Budget 2020: what time is Rishi Sunak’s speech today, and what can we expect?

 Today’s top stories…

Chancellor Rishi Sunak delivered the UK’s first Budget since October 2018 today, pledging £30bn to help “British people, British jobs and British businesses”.

He vowed to protect the UK economy against the spreading coronavirus outbreak in what he said was the biggest fiscal boost to the UK in 30 years and an end to austerity. He added that next year would see the largest increase in departmental spending for 15 years.

The Chancellor also announced a £5bn emergency response fund to support the NHS and other public services in England, as well as more than £600bn to be spent on roads, rail, broadband and housing by the middle of 2025.

Meanwhile the Dow Jones slumped ended 5.9pc lower, entering a ‘bear market’ on coronavirus fears, down more than 20pc from its February peak.

It came after the World Health Organisation declared the coronavirus outbreak a pandemic.

Read more below:

8:12PM

Blog wrap

Well it has been quite a day, what with the Budget, the Bank of England and US stock markets. Thanks for following along.We’ll be doing it all again tomorrow, so join us then.

What to look forward to…

Interim results: Brooks Macdonald, Galliford Try, Go-Ahead, Knot Offshore Partners

Full-year results: Arrow Global, Cineworld Group, Computacenter, Equiniti, Funding Circle, Helios Towers, Intu Properties, Just Group, Tullow Oil

Preliminary results: Bodycote, Marshalls, Savills

Trading statement: Trainline

Economics: ECB rates decision, industrial production (eurozone)

8:05PM

BREAKING: Dow enters bear market

And that’s the closing bell! The Dow Jones has ended 5.9pc (around 1,470 points) lower, entering a ‘bear market’ on coronavirus fears. The index is down more than 20pc from its February peak.

It was another brutal rout today, dragged down by event cancellations, company warnings and the World Health Organisation declaring the coronavirus outbreak a pandemic.

The broad-based S&P 500 slumped 4.9pc to 2,741.31 while the  Nasdaq Composite Index shed 4.7pc to 7,952.05.

7:40PM

President Trump tweets

Donald Trump has said that he is “fully prepared to use the full power of the Federal Government” to deal with the current challenge of the coronavirus.

The US President is due to make a statement on the coronavirus later today.

7:22PM

…and the sell-off continues

The S&P 500 has now joined the Dow in bear market territory as stocks on Wall Street hit fresh session lows.

The Dow has fallen as much as 1,600 points (down 6.5pc) while the S&P 500 has lost 5.8pc.

The tech-rich Nasdaq Composite index is 5.6pc lower.

Stocks have been in the red all day, but losses accelerated after the World Health Organistion declared the virus a pandemic.

7:11PM

Coronavirus hits Boeing shares and cuts Heathrow passenger numbers

A Boeing 737 Max at the Renton factory 

A Boeing 737 Max at the Renton factory 

Coronavirus disruption has forced Boeing into multibillion-dollar borrowing and prompted the biggest fall in passenger numbers at Heathrow in nearly a decade, fuelling concern the aviation industry has ­entered a tailspin my colleague Oliver Gill writes. He adds:

Boeing’s troubles began with safety problems with the 737 Max but the pressure on its finances is now being compounded by order cancellations prompted by the outbreak.

The aerospace colossus dragged the Dow Jones into a bear market on an intraday basis, down more than a fifth from its February high, after it was ­revealed Boeing had been forced to draw down billions of a $14bn (£11bn) loan ­facility early to ward off a cash crunch.

Boeing has now lost more than 40pc of its stock market value in the past month as airlines cut off the money supply to its factories.

The mounting crisis in aviation was further signalled by Heathrow, which said it had almost 5pc fewer customers in February and warned that demand has fallen further during March.

6:49PM

Nearly half of FTSE 100 AGMs could be affected by virus

Some 41 blue-chip companies are due to hold their AGMs in April and May 2020 but the coronavirus outbreak raises concerns as to whether shareholder meetings will go ahead as usual.

According to analysis by global law firm Linklaters, the largest UK-listed companies could see a very low turnout for their AGMs if the public is advised to avoid large gatherings or there are widescale travel restrictions.

It is a legal requirement for companies with a December year-end to hold their meetings before July 2020.

With the outbreak expected to last for several months, the need to make critical business decisions and legal deadlines will put pressure on companies to continue with existing plans, rather than postponing until later in the year.

However, it should be possible for most AGMs to still go ahead, even with only a small number of shareholders present, as the legal quorum requirement for a UK company meeting is typically low.

6:31PM

Dow on track to close in bear market territory

With an hour and a half to go, things are not looking too good for the Dow (which is now 5.49pc lower).

It has fallen 20pc from a February closing high and into bear market territory.

6:16PM

LV stops selling travel insurance cover

Insurer LV has stopped selling travel cover due to the spread of coronavirus.

The company said: “In light of the impact that coronavirus is having globally, we’ve made the difficult decision to pause the sale of travel insurance to new customers.”

It comes a day after Aviva said it was also cutting back on travel cover in new insurance policies due to the outbreak.

Read more here: Aviva cuts back travel insurance cover amid coronavirus crisis

5:58PM

US stocks continue to plunge

Bloomberg has pulled together a quick list of the main moves in global markets…

5:37PM

Budget reaction: Funeral industry

Rishi Sunak announced regulation of funeral plans by the Financial Conduct Authority (FCA) in today’s budget, which will make it much more difficult for less scrupulous firms selling plans to continue to follow bad practices. Here’s some industry commentary from funeral services provider Dignity.

Paul Toghill of Dignity said:

This should reduce mis-selling and high pressure sales and make it easier for people to make good decisions. Regulation by the FCA should also deliver greater protection and an enhanced complaints process.

In particular, oversight by the Financial Ombudsman will make it easier to complain about a funeral plan provider. We also hope that funeral plans will be brought into line with other regulated financial services by being included in the Financial Services Compensation Scheme to provide a safety net should something go wrong with a plan provider in the future.

The period of transition to FCA regulation may create some uncertainty and confusion for people who hold funeral plans. It will be important that the Government and FCA keep to this timetable, working together with the sector to support consumers.

5:22PM

Barclays confirms coronavirus case at Canary Wharf building

Barclays

Barclays is based at 5 North Colonnade in Canary Wharf, London

Barclays has said that one of its employees at its London office buildings tested positive for coronavirus, adding to a growing list of financial firms sending staff home as the outbreak spreads.

The member of staff is based at 5 North Colonnade in Canary Wharf, which houses Barclays’ corporate and investment bank and is near the firm’s Churchill Place headquarters.

The individual has been in self-imposed quarantine since March 9, the company said, adding that it is deep-cleaning the area where the employee was based.

 “We are operating business as usual; we continue to monitor the situation closely and will take further action as appropriate,” Barclays said.

5:08PM

Meanwhile on Wall Street

The Dow is more than 5pc lower, while the S&P 500 and Nasdaq have fallen more than 4pc.

It comes as the World Health Organization has formally labelled the coronavirus outbreak as a pandemic.

4:52PM

FTSE 100 hits four-year low

London’s benchmark index has closed 1.4pc lower at 5,876.52, breaking below key technical support level to its lowest in four years.

The domestically-focused FTSE 250 lost 1.18pc, ended at 17,339.23.

Airlines and travel companies led the rout as concerns of the coronavirus outbreak continues.

4:38PM

Budget reaction: Pharmaceutical industry

Pharma

The Chancellor made a series of announcements on research and development which are important to the life sciences sector. It was announced that R&D tax credits would be increased from 12pc to 13pc, while central government investment in R&D would increase to £22bn a year.

There was also an additional £200m for the sector, although it was not specified what it would be used for.

Dr Richard Torbett, chief executive of The Association of the British Pharmaceutical Industry (ABPI), said:

Given the difficult circumstances this Budget is delivered in, we’re pleased to see the Chancellor’s commitment to science and research.

Increasing science investment and raising R&D tax credits are important steps to reaching the goal of 2.4 per cent of GDP spent on research, and will be critical to the future success of our industry.

We look forward to working with Government on a shared ambition to attract global investment to the UK’s thriving life sciences sector.

