Here’s your next weekly update from Calculis, sharing the good, the bad and the more light-hearted news.

What’s happening?

The good

This week has seen a decrease in the reported daily new cases of coronavirus in the UK. With lockdown measures extended for at least another three weeks, we could see this figure continue to fall, helping ease pressure on the NHS.

Property funds remain suspended to protect investors

The coronavirus crisis has forced a number of providers to suspend commercial property funds as the combination of extreme markets and extraordinary social circumstances make it exceptionally difficult to value property.

A period of suspension will give the valuers time to better understand the impact that the crisis is having on direct property market valuations.

It is important to note that the suspension is not related to volatility, liquidity or cash flow constraints, but solely as a result of valuation concerns. We don’t feel the suspension is anything to be concerned about and will review our property allocation once the suspension is lifted.

The bad

The Office for Budget Responsibility (OBR) announced this week that a three-month lockdown followed by three months of partial restrictions would trigger an economic decline of 35.1% in the quarter to June alone. A drop this big would mark the largest decline “in living memory”, Robert Chote, chairman of the OBR has said.

Despite this bleak forecast, the OBR also stated that the UK economy is expected to get back to its pre-crisis growth trend by the end of 2020, but this future growth would depend on how quickly activity bounced back once restrictions were relaxed.

They have also predicted that there will be a more lasting impact on unemployment, which is estimated to rise by 2.1 million to 3.4 million by the end of June, with the jobless rate expected to remain elevated until 2023.

It is important to stress that this forecast is just one possible scenario. As we mentioned previously, there is no crystal ball. The exact course of this pandemic is incredibly difficult to predict, but with no vaccine currently available, changes to the situation are likely to be considered week by week and sector by sector, for the foreseeable future.


Update: What we need to see to achieve market stabilisation

1.Infection rates contained, leading to eased travel restrictions

Progress so far:
– China/ S. Korea infection rate not re-accelerating meaningfully
– Infections slowing in Europe and US

Further progress required:
– Ex-China EM situation doesn’t escalate
– Exit strategy that balances speed against risk of second wave

2. Policy response –Fiscal stimulus of sufficient size and nature & central bank backstop

Progress so far:
– Fed’s interventions helping high yield and investment-grade corporate bonds

Further progress required:
– Joint eurozone solution
– More encouraging signs that SMEs can access government facilities

3. Economic resilience

Progress so far:
– US unemployment so far deemed ‘temporary’
– Furlough schemes being well utilised in Europe

Further progress required:
– Sanguine earnings guidance
– Tracking unemployment


It’s not all doom and gloom…

Here are some other stories which show a different side to these unprecedented times.


Capt Tom Moore hailed by Prince William for £18m fundraiser

A 99-year-old war veteran who has raised more than £18m for the NHS has been hailed as a “one-man fundraising machine” by the Duke of Cambridge. Captain Tom Moore originally aimed to raise just £1,000 for NHS Charities Together by completing 100 laps of his garden before his 100th birthday.

Read more

Barbour switches from wax jackets to PPE

The world-famous clothing brand Barbour has begun manufacturing Personal Protective Equipment (PPE) at its South Shields factory. The company announced that it’s working with the Royal Victoria Infirmary in Newcastle and other North East Trusts to produce gowns and scrubs to support frontline medical staff.

Read more

‘Run For Heroes’ campaign launched

For those who are using their once-a-day outdoor exercise to go for a run, an organisation has been set up called ‘Run For Heroes’ encouraging people to run 5k, donate £5 and then nominate five friends to complete the same challenge.

Read more

Himalayas come into view for first time in 30 years in northern India

Some people are seeing the view of the Himalayan mountain range for the first time in their lives, thanks to a drop in air pollution caused by the country’s coronavirus lockdown.

Read more


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