UK hospitality pleads for Covid support; Bank of England to set interest rates – business

Shadow health secretary Wes Streeting said the Chancellor should “get himself on a flight back and get a grip on the situation” amid reports Rishi Sunak was in California as businesses called out for support.

The Daily Mirror reported that the Chancellor was on a four-day official trip to the US where he would meet industry leaders from the tech and investment sectors.

But the shadow health secretary said Mr Sunak should come back to the UK to agree a deal to help businesses hit by lower footfall due to the rise in Covid-19.

Mr Streeting told Times Radio:

“We understand the Chancellor is currently out of the country in California. So perhaps he might want to get himself on a flight back and get a grip on the situation because businesses need certainty and confidence now.”

Rishi Sunak was accused of going “missing in action” last night after it emerged he was in California rather than at his Treasury desk planning how to help struggling businesses, the Daily Mirror reported.

Sources told the Mirror that the Chancellor was on a four-day official trip leaving his team back home scrabbling to work out a package of support.

Unions called on Mr Sunak to announce immediate measures to help workers and firms in the hardest hit hospitality, leisure and arts sectors.

The government should introduce a targeted furlough scheme to help firms hit by the current Covid-19 wave, argues the Resolution Foundation thinktank.

It points out that hospitality and leisure firms will lose customers, and employees will lose their jobs, whether new restrictions are imposed or not.

The Coronavirus Job Retention Scheme, which ended in September, can easily be brought back into use quickly to help firms who have to sideline staff, Resolution explain.

But without further action, those who work in hard-hit sectors face ‘huge income falls’ if they lose their jobs, and inadequate sick pay if forced to isolate.

Resolution say:

Whatever the imminent cause of that economic pain, the right policy answer is to provide targeted economic support. Reviving a more limited version of the furlough scheme is the easiest way to do that and protect household living standards.

Going into another Christmas with a wave of the pandemic beginning isn’t what anyone wanted, and nor is more spending on economic support than the Treasury had in mind. But those worst affected by this wave are no less deserving than those hit by previous waves. And, unlike then, we know that boosters offer us a way out of this mess in the months ahead. The past two years have taught us that economic policy can make a huge difference, it’s time it did so once again.

Resolution’s chief executive, Torsten Bell, thinks the Treasury will act within days:

Theatre director Sir Nicholas Hytner warned last night that venues were in “crisis mode”, with shows closing as actors and other staff contracted coronavirus while bookings have “fallen off a cliff”.

The former artistic director of the National Theatre told BBC Newsnight:

“We now surely don’t want to get into a situation where the Government’s investment last year is wasted because the sectors that it has supported collapse in the new year.

“We need to see short term finance, we need to see loans, we need to see VAT looked at again, we need to see business rates looked at again.”

Chef Tom Kerridge called for a return of the drop of VAT to 5% for the hospitality industry [from the current reduced rate of 12.5%], adding:

“Undoubtedly there will be many places that close their doors for Christmas and don’t reopen.”

Evening Standard: Hospitality pleads for help after Chris Whitty call for socialising to be cut

Business groups are urging the government to provide more support for the hospitality sector to help them survive the impact of the omicron variant.

Pubs and restaurants are predicting a slump in takings, as Covid-19 infections hit record highs and cancellations jump in a crucial month for hospitality.

Last night, Professor Chris Whitty, England’s chief medical officer, sent a clear message that people should cut back on socialising in the run-up to Christmas Day, warning that a rise in Covid hospitalisations is “nailed on” after cases hit a record high.

Appearing on Wednesday alongside the prime minister, who has continued to insist formal restrictions on gatherings are unnecessary, Whitty said: “Don’t mix with people you don’t have to.”

The hospitality sector had already warned that Christmas cancellations will cut their festive takings by 40%.

Baroness Ruby McGregor-Smith, CBE, President of the British Chambers of Commerce, has warned Whitt’s advise to the public to ‘de-prioritise social contacts’ will almost certainly have an enormous impact for businesses, particularly in the hospitality sector.

Despite this we still heard no news of any new financial support measures coming from Government to help those businesses, and others badly affected by the current restrictions.

“With the UK recording its highest ever number of Covid cases in a single day, and this being set to rise further in the coming days and weeks, businesses now face the two-punch combination of serious issues with staff absence and plummeting consumer confidence.

“Until now the Treasury has stepped up at every stage of this crisis to help offset restrictions that limited business’ ability to trade fully, which is what makes its complete absence at this crucial moment all the more baffling.

“Businesses have heard nothing from the Treasury since this new round of Covid interventions arrived over a week ago. Not even a rationale has been provided for why it believes no new support is required. They deserve better.

The CBI has also called for ministers to provide support in lockstep with future restrictions.

They say:

Specifically, distributing unspent grants can be done now to alleviate firms hit hardest. If restrictions persist following the January 5 review date, then further business rates relief and other help to reduce fixed costs should be on the table.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The Bank of England has a dilemma on its hands as it meets to set interest rates today. With inflation hitting a 10-year high of 5.1% yesterday, more than double its 2% target, there’s pressure to lift borrowing costs from their current record lows.

But the uncertainty over omicron, and the economic impact of the pandemic, means the BoE may well leave rates on hold at 0.1% at noon.

Silvia Dall’Angelo, senior economist at the International Business of Federated Hermes, says the outcome of today’s meeting has been a close call since the BoE resisted raising Bank Rate last month.

“The Bank could well use few more weeks to get more clarity about Omicron’s implications for the outlook and to see whether the recently adopted government’s measures are sufficient to contain its fast rise in the country. In the meantime, additional data on the impact from the expiry of the furlough scheme on the labour market will also become available.

Overall, it makes sense for the Bank of England to keep rates on hold at its upcoming meeting, avoiding rattling markets just before the liquidity-light holiday period. The February meeting – including a full reassessment of the outlook and a press conference to…