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Unviable? Wave of job losses coming as UK cuts COVID support By Reuters

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© Reuters. FILE PHOTO: A man walks past a job centre following the outbreak of the coronavirus disease (COVID-19), in Manchester

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By David Milliken

LONDON (Reuters) – Like thousands of employers in Britain, Alison Griffin fears she could soon have to lay off more staff at her huge events venue when the government ends its flagship coronavirus job support programme in three weeks.

A planned Oct. 1 reopening of the sector never happened because of a second coronavirus wave, and Griffin’s business in central England will get little benefit from new support measures that the government wants to limit to “viable” jobs.

“It bewilders me,” said Griffin, whose cavernous, glass-walled Telford International Centre has hosted medical conferences, gymnastics tournaments and tattooing conventions, and still has bookings for 2021 and beyond.

The businesswoman cut 20 of her company’s roughly 80 staff from the family-run business at the start of the pandemic.

Now more might follow.

Britain is acting much sooner than European counterparts in scaling back job support, forcing businesses into tough decisions while they have little or no revenue.

As COVID cases surge again, hundreds of thousands of job losses are likely before the end of the year, industry groups and analysts warn.

Finance minister Rishi Sunak ripped up the economic orthodoxy of his Conservative Party at the onset of the pandemic with his Coronavirus Job Retention Scheme.

The scheme paid up to 80% of the wages of furloughed staff, at a total cost of about 50 billion pounds ($65 billion). It benefited around 9 million employees at its peak, cushioning the impact of an unprecedented 20% collapse in economic output

But Sunak has warned he cannot save all jobs, and – with one eye on record government borrowing – he will end the plan on Oct. 31.

Roughly 2 million workers were receiving some help from the programme in September, mainly in hospitality and entertainment.

In its place, businesses will receive a 1,000 pound grant for every employee they retain for at least three months, and the government will top up salaries of workers who return part time, as long as businesses contribute an equal amount.

For Griffin, this support falls far short.

She does not expect to qualify for extra aid for businesses that must shut down completely to slow the spread of COVID-19 because her 15,000 square metre venue can still host meetings of up to 30 people, a far cry from its 12,500 capacity.

“That’s like saying you’d allow a cinema to open to sell popcorn, but not to go to a film,” she said.

“Honestly, it’s very disappointing”

Next month Griffin plans to bring furloughed staff back part-time for basic maintenance work. But this is no long-term solution. “We’ve made some redundancies … and now obviously we’re concerned we may have to do the same again in either December or January,” she said.

The business previously had an annual turnover of around 9 million pounds, hosting as many as 140 events a year that brought up to 250,000 visitors to Telford.

Now revenue has fallen almost to zero, and the business has had to seek government-backed loans to keep going.

Attempts to adapt by promoting the venue as a space for film shoots have borne little fruit, and Griffin envies Germany, where trade fairs have resumed under social distancing rules.

PRE-CHRISTMAS LAYOFFS

Britain is currently reporting five times as many new cases as Germany, and has Europe’s highest death toll, with more than 42,000 fatalities.

The challenges in Telford are mirrored across Britain, and the events industry has written to Prime Minister Boris Johnson warning that 90,000 jobs are likely to go before Christmas.

For the broader hospitality sector, concerns are even greater. Last week it warned that well over half a million job losses were looming as the government imposed early closing on pubs and restaurants.

The Bank of England has forecast the jobless rate would hit 7.5% by the end of the year and the number of people unemployed would almost double to 2.6 million.

Official data on Tuesday showed unemployment in the three months to August rose to 4.5%, its highest since 2017, and there were 227,000 redundancies, the most since 2009.

(See graphic: https://fingfx.thomsonreuters.com/gfx/polling/xklvymeogvg/Pasted%20image%201602580974994.png)

Large employers looked on course to make 600,000 people redundant in the second half of 2020, said Tony Wilson, director of the Institute for Employment Studies think tank, based on notices of possible redundancies firms gave the government.

Wilson – like many analysts – thinks Sunak’s recent measures could have been better designed to limit job losses by targeting the sectors that have found it hardest to recover from lockdown.

The new Job Support Scheme requires firms to contribute to top-up pay for workers on reduced hours, in contrast to short-time schemes in countries such as Germany.

Sunak said he only wanted to support jobs where employers were confident enough to take staff back part-time – with the implication that other workers should seek new employment.

“For the employers that need this support most and that are facing the biggest financial difficulties, they’re just not going to be able to afford to take part,” Wilson said.

Britain’s government has said it expects employers to take account of redundancy costs, and the expense of hiring new staff once demand picks up, when deciding whether to use the scheme.

Low-interest government loans are available too.

This approach to weaning employers off wage support made more sense in August and early September, when coronavirus cases remained low, job vacancies were rising and some sectors were almost back to normal, Wilson said.

