tv Worklife BBC News March 11, 2020 8:30am-9:01am GMT
this is worklife from bbc news, with sally bundock and karin giannone. cutting rates to battle covid—19. the bank of england takes emergency action ahead of what's being dubbed the coronavirus budget. live from london, that's our top story on wednesday the 11th of march. the uk central bank cuts interest rates to the lowest level ever as it tries to ease the economic impact of the outbreak. it's made its move. this comes as the chancellor prepares to deliver what's being dubbed the coronavirus budget, we'll look at what measures
they might take. and as the outbreak forces airlines to cancel thousands of flights. cathay pacific reveals it expects "substantial" losses this year. with coronavirus forcing millions of employees to work from home for the first time, we get the inside track on the challenges that can present. as governments and banks around the world try to alleviate the economic pain inflicted by coronavirus, what would help you the most, mortgage holiday, guaranteed to sick pay, health care, support for you? let us know — just use the hashtag #bbcworklife. hello and welcome to worklife. about an hour and a half ago... the bank of england has announced an emergency cut in interest rates to shore up the uk economy in the wake
of coronavirus. policymakers reduced rates from 0.75% to 0.25%, taking borrowing costs back down to the lowest level in history. the move follows similar cuts last week by other central banks including the federal reserve and bank ofjapan. it comes as the chancellor is expected to announce further measures to support growth and jobs in the budget later, more on that in a moment, but first let's get more on the impact of this emergency cut. andrew walkerjoins us andrew walker joins us from andrew walkerjoins us from our business news room. andrew, the uk central bank has made its move, what will the impact be? the aim is to tide over households and businesses, what the bank says is likely to be a large, sharp but probably temporary shock. it's particularly concerning that this is a point that has come out repeatedly in the statement it hasissued, out repeatedly in the statement it
has issued, the impact on small businesses. these are firms who may, in principle, be perfectly viable as businesses but are likely to see a sudden and sharp drop in their revenue. people are not going to cafe is, for example, or there are disruptions to deliveries of goods and so forth. but they may still have bills to pay, the rent, taxes, and perhaps we will hear something late on about some sort of indulgence from the treasury on the payment of taxes, but there will be businesses with very severe cash flow problems. and the bank is particularly concerned to ease their problem. partly with lower interest rates, which would reduce the cost of any overd rafts that rates, which would reduce the cost of any overdrafts that people and businesses of might run up but also any additional measures they have announced intended to free up more money to be lent by commercial banks to the private sector. and to what extent will this help the uk economy going forward? many argue that central banks around the world have
not got much that they can do to make effective relief. it's certainly true that central banks' ammunition is running pretty low, certainly in terms of conventional policy. interest rates are very low. in the uk we are down to onlyjust a little above zero. there is some more room to go, some central banks have taken their is below zero, there is a limit to how far they can go but it has happened. another point is that monetary policy, cuts in interest rates are a bit of a scatter—gun approach. they basically affect the whole economy and some people point out correctly that they the low interest rates won't persuade people to get on planes or go to cinemas —— the low interest rates. to help the businesses that are being most directly affected. that is perfectly true, but there are consequences that are already mentioned for a lot of businesses in
terms of the short—term cash flow implications. many of them will welcome anything, if it really does help them whether those kind of financial storms. andrew walker, thank you so much, joining us from our business unit, part of our team keeping across these stories today. they will be busy with the budget. as we've just mentioned, the uk will deliver its first budget in over a year today, with many already dubbing it a "coronavirus budget". until the outbreak emerged in the uk, the biggest headline was expected to be a huge cash injection for infrastructure projects across the country. but the economic challenge posed by the virus is now expected to dominate. financial help is expected for those who have to self—isolate and business but can't claim sick pay could come. as the number of cases and deaths grow, governments around the world are under pressure to act. yesterday, italy's deputy finance minister announced that mortgage payments will be suspended
across the country as part of measures to ease financial pressure caused by the outbreak. the japanese government have unveiled a $4 billion package including business loans and subsidies for working parents who must take leave because of school closures. in the us, president trump is looking at a payroll tax cut to help support the economy. however, 25% of american workers don't get paid sick leave from their employers and opponents argue this is where support is most needed. tej parik is chief economist at the institute of directors. your reaction before the budget to the interest rate announcement in the last hour? it will provide much—needed support for the business community, particularly in terms of confidence. we know financial markets have taken a bit of a stumble over recent weeks and days. it's mainly going to provide a bit