4:28PM

Good for businesses but borrowing could balloon

Iain Wright, director for Business and Industrial Strategy, at ICAEW (the Institute of Chartered Accountants in England and Wales) said:

“In the short term, businesses will be greatly assured by the government’s £30bn pledge to support the UK economy during the coronavirus crisis. Meanwhile, the long-term commitment to investing in start-ups, scale ups and research and development is encouraging, as is the desire to level up spending across the country.

“However, with no real tax increases announced, there needs to be a greater clarity on how these big spending pledges will be funded. It appears from first glance of the Red Book that most of today’s commitments are funded through extra borrowing. This results in government debt exceeding £2 trillion by the middle of the decade.”

 Alison Ring, ICAEW public sector director, said:

“Those wondering where all the funding for this planned spending will come from may be surprised to discover that the Chancellor has not followed the usual tradition of post-general election tax rises, but instead has decided to take advantage of ultra-low interest rates to borrow more than £330bn over the next five years. Public sector net debt is expected to reach £2.0tn by 2025, although the Government will hope that this will then be falling as a ratio to the size of the economy.

“Nevertheless, it is a Budget that many will be pleased with, even if a little surprising coming from the traditional champions of small government.”

4:14PM

European stock markets sink in late trade

As a quick break away from all the Budget news and reaction, here’s a quick market update before the closing bell in around 15 minutes time.

It seems that Europe has slumped further into the red as Wall Street slides across the pond.

The FTSE 100 is down 1.29pc while the wider FTSE 250 is 1.09pc lower.

In the eurozone, the Frankfurt Dax and Paris CAC are also 0.37pc and 0.51pc in the red.

4:07PM

Handover

I’ve been going a long time today and haven’t been respecting the best Government advice on healthy eating, so I’m gonna go hunt down a salad. Thankfully, LaToya Harding is riding to my rescue, and will take the blog from here. Thanks for following along!

4:00PM

What the Budget means for your finances

Personal finance

This week has been a major one for personal finances

A week that started with the worst one-day fall for British markets since the financial crisis has been followed by a Bank of England rate cut and the first Budget of the Conservative government, all under the shadow of a growing coronavirus crisis. 

My colleague Sam Meadows writes:

A lot has changed for you and your wallet in the past few days alone. 

Chancellor of the Exchequer Rishi Sunak used his first Budget to lay out a major package of support for anyone affected by the spread of Covid-19, but he also outlined the new Government’s plans for the future.

The Budget followed just hours after the Bank of England’s decision to reduce the Bank Rate from 0.75pc to 0.25pc, reversing a recent trend upwards.

Meanwhile, coronavirus continues to spread and has forced companies into lockdown and workers into self-isolation – as well as sending stock markets into freefall.

3:49PM

Is the Dow about to enter a bear market?

Trading is still pretty dire over in the US, and the Washington Post’s heather Long notes that the storied index is on the verge of entering a “bear market” – where prices have dropped more than 20pc from a recent high.

Here’s how the index has shifted today:

3:46PM

Budget reaction: The economists

There are numbers galore to pour over in today’s Budget documents, so let’s see what some economists have to say.

As I’ve mentioned several times, the forecasting provided by the Office for Budget Responsibility does not take the impact of coronavirus into account, so there’s going to be a fair bit of crystal-ball gazing going on today.

Ian Stewart, chief economist at Deloitte, said:

Mark Carney and Rishi Sunak have produced a forceful and convincing response to the crisis. In economic policy terms they just deployed the big bazooka.

Today’s coordinated actions suggest the government will do whatever it takes to help the economy through the coronavirus crisis. 

ING’s James Smith said:

The combined actions of the Bank of England and the UK Treasury will go some way to insulate firms against cashflow constraints over the coming weeks and months. This should help the pound’s short-term prospects, but the ongoing uncertainty around UK-EU trade talks is still likely to prove to be a drag on the currency later this year.

RaboBank’s Stefan Koopman says the announced package to tackle coronavirus is “clearly is at the higher end of expectations”. He added:

A little over three weeks after becoming Chancellor, Rishi Sunak has delivered what’s become colloquially known as the Virus Budget. The Bank of England’s policy decisions raised the expectations, but it has to be said that he still delivered

3:33PM

Digital services tax: devil in the details

It didn’t make the speech, but the digital services tax still found its way into the budget. My colleague Hannah Boland reports:

Many in the tech industry would have been expecting some sort of announcement on the digital services tax in today’s Budget, but instead any mention was missing. That is, until you look at the small print.

The full Budget documents says: “As announced at Budget 2018, the government will introduce a new 2pc tax on the revenues certain digital businesses earn from 1 April 2020. This will ensure the amount of tax paid in the UK reflects the value these businesses derive from their interactions with, and the contributions of, an active user base.”

But Treasury will be “giving  consideration to how the legislation applies to marketplace delivery fees and whether that application is consistent with the policy rationale of the DST”. What this means is that, whilst the Government is pushing ahead, companies which charge for delivery, like Deliveroo, could get some respite.

3:27PM

Global shares in the red

Away from Westminister, it has been a brutal opening on the US markets, which have plunged sharply amid fears over the coronavirus and the US response. 

Bloomberg TV

Credit: Bloomberg TV

Meanwhile, in Europe, the top indices have also moved into the red: 

Bloomberg TV

Credit: Bloomberg TV
3:23PM

Round up: What the Budget means for money

Here’s some more of the Telegraph Money team’s coverage of the Budget (so far):

3:15PM

Reaction: Business rates

Business rates will be suspended for smaller firms in retail, leisure and hospitality for the next 12 months – a tax cut worth up to £1bn. The Government has also launched a review of the levies, which is expected to conclude in the Autumn. That comes after sustained calls from small companies, who have complained they are buckling under current rate levels. 

Sacha Chorley, a portfolio manager at Quilter Investors, said:

The cancellation of business rates for small businesses, coupled with increases to the living wage, is a powerful combination that might help reverse some of the difficulties the retail sector faced over the past two years.

Jerry Schurder, from property consultancy Gerald Eve, said:

The removal of business rates for an expanded group of small retailers will be welcomed by those that benefit, and it is an entirely appropriate measure given the extraordinary circumstances that businesses face…

Sadly this discount will go the way of so many other reliefs from business rates, which have promised much whilst delivering little. Reliefs which constitute State Aid under European laws are limited to €200,000 over a three-year period and as these rules apply to the new Covid-19 relief, this measure will be of as good as no benefit to many companies.

3:08PM

Public toilets offered relief

My colleague Laura Onita has been digging around in some of the dirty details of the Budget. She reports:

More news on business rates… The tax will be flushed away for public lavatories. This should help cash-strapped councils from shutting them down.  Tangentially, high streets will also benefit from the legislation as fewer shoppers will be caught short with nowhere to go.  More than 600 lavatories have disappeared over a decade, 2018 figures revealed, mostly due to budget cuts.  

3:04PM

Reaction: Infrastructure

This was supposed to be the infrastructure Budget, but events conspired against the government. Nonetheless, £600bn is a big ticket. here’s some reaction.

David Zahn from Franklin Templeton says:

The Conservative Party’s majority win in December 2019 means that Sunak’s focus on infrastructure spending hasn’t come as too much of a surprise, with more than £600 billion in the budget earmarked for spending on roads, railways, broadband and housing by mid-2025.

EY’s Adrian Baschnonga said:

Funding commitments for gigabit broadband and the shared rural mobile network are significant developments which will support the Government’s levelling up ambitions. However, practical challenges still need to addressed, such as extending business rates relief to aid fibre rollout. Meanwhile, 5G’s role in helping to bring better digital connectivity to rural areas could be explored further.

Seán Kemple, from CLose Brothers Motor Finance, said:

The Chancellor’s pledge to boost investment into zero-emission cars and rapid charging hubs will be pivotal for the motor industry. The UK cannot approach a blanket ban on petrol, diesel and hybrid cars without a network that supports such a seismic transition. 

2:49PM

Reaction: Coronavirus

First up, the elephant in the room: Covid-19, and its effects on the economy.

Pantheon Macroecnomics’ Samuel Tombs says today’s plans show the chancellor is “not holding back”. He writes:

Chancellor Sunak’s “temporary, timely and targeted” fiscal response to the Covid-19 outbreak won’t prevent GDP from falling sharply over the next couple of months, but together with the BoE’s response earlier today, it greatly improves the chances that the UK economy rebounds in the second half of this year.

