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As the number of confirmed cases spiral and stock markets plunge, many are wondering what the coronavirus business impact will finally be.
Many businesses are already feeling the effects of the epidemic. Tales of panic buying in our supermarkets suggest that makers of hand sanitiser, toilet rolls, pasta, flour and face masks are doing brisk trade.
On the negative side, many restaurants, theatres, cinemas – along with other businesses that rely on people sharing the same social space – are reporting a sharp drop in custom. This will have knock-on effects on their many suppliers.
Then there’s the tourist industry. Flights, ferries and tour operators are all taking a hit as people decide to stay at home. This will only be bad for the economies of popular destinations. Today, Italy’s stock market dropped by 10% after the government announced plans to quarantine millions of people.
In short, it’s a precarious time for many businesses. If the epidemic becomes a pandemic and lasts many months, a lot of firms are going to struggle to keep going.
There are knock-on effects on personal finances, too. Because the stock markets are plummeting, this has wiped out about 10% off many pension schemes. These losses could easily increase, at least in the short term.
Mitigating the coronavirus business impact
Given that COVID-19 didn’t exist until just a few weeks ago, initiatives to mitigate the business impact are still evolving. At the time of writing, these are just some of the things that are happening:
- The US Federal Reserve has pumped an extra $50bn into the markets, in an attempt to stop the financial system running out of liquidity
- Natwest has pledged £5bn of funding for SMEs – this will be part of its current growth funding package which supports businesses
- Governments across the world, from New Zealand to the UK, are finalising details of support packages.
The big question for UK businesses is what help the government here is likely to offer.
That said, Chancellor Rishi Sunak will be delivering his first Budget on Wednesday. It is already being dubbed the ‘Coronavirus Budget’. The big question is whether the Chancellor will deliver support for struggling businesses or introduce tax hikes on firms to help cope with the outbreak.
At the moment, our guess is as good as yours. We’ll be publishing a thorough summary of the budget on Wednesday, so be sure to sign up for our newsletter. (You can do this in the left-hand column of our Blog homepage).
In the meantime, keep washing your hands – and don’t panic-buy soap and hand sanitiser. There needs to be enough for everyone if we’re to slow the spread of the virus!
About Mark Boulter
Mark Boulter is responsible for the efficient running of the firm’s infrastructure, and ensuring that THP delivers the best client service. Promoting the vision and culture across all branches, people are the key: “I like people who have a fresh approach and I’m happy for them to run with their ideas,” he says.
Communication across departments is crucial and Mark pioneers this. He ensure that people and departments not only talk to each other, but that they share ideas– whether they’re about marketing, finance, sales, strategy or any other topic that can result in us offering a better service. “I think helping to develop the next generation of THP people is essential to our success,” Mark adds. “We’ve a lot of talented people and our way of doing things increasingly attracts ambitious newcomers who are looking for a fresh approach. That’s good for us and even better news for our clients.”