ofa it's mainly going to provide a bit of a confidence boost to traders. u nfortu nately, interest of a confidence boost to traders. unfortunately, interest rates take a long time to have an effect on the economy. how long time to have an effect on the economy. how soon long time to have an effect on the economy. how soon will they notice a difference? they take a while to pass through the economy and it won't exactly encourage consumers to go to the high street given the virus concerns. the other measures the bank of england put in place, reducing restrictions around how much banks need to hold back in terms of exposure and more liquidity to the market should certainly support a pick—up in loans should businesses need it at the moment. timing is everything, isn't it? an emergency announcement from the bank of england on the day the budget is going to be delivered. they are looking for high impact, aren't they? what are you looking for in this budget? supporting cash flow particularly in small and medium—size enterprises. for example, a lot of businesses will be very worried about tax payments. the chancellor could announce that there could be delays in allowing you to spread your tax payments over a longer period of time. if things
escalate and they find that banks are still unwilling to lend, you could get to a position where you have government backed guarantees into the market as well. we also know that there are already plans to cut business costs and provide some type of relief for investment. it's an opportunity now for the chancellor to go one step further on those measures too. looking at what we've reported from italy, the total lockdown that country is in, how much does that worry directors and businesses in the uk? how closely are they looking at that? we have been surveying our members and one or two have already reviewed continuity plans and many of them have been passing on advice from the government to their employees. and we know that already, some are enacting remote working procedures and some counselling travel. many businesses have these policies and plans in place. the concerns are about the uncertainty about how much will the impact be on demand and how many of your staff will have to go
into self quarantine? tej parik chief economist at the institute of directors, we appreciate your time. some might say it won't make you book a flight or get bums on seats on aeroplanes. hong kong based airline cathay pacific says it expects a "substantial" loss in the first half of this year as the impact of the coronavirus takes it toll. christine hah in our asia business hub has been following the story. how much of a loss is this, christine? according to mr patrick evi, 2019 was a turbulent year and now the first half of 2020 will be extremely challenging financially. this is their new ceo who just came on board last year. in numbers, the airline did better than the second half of 2019, making a $41; million
profit and many had expected them to lose money but over the full year, they still saw a 28% drop in profits last year and this year it is projecting what it says will be substantial for the first six months of the year. the headwinds have not stopped for hong kong's flagship carrier. passenger numbers and cargo trade already hit by the hong kong protests from june, nasty and the prolonged us— china trade war —— last year and. it will have to contend with the coronavirus epidemic globally. the airline has been aggressively cutting costs and gotten been aggressively cutting costs and gotte n 75% been aggressively cutting costs and gotten 75% of its staff to take unpaid leave and slashed supplier costs a nd unpaid leave and slashed supplier costs and already caught up to 75% of its flight capacity to april and indicated it will continue to do so in may. but this really is an industrywide crisis, it's notjust about cathay pacific delete one. the international aviation and transport association said the airline industry could lose more than $110
billion in revenue this year. we are seeing travel restrictions and the global spread of the violence doing much more to hurt passenger traffic than the trade war and hong kong protests combined. cancelled holidays, business trips, family visits and the situation which mr healey himself said isn't likely to change any time soon. how other airlines in asia have been dealing with this, one asian budget airline, airasia with this, one asian budget airline, air asia based in malaysia have said we are going to offer a big sale at this time, 6 million seats, some of them almost for free app for travel untiljuly 2021. different perspectives on this stuff up until travel. let's take a look at some of the other stories making the news... google is the latest big firm to ask staff to work from home to reduce the potential spread of the coronavirus. its parent company alphabet originally urged its washington workforce to work remotely,
but has expanded that to some 100,000 workers across the us and canada. the us the commerce department has again extended huawei's licence, meaning companies will be able to trade with them until mid—may. it was previously due to expire at the start of april. while in the uk, a vote went in huawei's favour to continue using their technology in the country's 5g network. tata steel europe is planning to cut 1,250 jobs as it faces "challenging circumstances" and "needs to urgently improve profitability", according to its chief executive. tata steel also said it will not replace employees who have retired or left the company. financial markets in asia, japan down 2% at the close, very negative but nothing compared to monday but