Now, many businesses with positive long-term prospects risk being forced into premature job cuts. “It’s the second wave that has made that strategy really risky,” Wilson said.

($1 = 0.7653 pounds)

(Graphic by Andy Bruce; Reporting by David Milliken; Additional reporting by Jason Cairnduff in TELFORD, England; Editing by Andrew Cawthorne)





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U.S. blacklists Chinese entities, individuals for dealing with Iran By Reuters

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WASHINGTON (Reuters) – The United States on Monday said it blacklisted two Chinese men and six Chinese entities for having dealt with Iranian shipping company Islamic Republic of Iran Shipping Lines (IRISL) and, in some cases, helping it to evade U.S. sanctions.

The U.S. State Department named the entities as Reach Holding Group (Shanghai) Company Ltd.; Reach Shipping Lines; Delight Shipping Co., Ltd.; Gracious Shipping Co. Ltd.; Noble (OTC:) Shipping Co. Ltd.; and Supreme Shipping Co. Ltd.

In a statement, it also said it had targeted Eric Chen, also known as Chen Guoping, chief executive of Reach Holding Group (Shanghai) Company Ltd., and Daniel Y. He, also known as He Yi, the company’s president.

As a result of being put on the U.S. Treasury Department’s Specially Designated Nationals list, the assets of the entities and individuals falling under U.S. jurisdiction are frozen and U.S. persons are generally barred from dealing with them.

“Today, we reiterate a warning to stakeholders worldwide: If you do business with IRISL, you risk U.S. sanctions,” Secretary of State Mike Pompeo said in the statement.

Among other things, the State Department accused the six entities of providing “significant goods or services” used in connection with Iran’s shipping sector. It also accused Reach Holding Group and its Reach Shipping Lines unit helping IRISL and its subsidiaries evade U.S. sanctions.

The sanctions are the latest imposed by the United States following President Donald Trump’s 2018 decision to abandon the 2015 Iran nuclear deal that Iran struck with six big powers.

Under that agreement, which aimed to prevent Iran from obtaining a nuclear weapon, Tehran committed to limit its nuclear activities in return for relief from economic sanctions.

Trump argues the 2015 deal did not limit Iran’s regional and ballistic missile activities and economic pressure instead will force Tehran into a broader deal. Iran denies seeking nuclear weapons.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Fed’s Bostic says significant portions of U.S. recovery are weak or nonexistent By Reuters

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(Reuters) – It will be a while before the U.S. economy is fully recovered and before the Federal Reserve will raise interest rates or remove the support it is providing financial markets, Atlanta Federal Reserve Bank President Raphael Bostic said on Monday.

“On balance, I am comfortable with our current policy stance,” Bostic said in remarks prepared for a virtual event organized for the Securities Industry and Financial Markets Association Annual Meeting. “As I have detailed today, though the U.S. economy continues to show clear signs of recovery, there remain significant portions where the recovery has been weak or nonexistent.”

The Fed moved quickly to support the economy in March by slashing rates to zero and launching emergency lending programs to support market functioning. Those programs will stay in place as long as needed, however, market participants should expect the central bank to sunset some of its emergency lending vehicles after the crisis has passed, Bostic said.

The economic crisis caused by the coronavirus pandemic caused the most pain for Black and Hispanic workers, who were disproportionately affected by job losses, Bostic said. Many of the jobs lost may not return, particularly in travel and food services, as companies adjust to lower demand or use technology to replace workers, he said.

Leaders in economics and finance need to openly acknowledge gender, racial and other disparities and support policies that can help close those gaps, he said. For the Fed, that includes supporting the labor market recovery to minimize the risks of long-term damage, Bostic said.

“Indeed, an unnecessarily slow labor market rebound could just drive historic wedges deeper, continuing to exacerbate the geographic, racial, gender, and income disparities in our economy,” Bostic said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Tolerating higher inflation ‘worth it’ to help achieve employment goals By Reuters

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© Reuters. Outbreak of coronavirus disease (COVID-19) in New York

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(Reuters) – Black and Hispanic workers and others in low-wage jobs were just beginning to see their job situation improve before the pandemic hit, wiping out many of those gains, Philadelphia Federal Reserve Bank President Patrick Harker said on Monday.

The Fed’s new framework should help to address shortfalls in employment, helping affected workers find new opportunities, Harker said.

“No longer will we head off higher inflation by preemptively raising interest rates before we have achieved full employment,” Harker said in remarks prepared for a virtual event organized for the HOPE Global Forum. “Tolerating the risk of slightly higher inflation, in our view, is worth it if it helps us achieve our employment goals.”

Job placement programs can also help people without college degrees move into better-paying roles with more opportunity for growth, Harker said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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