Markets.com’s Neil Wilson said:

This is large-level stimulus, it’s massive. We don’t know how it will turn out, but you cannot accuse the government of sitting on its hands. 

Jeremy Thomson-Cook, chief economist at foreign-exchange group Equals said:

This is how a government and central bank coordinate to combat a shock to an economy. A lot of other governments could learn from this. Chancellor Sunak isn’t just throwing the kitchen sink at coronavirus; he’s flung the taps, fridge and hob in as well.

2:43PM

Reaction time!

My inbox is being battered currently – let’s turn on the reaction taps.

2:38PM

‘Decision must be made’ on social care

Social care

Successive governments have failed to deal with the social care crisis Credit: Kirsty O’Connor/PA

Here’s more on one of the issues I noted was missing from Rishi Sunak’s speech: the Government has written to MPs asking for ideas on how to fix the social care crisis.

My colleague Sam Meadows reports:

The social care system has been stretched to breaking point as rising costs and frozen thresholds for support have left thousands forced to sell their homes to meet care home fees.

Boris Johnson has promised to find “cross-party consensus” for a fix to the problem and documents released after Mr Sunak’s first statement revealed that his Government has “written to parliamentarians” to achieve this.

It was a Conservative manifesto pledge that no one would have to sell their home to pay for care. 

2:33PM

The biggest loosening since 1992 – in a chart

Here’s another interest sets of charts from  the OBR, which says:

The Government has proposed the largest sustained fiscal loosening since the pre-election Budget of March 1992 (which was reversed within months after the UK left the European exchange rate mechanism in September that year).

OBR

The watchdog notes that today’s pledges effectively bury the austerity legacy of the Conservative/Liberal Democrat coalition Government:

The largest components of the fiscal loosening are significant increases in departmental spending plans – for both current and capital. As regards current spending, the Budget completes the reversal of the cuts to real departmental spending per person undertaken by the Coalition government.

2:26PM

OBR: Coronavirus will have ‘significant adverse effect’ on the economy

Here’s what the OBR said on coronavirus, which has arrived too late to be fully factored into its calculations (the calculations for the economy and the public finances were locked in on 18 and 25 February respectively):

In addition to its impact on public health, the coronavirus is likely to have a significant adverse effect on the economy and public finances in coming quarters. But neither the size nor the duration of this effect are possible to predict with any confidence…

With large numbers of people potentially sick – or restricting their movements to avoid becoming so – the coronavirus is likely to reduce both the demand for goods and services in the economy and the ability of businesses at home and abroad to supply them. That will temporarily reduce private sector incomes and spending (and hence tax revenues), while putting upward pressure on government spending to help address the outbreak. This implies additional upward pressure on the budget deficit and public debt. But the impact on the public finances over the medium and longer term is likely to be less significant, unless the outbreak inflicts lasting damage on the economy’s supply capacity.

OBR

The OBR’s forecasts were locked in before the effects of coronavirus became clear Credit: TOBY MELVILLE/REUTERS
2:23PM

OBR: Budget will add 5pc to debt by 2025

The OBR says the direct effects of the Budget package on public sector net borrowing will  add progressively more to debt over the period, reaching £148bn in 2024-25. It adds:

The cumulative impact on debt at our forecast horizon of the additional borrowing announced in the Budget is the largest since June 2010, when the Coalition Government’s first Budget was expected to reduce debt by 6pc of GDP. Subsequent fiscal events typically saw much smaller policy packages. Since the 2015 election, successive Conservative Government policy packages have added to debt at the forecast horizon.

Here’s how that looks as a chart:

OBR

2:18PM

Coronavirus cases hit 456

Here’s the latest update on UK coronavirus cases. The number of people testing positive has risen from 373 yesterday to 456, a 22pc increase. The death toll remains at six.

2:15PM

OBR verdict

The OBR’s full verdict is available to read here.

The spending watchdog says:

Overall the impact of the Government’s policy decisions on borrowing is around half as large again as the previous largest policy loosening over the past decade (in Budget 2018). The only time fiscal policy has been changed by a larger margin in our forecasts was the 1.4pc of GDP average fiscal tightening in the Coalition Government’s first Budget in June 2010, when it set out its plans to reduce the post-crisis budget deficit it had inherited.

Looking back further, this is the largest planned sustained giveaway at any fiscal event since Norman Lamont’s ill-fated pre-election Budget in 1992. The loosening is similar in shape and modestly larger in scale to that in Gordon Brown’s 2000 Budget, which – like this one – was dominated by public spending increases. These were predicated on the continuation of strong tax receipts, but were then undermined when the dotcom bubble burst.

Rishi Sunak

Rishi Sunak in the Commons today with Boris Johnson Credit: STRINGER/AFP
2:11PM

OBR: Debt to hit £2 trillion

Here are some key charts from the Office for Budget Responsibility: 

2:07PM

Spending plans for the coming year

Here’s the breakdown, from the full Budget documents, of how money will be spent in the coming year. 

Budget

And here’s a breakdown of the total cost of the policy decisions. Looks like the magic money tree has been found:

Budget

2:04PM

Read the Budget in full

If you wish to read the Budget or its associated documents in full, you can find them here.

Budget

The cover of today’s Budget
2:02PM

The big numbers

There were reams of pledges and numbers in that Budget speech. Here’s a quick breakdown of the key figures:

  • £30bn to fight coronavirus
  • £600bn for infrastructure (much of which was already pledged)
  • The OBR forecasts (not taking coronavirus into account) are for the economy to grow 1.1pc in 2020, and 1.8pc in 2021, with borrowing at 2.1pc of GDP next year, and 2.8pc in 2021–2022.
1:55PM

Cut to tax on digital publications boosts newspapers

A potentially savvy fob to newspapers made up part of today’s announcement via the abolition of VAT on digital publications. The Guardian’s Jim Waterson tweets:

1:54PM

What’s missing?

There were some big holes in today’s Budget. The chancellor did not directly address:

  • Social care
  • The digital services tax
  • Defence
1:51PM

Catch-up time

Rishi Sunak

Rishi Sunak has turned on the spending taps Credit: Chris J. Ratcliffe/Bloomberg

After over an hour of drinking straight from the fiscal news tap, what sense can we make of the Budget? Labour leader Jeremy Corbyn’s on his feet now, saying the coronavirus crisis “exposes the cracks” in Britain’s public services.

Mr Corbyn says the government has shown “complacency” over climate change, and challenged the Government on what its promises will mean for workers on zero-hours contracts.

If you need a switch to relative calm, head over to our round-up with my colleague Tom Rees

The Telegraph Money team has broken down who the big winners and losers are from today’s announcements:

Fact-checkers will be working furtively to put all those numbers together: it’s pretty typical behaviour for chancellors to dabble in some double-counting during Budgets, and several of Rishi Sunak’s announcements were not new.

That £30bn coronavirus figure appears to be the headline – some very eye-catching shifts there. I’ll round up some reaction shortly.

The FTSE 100 went on a bit of journey during that speech, dipping negative briefly, then turning flat, then dropping again.

1:41PM

£100bn more on public services by the end of this Parliament

The chancellor just wrapped up after more than an hour on his feet. He told MPs: “by the end of the Parliament, day-to-day spending on public services will be £100bn higher in cash terms than it is today.”

He concluded by saying:

Creating jobs. Cutting taxes. Keeping the cost of living low. Investing in our NHS. Investing in our public services. Investing in ideas. Backing business. Protecting our environment. Building roads. Building railways. Building colleges. Building houses. Building our Union. A Budget that delivers on our promises. A people’s Budget from a people’s Government. And I commend it to the House.

1:38PM

£6bn of new funding for the NHS

On the national health Service, the chancellor says:

We’ve already provided the NHS with a record funding increase. £34bn over five years – the biggest cash increase in public services since the Second World War. Today I can go further. I can announce over £6bn of new funding in this Parliament to support the NHS.

That new money will deliver: 50,000 more nurses. 50m more GP surgery appointments. And work starting on 40 new hospitals. And you heard that right, 40 new hospitals. We promised to back our NHS – this Budget gets it done.

Famously, that 40 new hospitals pledge is a little contentious. FullFact reports the Government is actually only reconfiguring six hospitals.