going in the wrong direction despite that big jump of the night before on wall street. wall street stocks and markets across the board were all up substantially in anticipation of more action from president trump to help the us economy. more on that in a second. it didn't come and we will see how that works later today. let's look at europe. ftse 100 see how that works later today. let's look at europe. ftse100 up nearly 1%, in the open it was up 2% and markets across europe higher and iimagine the and markets across europe higher and i imagine the sentiment will be positive throughout today with traders in anticipation of a lot of help coming out of that budget midday in the uk to help the uk economy and businesses. interesting to see the energy stocks up today, they were hammered at the start of they were hammered at the start of the week. now to the us, where bank bosses meet at the white house later today to talk about coronavirus, and how to help their customers. here's michelle fleury. after meeting with insurance ceos on tuesday, this wednesday, the white house is huddling
with the big us bank bosses to figure out how to address the coronavirus, which, as we've seen is roiling financial markets and the global economy. the ceo of goldman sachs, david solomon, citigroup's michael corbat and bank of america boss, brian moynihan, are amongst the wall street executives expected to attend. gordon smith is understood to be going forjpmorgan chase while the ceo, jamie dimon, recovers from emergency heart surgery, last week. and no doubt, talk will turn to what type of assistance these banks can provide to customers, given that one of the big concerns surround liquidity. what we're seeing is that with the disruption to business, cash flow may become an issue for more and more companies. time now for our daily look at some of the newspaper and website stories, which have caught our eye. joining me is deborah frost, of the personal group. welcome. you started with a story in the independent in the uk about social care and the coronavirus
crisis. we had a bad primary care but this is social care and another aspect. this caught my eye bust stop —— this is about. there is a lot of emphasis placed on the nhs, rightly so but the fact that many companies can ask employees to work from home. but the working backbone of britain is organisations like care homes, bus drivers, people who make our food and they can't work from home. there is an issue for companies in that situation and particularly in the care sector where they will be looking up the old and vulnerable people. we are talking about many frail, elderly patients who are dependent on care workers. if those ca re dependent on care workers. if those care workers have to stay at home and not come to work, there is a real crisis? yes, and people often indicate industry tend to be towards the lower range of pay. often the benefits we take for granted like sick pay and death in service, they don't have that cover so if they are not well, they won't be given sick pay and contingency agency, temporary staff, they are at risk
and employers are worried. we are wondering what might be in the budget if anything to try and guarantee some sort of financial help for those people. it is a large pa rt help for those people. it is a large part of the uk economy, the workforce. freelancers, gigsters, those not in full—time employment. that's right. about 7.5 million employees in the uk who are either self—employed, temporary, or they work for an agency. what that means is that they are not covered at the moment at that is something to look at. the new york times, another story you have chosen about this impact of the virus on entertainment coachella, a massive music festival has been postponed. until october and the massive organisations can do that and the james bond film isn't coming out until november.m that and the james bond film isn't coming out until november. it is all happening at the end of the year! everything is on hold. it is a challenge with huge capital projects like that, they can wait and artists
will work around them but where you are running a small cafe all you have a b and b and have hospitality events, that is different and once there rooms have been cancelled or those tables haven't been taken in a restau ra nt, those tables haven't been taken in a restaurant, they are gone for ever and that impacts workers. it does. and it impacts those who are running local hospitality. you wonder where the insurance sector comes in and who is covered to watch. the person going to coachella cancelling the accommodation and transport will be looking for some sort of compensation but the person renting out the room is also looking for that as well. absolutely. it is a challenge across the board in terms of providing that stability. i worked for an insurance company and it gives stability to claim on things. if it is covered. some insurance policies don't cover coronavirus. they don't cover pandemic saw these emergency events, some of them. it is a challenge but ican some of them. it is a challenge but i can see the budget today will
probably make quite a difference to people because my confidence over the next few weeks. we shall see. let's hope so. i wonder if the chancellor is watching, he's probably not. you might be a bit busy. he is pacing the floor, rehearsing his script with us in the background. who knows. still to come. . . some people working from home for the very first time, we will get the inside track on what challenges this presents. you're with worklife from bbc news. let's talk some more about the budget. our business correspondent nina warhurst is in darlington this morning to find out what people want from the chancellor. good morning, iam good morning, i am sure the chancellor is watching us. people in
