Daily Briefing: UK economy shrinks 20.4%, Spain's housing market set to crash, Brexit border backtrack

12 June: Your round-up of the issues leading today's agenda

12 June: Your round-up of the issues leading today's agenda

  • The UK economy shrank a record 20.4% in April as businesses and workers reeled under the lockdown designed to control the coronavirus pandemic, Bloomberg reports. The contraction, which followed a 5.8% drop in March, effectively wiped out almost 18 years of growth in two months, returning the economy to the same size it was in 2002. While a rebound is likely more businesses start to reopen, the grim figures show the scale of the challenge facing policy makers as they try to recover the lost ground.

  • Hertz, the car rental group facing bankruptcy, is looking to sell up to $1bn in stock to take advantage of frenzied trading in its shares, in an unprecedented move for a company whose solvency is in doubt, says the Financial Times. The proposed cash infusion, outlined in a filing on Thursday, would help fund the company’s reorganisation process and would come in lieu of the traditional senior loan tapped by most companies in Chapter 11 proceedings.

  • Spain’s $6 trillion home market looks headed toward another crash, according to economists who are studying the impact on property demand stemming from Europe’s strictest pandemic lockdown, according to Bloomberg. While it’s too early to estimate the full dimensions of the blow to demand caused by the health emergency that flared up in March, experts who study the Spanish market say the hit to housing prices in 2020 could range from 6.5% to 15%.

  • The UK government is expected to backtrack on its plan to introduce full border checks with the EU from 1 January 2021 over fears of the economic impact of coronavirus, The Guardian reports. The cabinet office minister, Michael Gove, is anticipated to make an announcement on Friday over border operations for when Brexit fully comes into effect at the end of the transition period. The UK had committed to introduce import controls on EU goods in the new year, but ministers are now expected to adopt a more flexible approach to prevent the departure compounding the chaos from Covid-19.




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