1:35PM

More pledges

Here’s a further slew of pledges:

  • VAT on digital publications chucked
  • Extend the Affordable Homes Programme with a multi-year settlement worth £12bn
  • Cut interest rates on lending for social housing by one percentage point
  • A new £400m fund for Mayors to build on Brownfield sites
  • £650m of funding to help rough sleepers into permanent accommodation
  • A new stamp duty surcharge for non-UK residents
  • A new building safety fund worth £1bn, aimed at removing dangerous cladding from buildings
1:29PM

A hole in the numbers?

On potholes, the chancellor said:

I’m announcing new investment in local roads, alongside a new £2.5bn pothole fund – that’s £500m every single year; enough to fill, by the end of the Parliament, 50 million potholes.

Here are the slightly eye-browing raising calculations behind those figures, via our reporter Oliver Gill:

1:26PM

Regional thinking

Rishi Sunak says “we’re going to change the whole mindset of Government” to consider regions more prominently. As well as announcing extra money for governments in Scotland, Wales and Northern Ireland, he says:

We’ve agreed today a new devolution deal in West Yorkshire, with a directly-elected Mayor for the region. And to make sure that it isn’t just Londoners who benefit from the kind of long-term transport deal that helped TfL… I’m announcing today that the new West Yorkshire Mayor will, along with seven other Metro Mayors… get new, London-style funding settlements, worth £4.2bn.

He said many Treasury staff will move outside the capital, adding: “our ultimate ambition is to move 22,000 civil servants outside central London”,

He has also announced an investment in “strategic roads and motorways”, which he says is will total £27bn of spending on tarmac. There’s also a £2.5bn pothole fund planned – as The Times reported earlier today.

He also says the Government is going to sort issues with the A303, the famously traffic-clogged route from Hampshire to Devon that runs past Stonehenge. No specific details, however.

1:21PM

Environmental pledges

The chancellor has offered several environmental pledges. Here’s a wrap:

  • Help companies move to net zero
  • Introduce a new Plastics Packaging Tax
  • Introducing a comprehensive package of tax and spend reforms to make it cheaper to buy zero or low emissions cars, vans, motorbikes and taxis
  • £300m in tackling nitrogen dioxide emissions in towns and cities across England
  • Will more than double R&D investment in the energy innovation programme to £1bn
  • Abolish ‘Red Diesel’ tax relief, except for farmers
  • £640m for a new Nature for Climate Fund
  • Will plant around 30,000 hectares of trees – that’s a forest larger than Birmingham
  • Will invest at least £800m to establish two or more new Carbon Capture and Storage clusters by 2030

He says:

Taken together, this Budget invests £1bn in green transport solutions

1:15PM

Science and innovation pledges

On science and research, Rishi Sunak says:

I will increase investment in R&D to £22bn a year. That is the fastest and the largest increase in R&D spend ever. As a percentage of GDP, it will be the highest in nearly forty years – higher than the US, China, France and Japan.

He adds:

I’m investing £1.4bn in our world-leading science institute at Weybridge, where, as we speak, they’re working to analyse samples of coronavirus. To secure our leadership in the technologies of the future, I’m investing over £900m in nuclear fusion, space and electric vehicles.

Some Dominic Cummings energy entering the speech here:

I can confirm that we will invest at least £800m in a new blues-skies funding agency here in the UK… modelled on the extraordinary ‘ARPA’ in the US

He says the Government will put about £400m into funding “high quality research”.

1:12PM

Entreprenuers’ Relief cut

On Entrepreneurs’ Relief, which he notes has been labelled the UK’s “worst tax break”, Rishi Sunak says:

We need more risk-taking and creativity in this country, not less. So I have decided not to fully abolish Entrepreneurs’ Relief today. Instead, I will do what the Federation of Small Businesses called “a sensible reform” and reduce the lifetime limit from £10m to £1m. 80pc of small business owners are unaffected by today’s changes.

1:10PM

Spending pledges

  • £130m of new funding to extend Start-up Loans
  • £200m for the British Business Bank to invest in scale-ups 
  • £200m for life sciences
  • More money for Growth Hubs; 21 cities with British Library business support
  • £5bn of new export loans for businesses
1:08PM

Tax cuts

The chancellor has just announced a series of tax cuts:

  • Abolishing VAT charges on women’s sanitary products – the so-called ‘tampon tax’
  • Freezing duties on spirits, wine and the beer (the last one gets a big cheer)
  • Fuel duty frozen
  • Higher business rate discounts for pubs
1:06PM

Niesr: Coronavirus presents serious threat

It would be appropriate to have some alarms going off gently in the background as the chancellor speaks. The highly-respected National Institute of Economic and Social Research’s latest economic forecast says the outbreak presents a “major threat to the economic outlook”.

1:04PM

Slogan time

Echoing the Conservatives’ successful “Get Brexit Done” slogan from the last election, the chancellor has rattled off a list of things the government has got done… or plans to. They include minimum pay rises, infrastructure spending, and investment in science.

1:02PM

‘Budget surpluses for next five years’

Here’s some more detail on Government spending. The Chancellor says:

Today the OBR report a current budget surplus in every one of the next five years. And in the target year of 2022–23, we have fiscal space of nearly £12bn… The OBR forecast that borrowing will increase slightly from 2.1pc of GDP in 2019-20 to 2.4pc in 2020-21 and 2.8pc in 2021-22. It falls to 2.5pc, 2.4pc and 2.2pc in the following years.

But the coronavirus is likely to cast major doubts over those numbers.

12:59PM

Thanks to Carney

Rishi Sunak has offered thanks to Mark Carney, who will step down at the end of this week. He says:

I’m sure the whole House will join me in taking this opportunity to thank Mark Carney, the Governor of the Bank of England for his 7 years of dedicated public service

12:57PM

Growth forecast upgraded

Rishi Sunak is now invoking the predictions of the Office for Budget Responsibility (who will hear more from later). He says without the coronavirus, the trajectory of the UK economy “would have led to growth of 1.1pc in 2020 and 1.8pc in 2021, then 1.5pc, 1.3pc, and 1.4pc in the following years”. But he adds:

The OBR have said that, as a direct result of the plans I’m announcing, growth over the next two years will be 0.5 percentage points higher than it otherwise would have been.

We’ll get into the nitty-gritty of those numbers later.

12:53PM

£12bn directly to fight virus in £30bn overall plan

The chancellor says:

Taken together, the extraordinary measures I have set out today represent £7bn to support the self-employed, businesses and vulnerable people. To support the NHS and other public services, I am also setting aside a £5bn emergency response fund – and will go further if necessary.

He adds more is coming, however:

Those measures are on top of plans that I will set out later in this Budget, which provide an additional fiscal loosening of £18bn to support the economy this year. That means I am announcing today, in total, a £30bn fiscal stimulus to support British people, British jobs and British businesses through this moment.

12:52PM

Business rates temporarily abolished for smaller businesses

A big (if temporary) crowd-pleaser for small businesses: the chancellor says shops, cinemas, restaurants, and music venues with a rateable value of less than £51,000 will pay no business rates in the coming year.

He says this relief will also be extended to: museums, art galleries, and theatres; caravan parks and gyms; small hotels and B&Bs; sports clubs, night clubs; club houses, and guest houses.

Rishi Sunak says he is launching a “fundamental review” to business rates that will conclude by the Autumn, but says this will not benefit some small companies. So he adds:

I am providing, to any business currently eligible for the small business rates relief, a £3,000 cash grant per business. This is a £2bn cash injection direct to 700,000 of our smallest businesses.

12:47PM

Three-point plan

Mr Sunak has set out a three-point plan to fight the economic effects of coronavirus. He says:

  1. Whatever extra resources our NHS needs to cope with Covid-19, it will get
  2. During the immediate crisis, if people fall ill or can’t work, the Government will support their finances. 
  3. The Government will provide statutory sick pay for businesses with fewer than 250 employees for up to 14 days, and also created a loan scheme

Here’s more on that second point:

  • Statutory sick pay will also be available for all those who are advised to self-isolate – even if they haven’t yet presented with symptoms
  • The Government will make it “quicker and easier” to access benefits
  • Rishi Sunak said he is relaxing the requirement for anyone to physically attend a jobcentre
  • The Government is creating a new £500m Hardship Fund for local authorities “to directly support vulnerable people in their local area”
12:41PM

‘Temporary disruption’

Mr Sunak is laying out the likely impacts from the coronavirus. He says:

  • On the supply side, up to a fifth of the working age population could need to be off work at any one time
  • Business supply chains are being disrupted around the globe
  • For a period our productive capacity will shrink
  • There will also be an impact on the demand side of the economy, through a reduction in consumer spending

He adds:

We can’t avoid a fall in demand, because the primary driver of that reduction in consumption

The chancellor says the Government’s response will be “temporary, timely and targeted”, and has been designed to work in conjunction with the Bank of England’s measures.