darlington have been telling me at the train station that what they wa nt the train station that what they want is investment in transport and better infrastructure but obviously, coronavirus is dominating conversation for small and medium—size businesses. if they have to pay workers to self—isolate, where does that leave them? they are hoping later in the budget they will perhaps be a vat holiday and rebate for salaries given to staff who have to ta ke for salaries given to staff who have to take time off work or may be a quick grant that could be offered to them. the budget will come after the announcement this morning. interest rates have been cut to 0.25%, the lowest they have ever been. will it make a difference when it comes to halting the economic global slowdown? sarah is a personal finance expert. what is the evidence this will make us spend more unstimulated the economy? this will make us spend more unstimulated the economy7m this will make us spend more unstimulated the economy? it is part ofa unstimulated the economy? it is part of a package. unstimulated the economy? it is part ofa package. one unstimulated the economy? it is part of a package. one thing is the interest rate cut and the other thing is a funding scheme, they are pouring 100 billion into trying to help businesses to borrow more cheaply. the idea is that businesses
who run into issues with things like coronavirus will be able to borrow and get themselves over the hump. it isa and get themselves over the hump. it is a difficult question about what it means in terms of freeing up things like supply chains. that was a problem in the financial crisis, supply chain is held up by lack of financing and now it is much more complicated because coronavirus is playing its part in supply chains. it definitely will help people feel better off, if they are on a standard variable rate mortgage, they will have more money in them pockets and will look to spend that money —— their pockets. if you are relying on savings for an income and if you are looking to get an income from a pension, for example, you could see your income could drop as a result of interest rates falling. it is swings and roundabouts. huge pressure on the chancellor in exceptional circumstances. aside from coronavirus, there has been the promise he will fund the nhs as much as it needs over this crisis, that he will support small businesses but
they have also promised £20 billion on big infrastructure projects every year from now. on big infrastructure projects every yearfrom now. certainly, in this pa rt yearfrom now. certainly, in this part of the world, they will be listening out as to whether they come good on that promise. the budget is nowjust three hours away. you're watching worklife. a reminder of our top story: the bank of england has announced an emergency cut in interest rates to shore up the economy amid the coronavirus outbreak. now, millions of employees are working from home for the first time, as the world tackles covid—19. in the age of wifi and a mobile phone, remote working has become easier. but what does enforced isolation mean for productivity for employees? and how can employers get most out of their workers and how should they help their staff? tom hadley is director of policy, at the recruitment & employment confederation.
welcome to the programme, tom. it's a minefield for employers and employees, not to mention those who are known as gigsters, freelancers, what are you advising your members who represent some of the big employees in the country? we did some work before the outbreak and looked at what does a good 21st century need to look like and two things came out of that. one, the ability to deal with disruption and what a good example there, but the second was to be people focused. for business leaders across all sectors, putting people front and centre is the big thing we have found. that includes accommodating wherever possible working from home. what does putting people front and centre meani does putting people front and centre mean i was going to say? one, the information. you could say there is information. you could say there is information everywhere on this but one thing people need when there is a crisis is a trusted source. the trusted source for a lot of individuals is their employer, providing the right level of information, almost filtering it because there is so much out there, thatis
because there is so much out there, that is a big part of it. but it is about being accommodating and effects on working has been a trend for quite a few years. it is the biggest test we have ever seen in this country, can it work on such a wide scale? what about those workers who are not in that position that they can't work from home? we were discussing carers with deborah for example, bus drivers, those in hospitality they can't be at home. a waitress who maybe isn't even in full—time employment, they have to be at work. there is a huge test in some ways for intermediaries in our job market, care homes and factories through our recruitment businesses. we represent them in our recruitment agency. they have an onus to make sure that they are doing checks, is there a risk, we should be away but —— we should be aware but reassuring employers and employees, whether it isa employers and employees, whether it is a care home, in the warehouse, that they had been checked and haven't been travelling in some of
the areas that we know there is a big focus on. there is a big role for intermediaries in ourjobs market at this current time. for those about to embark on an unknown period of working from home, they could be starting today, for instance, is it very difficult for people to get a sense of the boundaries of working from home? your home life and your work life become blurred. when do you take a break? when do you say confident to your employer i'm going out for an hour? when do you say confident that thatis hour? when do you say confident that that is the end of my working day? it is organisational culture. different levels. on the one hand, technology peace, how people got the right technology enabling them to work from home? and the level of trust. when you bring it right back, it isa trust. when you bring it right back, it is a management challenge but you can go old school. we spoke to some members who pick up the phone and say this is what i am working on, is that the right thing? sometimes bring back old habits like picking up bring back old habits like picking up the phone and have a conversation. we asked many members.
