Today's business and finance round up 7th May 2021

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7th May 2021

Good morning Happy Friday, a Malian women has just given birth to nonuplets, that's 9 - yes 9 - babies, setting a new world record.

Yesterday's market moves

FTSE 100 +0.5%  7,076 FTSE 250 +0.5% 22,491

It was another good day for the markets with the FTSE 100 up 0.5% to close at 7,076, a 14-month high. The main positive news flow was the Bank of England’s upgrade of economic forecasts (more details below).

ECONOMY

Bank of England predicts stronger economic recovery

The successful vaccine rollout and easing of lockdown restrictions means the Bank of England now thinks that the UK will grow at 7.25% this year (up from 5% they thought in Feb). This would be the fastest economic growth since the 1940s when the UK was recovering from World War II.

The bank thinks that this rebound will be driven by consumers spending the billions of pounds they have saved during the lockdown.

On the surface this sounds good however to put it in perspective the economy shrank almost 10% in 2020 – the steepest fall in 300 years. These new forecasts would only take us back to the size of the economy in 2019 by the end of this year.

The brighter economic forecast came as the central bank announced that it would keep the interest rate at the historically low level of 0.1%.

The bank also said that it would maintain the scale of its £895bn quantitative easing programme, this is when the bank buys bonds in order to keep borrowing costs low across the economy.

TRANSPORT

Trainline earnings not on track

Unsurprisingly 2020 was a difficult year for Trainline, the online and mobile app for train tickets and travel cards. Passenger numbers for the past year have been at just 5% of the year before. As a result revenue fell 74% and the company posted a £100m loss.

Trainline say that they have already started seeing signs of recovery with the vaccination roll out and easing of lockdown restrictions.

In the past year the company has continued to invest in technology and products. Trainline is aiming to take advantage of the shift towards online and mobile ticket sales, as travellers look to avoid ticket machines and station queues in the pandemic. The government is also encouraging passengers to book in advance.

But with more and more companies announcing that their employees won’t be returning to the office 5 days a week, it’s going to be tough for Trainline to return to pre-pandemic levels of earnings

Covid-19 Vaccine Update

• In the past 24 hours 139k UK adults have had their first dose and 404k have had the second dose.

• This means 66.3% of UK adults have had at least one dose of a vaccine, 30.9% of adults have had two doses.

• The US has said it would support a temporary waiver in the intellectual property rights for the Covid-19 vaccine. This would allow more companies to make them thereby increasing production so it can be supplied to more countries.

Other stories to keep you in the loop

• US recovery gathers pace – Jobless claims fall to a 13 month low as the economy reopens

• Thank u, Next – strong online sales helps Next increase their profit forecasts

• What the fish – French fishermen are protesting near Jersey because of a dispute on access to fishing waters

Stat of the day

In the UK the average current-account relationship lasts 17 years, while the average British marriage which ends in divorce lasts just 11 years and six months.