12:39PM

Virus is key challenge, but not only challenge

The chancellor’s opening comments have been focused closely on the economic challenge of coronavirus, but he isn’t pigeonholing himself. He has told MPs:

Yes, this virus is the key challenge facing our country today. But it is not the only challenge. We have just had an election where people voted for change.

Change in our economy, change in our public services, change in the cost of living, change in our economic geography. This Budget delivers on that change. 

12:36PM

Sunak: ‘We will do right by you and your family’

The Chancellor’s speech has begun. He opens by speaking about the biggest topic on everyone’s minds – coronavirus. Rishi Sunak:

I want to get straight to the issue most on everyone’s mind– coronavirus Covid-19. I know how worried people are. Worried about their health, the health of their loved ones, their jobs, their income, their businesses, their financial security. And I know they get even more worried when they turn on their TVs and hear talk of markets collapsing and recessions coming. People want to know what’s happening, and what can be done to fix it.

What everyone needs to know is that we are doing everything we can to keep this country, and our people, healthy and financially secure. We are clear that this is an issue above party. We will do right by you and your family and I know I will have the support of the whole House as I say that. 

12:35PM

Budget about to begin

There’s some movements occurring within the Commons to prepare for the Budget presentation. Any minute now…

12:33PM

Last-minute mortgage fun!

More on that interest rate cut. My colleague Tim Wallace reports:

Most mortgages are fixed term, so the Bank of England’s rate cut will not have an instant effect on the majority of indebted homeowners. Only 25pc are on variable rates.

But that does not mean the policy is worthless. Between 30,000 and 40,000 owners remortgage every month – 10,000 per week – and they will find their outgoings tumble.

The typical rate on a five-year fix has dived by one-third or more in the past five years.

With 30,000 to 40,000 people remortgaging every month, plus 30,000 first-time buyers and 30,000 movers – so that is 100,000 people per month who will lock in a new lower rate.

12:31PM

Any moment now…

Mr Sunak will begin his speech shortly. Boris Johnson has said the Budget will promise an “infrastructure revolution”. Here’s how the pound stands:

12:27PM

A reminder of how we got here…

  • Today’s Budget was supposed to be delivered by Sajid Javid on November 6th, but it was delayed…
  • …and then Sajid Javid was fired (becoming the second chancellor ever not to deliver a budget)…
  • …and now a fiscal plan that was supposed to be all about big spending projects and infrastructure is being overshadowed by coronavirus.

Something else to look out for is whether Rishi Sunak chooses a thematic tipple as he presents his plans:

12:20PM

Flashback: Carney announces stimulus

If you feel like taking a (very) short trip down memory lane to about 9am, here’s a video of Mark Carney announcing stimulus plans this morning:

12:14PM

Budget 2020: Key points

After only being given the top job at the Treasury last month, Rishi Sunak has pledged to “lay the foundations for a decade of growth”. 

Things are about to get very busy here, so if you’re interested in a slightly slower pace, keep my colleague Tom Rees’ summary piece open: he’ll be rounding up the biggest lines from the chancellor’s speech today.

12:10PM

Russell Lynch: Dr Carney’s medicine won’t be a magic bullet for a coronavirus-hit economy

Bank of England

The Bank of England has cut interest rates to 0.25pc

Our Economics Editor Russell Lynch has offered his pre-Budget take on the Bank’s sudden rate cut. He writes:

Nobody at the Bank of England has succumbed to coronavirus – yet – but the economy is in for a nasty dose.

If Mark Carney was expecting a quiet final week in the job as Governor, the outbreak has ensured otherwise. After six-and-a-half years, the Canadian is going out with a bang.

Savers will wince at a half a point cut in interest rates – which leaves them lower than when Carney joined the bank in 2013 – but as a “shock and awe” statement of intent from Threadneedle Street as the virus spreads, this was pretty impressive. The overall package including bank credit lines is estimated as providing a stimulus “north of 1pc” to GDP growth.

  • Read his full analysis here
12:06PM

PMQs – live

You can also watch live here (refresh the page if this doesn’t load): 

12:03PM

PMQs now underway…

Over in the Commons, Prime Minister’s Questions has started. I’ll spare you the gory details (follow our politics blog for those). Rishi Sunak is set to speak right after, at roughly 12:30pm.

12:01PM

Goldman Sachs: the bull market is over

If the market tumult we have seen over recent days wasn’t enough, Goldman Sachs has firmly stuck the boot in, calling time of the unprecedented period of growth for US stocks seen since the crisis.

The US investment bank says:

After 11 years, 13pc annualised earnings growth and 16pc annualised trough-to-peak appreciation, we believe the S&P 500 bull market will soon end.

Its analysts wrote that the benchmark S&P 500 index will fall another 15pc by the middle of the year, before recovering towards the end of the year.

11:56AM

Mark Carney’s ‘big package’, explained

Mark Carney 

Mark Carney is leaving the Bank with a bang Credit: Peter Summers/Pool via REUTERS

The Bank of England’s three policy committees have taken emergency action to tackle the deepening economic fallout of the coronavirus and ease the pressure that is likely to mount on small businesses.

But what does it all mean?

My colleagues Tim Wallace and Tom Rees are on hand to explain – and they’ve brought charts. They write:

This is a sweeping package of measures designed to be a “big bazooka” against the economic impact of Covid-19.

The Bank hopes it will support lending to businesses and prop up demand in what promises to be a difficult few months for the economy.

However, the coronavirus is a very different threat to the economy compared to the financial crisis. Cutting interest rates and aiding lending cannot help with the supply and demand shock that is facing the economy.

The central bank’s tools cannot stop offices being closed by the outbreak, supply chain disruption in factories, events being cancelled or shoppers staying at home because of quarantines. That is an economic hit that will be very difficult to mitigate by policymakers.

  • Their piece tackles the big questions: read it here
11:46AM

Might the chancellor be carrying more than a red box?

11:45AM

Strike a pose

Here are more photo from Downing Street:

Budget

Credit: Frank Augstein/AP

Budget

Credit: Aaron Chown/PA

Budget

Credit: Dan Kitwood/Getty
11:39AM

The box is out!

The chancellor is has just done the traditional photo op with his Budget red box. He’s now off to the Commons.

Rishi Sunak stands outside No 11 Downing Street and holds up the traditional red box that contains the budget speech

Rishi Sunak stands outside No 11 Downing Street and holds up the traditional red box that contains the budget speech Credit:  Kirsty Wigglesworth/ AP

Here’s a photo of Rishi Sunak meeting with Mark Carney earlier:

Rishi Sunak

Chancellor Rishi Sunak (left) meeting with Mark Carney in Downing Street before heading to the House of Commons Credit: Stefan Rousseau/PA
11:27AM

Bracing for impact

Not long to go now – the Commons’ deputy speaker Dame Eleanor Laing has given a cheeky nod to Rishi Sunak’s infamous Yorkshire Tea photo in a tweet this morning:

11:25AM

Markets steady

Things have come off somewhat from the sessions high we saw earlier today, but markets are still steadily ahead after yesterday’s drops. Not a hugely energetic session, however.

Bloomberg TV

Credit: Bloomberg TV
11:20AM

Italy launches €25bn plan to fight virus impact

Giuseppe Conte

Giuseppe Conte Credit: FABIO FRUSTACI/EPA-EFE/REX

Italy – the European country worst-hit by the coronavirus outbreak – is preparing to spend up to €25bn to shield its economy from the impact of coronavirus.

Bloomberg reports:

Finance Minister Roberto Gualtieri said the cabinet is likely to approve a first package worth about €12.5bn by Friday. The rest will be a reserve to pay for any further measures, he said in a joint press conference with Conte on Wednesday. Gualtieri said the government will ask parliament to increase the country’s deficit targets by €20bn.

The provisions under discussion include help for workers facing temporary layoffs, boosting a guarantee fund for loans to small- and medium-sized companies, compensation for firms whose turnover has plunged more than 25pc and some form of moratorium for business and personal mortgage repayments, according to two officials who declined to be identified discussing confidential deliberations.

