales, Chief UK Economist at Capital Economics, said that the cautious plan should ensure a sustained recovery, especially with “the Chancellor and the Bank of England unlikely to knock the economy off course with tighter policy.”

Pound Sterling touches multi-year best against a host of currencies

Foreign exchange (FX) markets welcomed Prime Minister Boris Johnson’s exit strategy, as investors seemed to feel that the UK leader offered a credible roadmap for easing lockdown restrictions.

Pound Sterling (GBP) advanced across the board in the wake of the announcement, with the British pound to US dollar (GBP/USD) exchange rate rallying shy of the USD 1.41 level to USD 1.4097!

The British pound to euro (GBP/EUR) exchange rate also hit a fresh multi-month best and appears to be testing EUR 1.16. At the time of writing, GBP/EUR is trading 0.2% higher at EUR 1.1592.

Meanwhile, the British pound to Australian dollar (GBP/AUD) exchange rate, which started the week on the back foot, has rallied to AUD 1.7818 and could extend gains if the UK’s recovery outlook and rapid vaccine rollout continue to put a floor under pound Sterling (GBP).

Although upcoming economic indicators could trigger some volatility in pound Sterling (GBP) exchange rates, further evidence of declining COVID-19 cases and hospitalisations in the UK could prevent any substantial declines in GBP crosses.