one person said a long—term payroll tax waiver would be good. ben says help with childcare would be beneficial and andrew says mortgage holiday won't help the 35% of those who rent. a lot of this is down to government policy, what the government policy, what the government might say. for example, today in the budget, president trump in the us. there is a need to support business and individual work as well, perhaps working in the geek economy, etc. the government could... we speak to our members who have to deal with regulatory changes coming into force in april —— gig economy. we thought it would be a good thing to buy space by not having to deal with regulatory changes around tax and pushing back that would be a positive message. postpone business bureaucracy set managers and ceos can face on —— focus on dealing with it. making sure the employee feels comfortable. it isa sure the employee feels comfortable. it is a huge need to focus on the individual. if we could push back some of the regulatory changes due to come in force in april that would
bea to come in force in april that would be a strong statement. we are com pletely be a strong statement. we are completely out of time, thank you very much. we will be right across the uk budget here on the bbc, stay with us. good morning. spring was in the air yesterday across the south—east of england. temperatures got to 16, 16.5 celsius and it stayed quite mild overnight. we still have a bit of cloud across southern parts through this morning, giving some drizzle. further north, there are showery clouds and it would continue to bring showers into northern ireland and across scotland through the day. there will be wintry showers over higher ground. also some showers in wales and northern england this afternoon but further south, the cloud this morning tends to break up, taking the drizzle with it, so there will be sunny spells here developing. and quite windy again, those gusts of wind up to 45 miles an hour widely across the uk. and temperatures of 12 to 15 degrees in southern areas, another mild day here. not quite as mild further north.
through tonight, this cold front will gradually move south and east across england and wales. that will introduce the colder air down to the south—east of england. a much chillier night to come tonight and into thursday morning. with that, there will be some snow showers across scotland, but also the risk of some ice across northern ireland and in scotland into tomorrow morning, so something to be aware of, temperatures here close to freezing. further south, a much chillier night than the nightjust gone. we keep some wintry showers going across scotland and northern ireland. one or two showers dotted around elsewhere, but generally speaking on thursday, it is looking largely dry. the showers might become more frequent for a time across southern scotland, with some strengthening winds across northern ireland, scotland and the north west of england, all linked into this area of low pressure which will gradually move further eastwards as we go through the night and into friday,
where a ridge of high pressure will start to develop. friday, a chilly start to the day but lots of sunshine around. the cloud will tend to increase as the day goes on and you notice this area of rain will push into wales and the south—west of england by friday evening. as for the weekend, it remains a bit unsettled. we'll see that rain moving eastwards as we go through saturday. so some rain at times. sunday is a bit more showery, but there will be sunny spells around. and still some fairly gusty winds at times as we go through the weekend.
you're watching bbc news at nine with me, annita mcveigh — the headlines... the bank of england announces an emergency cut in interest rates to shore up the economy, citing the threat from coronavirus. the bank also says it will free up billions of pounds of extra lending power to help support businesses. and the governnor of the bank of england is expected to hold a news conference shortly — we'll go to that live. good morning, everyone. the front lines of combating the challenges of covid—19 comprises the extraordinary effo rts covid—19 comprises the extraordinary efforts of nhs professionals, carers, public health officials and volu nteers across carers, public health officials and volunteers across the country as