11:08AM

Sunak’s full statement

Here’s the full readout to reporters on what Rishi Sunak told the Cabinet. From a Number 10 spokesperson:

The chancellor set out the measures being taken to manage the impact of coronavirus, laying out details of his economic action plan that will be announced at budget.

He outlined how this plan – combined with the measures announced by the governor of the Bank of England this morning – will make the UK one of the best placed economies in the world to manage the potential impact of the virus. The chancellor added the budget will ensure businesses, the public and those in public services working on the front line against the virus get the support they need.

He said despite the impacts of the outbreak being uncertain, we have the economic tools to overcome the disruption caused by the virus and move the country forwards.

11:05AM

What does the interest cut mean for you?

Bank of England

The Bank of England has cut interest rates back to record lows Credit: Luke MacGregor/Bloomberg

Interest rates are a key part of the economy, and this morning’s cut has wide implication for savers, homeowners, or indeed anyone with a close eye on their personal finances.

Telegraph Money’s Sam Barker and Adam Williams report:

Homeowners should benefit from lower mortgage rates after the Bank of England announced it has cut Bank Rate by 0.5 percentage points to 0.25pc.

But while borrowers will rejoice at lower monthly payments, further pain is expected for savers who have already battled against low rates for years.

The most generous savings deals are expected to disappear from the market, and millions of existing savers will see their yearly earnings drop.

They’ve broken down the cut’s key implications.

11:00AM

HSBC unveils support package for customers affected by coronavirus

HSBC has become the latest lender to announce a package of support for customers to help them deal with the fallout from the Covid-19 outbreak.

The bank says:

For personal customers in financial difficulty, this could include:

  • Short term support through reduced or deferred payments for mortgages, with longer term support through extending the remaining term of their mortgage switching rates or switching part or all to interest-only mortgage arrangements
  • Giving customers early access to fixed rate savings accounts without closure charges
  • Support for customers with unsecured debt through reduced payments or breathing space to defer payments due; these solutions are tailored to individual customer need
  • The option of a temporary increase in credit card and overdraft limits.

For business customers, the Bank has:

  • allocated £5bn to help businesses that need support*
  • asked relationship managers to proactively contact customers to see what help their businesses need
  • launched a helpline to support any customer queries

In addition, we will also consider:

  • Offering repayment holidays to free up cash within businesses
  • Reviewing overdrafts or trade loans to allow stock to be held for longer
  • Providing trade finance solutions to support customers with their supply chains.

Ian Stuart, HSBC’s UK chief executive, said:

We know that the finances of some customers will be affected by Covid-19, so we have created this range of support measures to help them through these uncertain times.

10:55AM

Gaming conference E3 reportedly cancelled

E3 

E3 is one of the world’s biggest tech and gaming conferences Credit: MIKE BLAKE/REUTERS

E3, the world’s largest trade show for the gaming industry, has reportedly cancelled its annual event due to coronavirus fears. 

My colleague Hasan Chowdhury reports:

Entertainment Software Association, a trade association for the sector, has hosted E3 every year since 1995. It serves as a platform for some of the world’s biggest gaming companies, to showcase new consoles or upcoming games.

Anticipation for this year’s event was climbing as details of new consoles from the likes of Microsoft were expected to emerge.  Sony, which is due to launch the PlayStation 5 this year, had already pulled out of the event.

A number of other prominent gaming conferences have been scrapped as virus fears spread across the US, including the Game Developers Conference that was due to be held next week. 

10:52AM

Merkel: European response must be coordinated

Angela Merkel

Angela Merkel said the German government will help companies with liquidity requirements Credit: Jason Alden/Bloomberg

Over in Germany, Chancellor Angela Merkel has been speaking on coronavirus. She has called for a coordinated response from European countries, and said the government will offer liquidity support to affected businesses this week.

She warned up to 70pc of the country’s population is likely to get the coronavirus at some point, adding until there is a cute the focus has to be on limiting the virus’s spread.

At a press conference in Germany, she said:

The process has to be focused on not overburdening the health system by slowing the virus’s spread… It’s about winning time

10:43AM

New York Auto Show delayed

New York Auto Show

The New York Auto Show is a major event in the industry calendar Credit: Mark Lennihan/AP

New York’s car show is the latest automotive industry event to succumb to coronavirus, following in the wake of the Geneva and Beijing shows.

Alan Tovey reports:

The New York Auto Show had been due to start on April 10 but has now been postponed until late August. Geneva’s car show was cancelled days before it was due to open on last week after the Swiss government banned events where more than 1,000 people congregate.

In February, the Beijing event set for China was pushed back, with no new date yet announced.   Organisers of the New York International Auto Show said the 10-day event pumps $330m in the local economy.

Mark Schienberg, president of the Greater New York Automobile Dealers Association, said:

We are taking this extraordinary step to help protect our attendees, exhibitors and all participants from the coronavirus.

For 120 years, ‘the show must go on’ has been heavily embedded in our DNA, and while the decision to move the show dates didn’t come easy, our top priority remains with the health and well-being of all those involved in this historic event.

10:38AM

Sunak: We have tools to fight economic disruption

Some remarks from Rishi Sunak have been read out at the Lobby briefing this morning. The chancellor reportedly said British companies will get help over the virus, and said the UK has the tools necessary to overcome any disruption causes by the virus. He said coronavirus is “front and centre in our minds”.

10:28AM

G4S plunges after impairment

G4S

G4S announced last month that it had sold most of its cash-handling business last month Credit: Tom Parker/OneRedEye

Security firm G4S has fallen into the red after taking a huge impairment on its cash business, which has been hit by the growth of alternative payment methods.

Our Industry Editor Alan Tovey reports;

Shares in the FTSE 250 company fell by almost a quarter to their lowest level since 2004 as it reported a £91m loss after taking a nearly £300m of writedowns, mainly on its UK Cash Solutions arm.

Ashley Almanza, chief executive, said G4S’s cash business continued to make a profit and the company believes “cash in the UK will continue to represent an important form of payment for the foreseeable future with G4S”. However, the “the rate of decline in cash volumes in the UK market” meant it had to be written down.

Last month G4S announced it had sold the majority of its conventional cash handling business, which has annual revenues of £600m, to The Brink’s Company in a £727m deal.  

Overall revenue at G4S rose 3.4pc to £7.76bn in year to the end of December.

10:22AM

Rory Stewart: The Budget should be announced online

Rory Stewart, the MP-turned-London-mayoral-candidate tweets: 

10:19AM

Prudential announces float plan

Prudential 

Prudential hopes the split will fund efforts to diversify its products in the US Credit: Simon Dawson/REUTERS

Prudential is preparing to sell a minority stake in its US business through a stock market listing. 

My colleague Michael O’Dwyer reports:

The 172-year-old insurer said it has begun preparations to float part of Jackson , which sells annuities in the US. 

It hopes the split will fund efforts to diversify its products in the US over the next decade. 

The move was announced after Third Point, an aggressive New York hedge fund led by corporate raider Dan Loeb, revealed last month that it had built a near-5pc stake in Prudential. It demanded management ditch its London headquarters and separate Jackson from the Pru’s high-growth Asian operations.

10:13AM

Lagarde: Eurozone faces repeat of financial crisis

Christine Lagarde

Christine Lagarde Credit:  STEPHANIE LECOCQ/EPA-EFE/REX

Here’s more on the Christine Lagarde comments I mentioned earlier, from my colleague Lizzy Burden:

The head of the European Central Bank has warned that the eurozone faces a repeat of the 2008 financial crisis unless leaders respond immediately to the coronavirus outbreak.

Christine Lagarde told EU leaders on a conference call on Tuesday that ECB policymakers were looking at all tools, but without a co-ordinated response member states risk “the collapse of part of your economies”.

The ECB is expected to follow the Bank of England – which cut interest rates by 50 basis points to a record low of 0.25pc today – and the US Federal Reserve – which last week slashed rates from about 1.75pc to just below 1.25pc – with its own rate cut and an expansion of quantitative easing.  A decision is expected by conference call tomorrow.

Economists at HSBC said a recession in the eurozone now appeared “unavoidable” in the first half of the year. They predict output will fall by 0.4pc in the first three months and decline by 1pc in the following quarter.

10:03AM

UK economy stagnant – did we miss the ‘Boris bounce’?

From my colleague Tom Rees:

The UK economy was already stalling before the coronavirus struck the global economy, fresh growth data indicated today.

GDP was unexpectedly flat in January compared to the previous month, weighed down by a 0.1pc monthly fall in industrial output, the Office for National Statistics revealed.

The figures suggest the economy did not enjoy a “Boris bounce” at the start of the year despite early business surveys pointing to a rebound following the Conservatives’ election victory. That slowdown will add to mounting worries for the economy as analysts warn the virus outbreak could tip the world into recession.

The services sector, the largest part of the economy, lost momentum after a stronger December while construction suffered a shock 0.8pc contraction. Growth in the three months to January was also zero compared to the previous three months.

9:56AM

That’s a wrap!

Mark Carney has finished up his final (right?) press conference. I’ll wrap the details up shortly, but first let’s get some more details on a couple of other big stories from this morning.

9:53AM

Carney: We’re in a ‘different place’ to 2008

Q: How important is coordinated action?

Asked about internal coordinated action, Mark Carney says the world is in a different place now compared to 2008. Then, he says, a cut was needed just to “get to the weekend”, but says things are different now.

He has spoken about the need for targeted fiscal policy, which is unusual for the Bank of England to specify. However, given Mr Carney has already said that the Bank is working closely with the Treasury, it’s likely he feel confident that complementary policy is already on its way.

The second question is again inaudible (economics reporters, point the mic towards your mouth!). Mr Carney repeats earlier comments about the buffer space.

Q: Why should the public trust banks to behave?

Mr Carney says the public “expects the authorities to act” in a situation like this. He says the Banks have been given “certainty” over conditions for the coming years, and says the Government will do “other things that are targeted” today.

Mr Bailey, putting his Financial Conduct Authority hat on, says the system is now “much more resilient” and adds that there is “no excuse” for banks treating customers poorly.

Q: How effective is ‘term funding’?

Mr Carney says ‘term funding’ – the Bank supplying largely small business lending to ease the shock – was effective and popular when it was last employed during the financial crisis.

He says once again that there are two paths – a “do-nothing path… low road” of letting the coronavirus shock hit businesses hard, but the Bank keeping its powder dry, or a “high road” in which Threadneedle Street intervenes to to soften the blow. Mr Carney says the Bank is obviously choosing the latter.

The pound has been climbing during Mr Carney and Mr Bailey’s answers:

9:40AM

Fiat closes plants

Just in, from my colleague Alan Tovey:

Fiat Chrysler Automobiles (FCA) has said it could temporarily shut its Italian plants to help the country’s fight against coronavirus.

To support measures brought in by the Government to help prevent spread of the disease, the car maker said it is lowering daily production rares to “enable greater spacing of employees at their workstations”. “Intensive sanitisation” of all work and rest areas, including changing and washrooms has already been introduced and the number of people being allowed in company cafeterias is also being controlled.

Since February, home working is being encouraged where possible.  FCA has 16 production facilities in Italy, producing cars and engines for all the company’s marques, which include Fiat, Alfa Romeo and Jeep.

Fiat 

Fiat could close its factories Credit: Gene J. Puskar/AP
9:39AM

How do they do it?

Q: What indicators will the MPC be following?

Mr Bailey (who will be governor then next time the Monetary Policy Committee meets), says policymakers will be looking at how firms are working through stock levels as a measure of they are getting along.

He says that at the March 26th meeting, the Bank’s analysis – note, not a forecast – may change.

Q: What happens if we have a no-deal Brexit? Have we just used our ammunition?

Mr Carney said in the “extreme scenario” of a cliff-edge Brexit, the supply and demand impacts are likely to be longer-lasting than those the bank foresees occurring as a result of coronavirus. He says the outbreak is a case of “destruction not disruption”.

The governor says there is “additional policy space” if needed, and adds once more than the MPC has multiple tools to provide stimulus if needed.

Q: What do you say to savers (who face record low interest rates)?

Mr Carney says “we all want to get through this”, adding ensuring businesses continue operating throughout will have a crucial impact.

9:32AM

No coronavirus cases at Bank

Q: Does anyone at the Bank have coronavirus?

Mr Carney says no, but that it is operating “critical functions” across three different sites and ensuring its has team setups to avoid disruption.

Q: How big is today’s stimulus in terms of GDP?

Mr Carney says its is equivalent to more than 1pc. He says the package needs to be thought of in terms of what would happen if the Bank did not act, alluding to the damage that could be caused to small companies if they are left without support.

Mr Bailey adds that small firms are still dealing with some of the “more painful” aftershocks of the previous financial crisis, and says the Bank does not want to see a repeat of those problems.

Q: Will we see measures such as isolating cities or industries in the UK?

Mr Carney says the medical strategy is ultimately a decision for the Government, but says the Bank has worked with medical experts to understand the different strategies that could be implemented to prevent the outbreak’s spread. He says that there is no forecast of what will happen, but that the Bank has done its research on what the “knock-on” effects could be.

9:27AM

Carney: Coronavirus ‘will pass’

Q: What if this lasts longer than you think? And will there be a recession?

Mr Carney says he is confident that coronavirus will pass, but says “it is too early” to judge what the scale and length of the impact will be. He emphasises once more than the Bank sees the impact of coronavirus at “temporary”. He won’t comment on whether a recession is likely.

Q: Why not cut to 0.1pc?

Again, Mr Carney says this is a “big package”, saying fiscal measures are also coming – he says the Bank has “direct line of sight” on the relevant sections of the Budget. He says decisions will be taken “at the appropriate time”.

Q: Could this be as bad as 2008?

Following comments from Christine Lagarde earlier this morning, in which the European Central Bank President said the coronavirus crisis could be as bad as the financial crisis of 2008, Mr Carney says today’s problems are markedly different. He says while today we have a problem of public health and supply/demand, back in 2008 the problem was with the financial system itself.

9:19AM

Q&A

I couldn’t hear the first question due to a mic issue over at Threadneedle Street. In his answer, however, Mark Carney has said there are “very early signs” of the impact coronavirus is having on the economy, adding that there have been reports from its economic scouts of a “sharp fall” in conditions, particular in sectors such retail.

He says the direction of travel is clear, but the magnitude of the outbreak’s impact is not yet apparent. The governor once again emphasises that the shock is likely to be temporary.

Q: Does the Bank plan further easing through quantitative easing? Are further cuts likely?

Mr Carney says asset purchases could be a mean of providing extra stimulus, but says today’s announcement is a “big package”, claiming the cut to the counter-cyclical buffer unleashes about £200bn of corporate credit.

He repeats the Bank will take “all necessary further actions” needed.

Mr Bailey echoes Mr Carney’s words, but notes that the Monetary Policy Committee is still set to meet later this month – so further changes could occur then.

9:13AM

Carney: BoE will take any necessary steps

Mr Carney says the Bank of England will take “all necessary steps” to ensure the UK can weather the coronavirus crisis. He says the response today is a testament to the preparation and contingency measures put in place after the financial crisis, more than a decade ago. 

Question time!

9:12AM

Bailey: Counter-cyclical buffer will be flat for a year

Mr Bailey is speaking now – he’s retailing the reduction in the counter-cyclical buffer (the requirement that banks build up a contingency cash buffer when the economy is growing) to 0pc, saying the rate is not expected to be increased again for “at least 12 months”. That should unlock a significant amount of lending, the incoming governor says.

He said the impact of coronavirus will be “sharp and large but it should be temporary”.

Mr Bailey says the Bank of England has stepped up its reporting and monitoring efforts, but says lenders are well-prepared for a potential downturn, with over £1 trillion in liquid funds to act as a buffer.

9:07AM

Carney: Measures will ‘keep firms in business’

Mark Carney says that the Bank of England is aiming to “maximise the effectiveness” of its response by acting in coordination with the Treasury.

He notes decisions were taken across all of Threadneedle Street’s policy committee, with Mr Bailey’s knowledge and with full unanimity.

The Governor said:

Activity is likely to weaken materially in the UK over the coming months [with] temporary but significant interruptions to supply chains

He said issues would be “most acute” for smaller businesses, and warned the coronavirus will hit both supply and demand.

Noting that banks and building societies may face difficulties passing on a rate cut, he said the Bank’s term-funding scheme for small businesses (TFSME), which will offer short-term lending at rates close to interest rates. His says this could result in lending “in excess of £100bn”.

Mr Carney said small companies usually “bear the brunt” during downturns.

9:02AM

Bank of England holds press conference

The Bank of England has started a  press conference, with both Governor Mark Carney and his successor Andrew Bailey present. Follow live:

8:57AM

All about the timings

Here’s an approximate breakdown of what’s happening today, based on previous Budgets.

Treasury officials will have been holding a big breakfast this morning, but the document itself will already be set in stone, after a final run-through yesterday.

Journalists are being briefed on the details of the Chancellor’s plans this morning. This is likely produce a Standard splash for around 11am.

At 11:45am, the Chancellor and other Treasury officials will depart for Parliament. This is when we get the classic red box shoot.

From 12:30pm, Mr Sunak will stand up in the Commons and lay out the Budget. As ever, this process may be far from smooth – expect some raucous interruptions from both sides of the aisle.

At around 3pm, Office for Budget Responsibility chief Robert Chote will offer his first take on the Budget.

8:37AM

As is Standard…

One extra bit of pre-Budget coverage to keep an eye out for is the front cover of the Evening Standard. The London freesheet – edited by one of Mr Sunak’s predecessors, George Osborne – is typically briefed on one of the big upcoming announcements in time for its mid-morning first edition.

8:34AM

What is expected from today’s Budget?

Plenty of today’s Budget will remain shrouded in mystery until Rishi Sunak reveals it in the Commons today – so expect the usual mix of surprise giveaways.

The Treasury has been heavily briefing reporters overnight, however, with talks of a £600bn infrastructure spending spree.

As our Economics Editor Russell Lynch reports:

Chancellor Rishi Sunak will today seek to shore up the confidence of UK businesses wracked by the coronavirus crisis with a massive £600bn infrastructure spending spree.

Mr Sunak – delivering the UK’s first Budget since October 2018 under the shadow of the worsening outbreak – is set to push public investment to its highest real-terms level since 1955.

The Budget will deliver a major boost to an economy already facing its weakest year of growth since 2009 under Boris Johnson’s plans to “level up” the UK – with fears forecasts will be downgraded again due to Covid-19.

That announcement isn’t entirely new – in fact, much of the money in that £600bn has already been pledged one way or another. Nonetheless, we’re seeing strong performances on the FTSE this morning for infrastructure-related groups.

Here’s a good thread on the topic by Sky’s Ed Conway:

 Here’s how various papers have covered the plans. The Financial Times says Mr Sunak will signal the “end of austerity”, with the biggest boost to public borrowing in 30 years.

 The Guardian says the spending plans will shore up the NHS:

While The Times reports fixing potholes is on the agenda:

8:23AM

Full report: Interest rates slashed

My colleague Simon Foy has a developing report on the Bank of England’s emergency rate cut this morning. He writes:

The Bank’s Monetary Policy Committee voted unanimously to cut rates by half a percentage point to a record low of 0.25pc.

The Bank said: “The reduction in Bank Rate will help to support business and consumer confidence at a difficult time, to bolster the cash flows of businesses and households, and to reduce the cost, and to improve the availability, of finance.

“Although the magnitude of the economic shock from Covid-19 is highly uncertain, activity is likely to weaken materially in the United Kingdom over the coming months.”

The Bank said it would also relax capital rules to free up billions pounds of extra lending power to support the economy.

It also introduced a new term funding scheme for small businesses. It will offer four-year funding over the next 12 months.

8:14AM

Rain on my parade

It’s a massive day for the Chancellor, but there’s already been a shadow cast over the Budget. Last night, it came to light that health minister Nadine Dorries has caught the coronavirus, and is self-isolating.

The MP has had the condition for around a week, according to reports this morning – which raises the possibility that contagion may have spread further in Parliament – or even into Number 10.

8:09AM

FTSE jumps, pound flat

The FTSE 100 has soared at the open, jumping more than 2pc after the Bank of England’s emergency rate cut. Low interest rates tend to encourage borrowing, which encourages spending, which is usually good for equities. 

Bloomberg TV

Credit: Bloomberg TV
8:06AM

Agenda: If you’re just joining us

Rishi Sunak

Chancellor Rishi Sunak will unveil his first-ever Budget today

Good morning… it’s Budget Day! Chancellor Rishi Sunak will be delivering the UK’s first Budget since October 2018 under the shadow of the worsening coronavirus outbreak.

Mr Sunak will present his spending plans to the Commons at 12:30pm. We’ll bring you the latest announcements and reaction, as well as keeping you up to date on our usual mix of business, economics and markets news.

Here’s your agenda…

5 things to start your day

1) A brief history of emergency Budgets: Many Chancellors – notably George Osborne – have thrown around the word “emergency” to describe their Budgets when they were nothing of the sort. But now Sunak joins the ranks of Alistair Darling, Dennis Healey, Sir John Simon and Philip Snowdon. Will he take any lessons from them? 

2) Saudi Arabia went in search of a definitive blow in the first round of its heavyweight showdown with Russia on Tuesday, announcing it would drastically ramp up oil output. The kingdom’s state-controlled oil titan Saudi Aramco said it would increase production to 12.3 million barrels per day (bpd) in April, a record amount.

3) Top City finance workers warned to stop stealing office lavatory roll: At least 120 rolls of paper have “gone missing” already this week at the Walbrook building in Cannon Street – home to firms including money manager Vanguard, payments business Worldpay and broker Gallagher Insurance.

4) Policymakers at the European Central Bank (ECB) could be forced to back an interest cut by conference call on Thursday as the coronavirus threatens to bring the financial world to a halt.

5) NMC Health uncovers $2.7bn of secret loans: The FTSE 100 hospital operator, whose shares are suspended from trading after a raft of secret loan guarantees were uncovered, said on Monday that some of the newly disclosed loans may not have been used for company purposes. 

What happened overnight

Asian markets were mixed this morning, but there were few drops – a sign of some much much-needed stability. Hong Kong and Singapore each edged up 0.1pc, Shanghai added 0.4pc and Manila rallied more than 2pc. Wellington and Taipei were also up. However, Tokyo ended the morning 0.8pc lower, while Sydney slipped 1.9pc and Seoul dropped 1.3pc.

Coming up today

Interim results: Kin & Carta

Full-year results: Balfour Beatty, Breedon, Costain, FDM Group, IP Group, Lookers, Pharos Energy, Prudential, Quilter

Preliminary results: Advanced Medical Solutions, Aptitude Software, Dignity, G4S, Spirax-Sarco Engineering

Economics: Budget, GDP, trade balance (UK), inflation (US)

7:58AM

European stock futures lift more than FTSE 100

With the Bank of England’s cut making it all-but-guaranteed that the European Central Bank will slash rates tomorrow, European stock futures are pushing up as much at the FTSE’s. There’s not a mega jump on the cards though – trading suggests London’s blue-chip index will rise about 0.7pc at the open.

7:50AM

Will Bank help revert a recession?

We had been expecting some concerted efforts by the Bank and the Treasury to tackle coronavirus harmful impact on the economy. But will it be enough?

Anna Stupnytska of Fidelity International says:

The cut comes earlier than expected – a few hours before the new Chancellor Rishi Sunak is scheduled to unveil his first budget which is likely to focus on fiscal measures aimed at helping the economy navigate the shock.

While the action from the BoE and the Treasury on the same day signals the policymakers’ preparedness to respond, the high degree of uncertainty around the extent of the coronavirus spread and its economic impact makes it difficult to gauge whether the new policy measures are going to be sufficient to avert a recession this year.

7:40AM

FTSE tipped to open higher

Last week markets reacted sourly to the US Fed’s emergency interest rate cut, which appeared to dent, rather than shore up, confidence. Will the same thing happen today?

The Bank’s shock rate cut sent FTSE 100 futures surging 0.9pc, but that appears to have come back. So far the FTSE is tipped open up just 0.2pc, with most other European markets expected to be in the green. 

Asian markets have fallen overnight on continued fears over coronavirus. Markets had been recovering from a brutal global selloff on Monday, but growing scepticism about Washington’s stimulus package to fight coronavirus knocked some steam out of the rally.

7:37AM

Tricky timing

Our economics reporter Tom Rees notes the timing of this move is all the more difficult because it’s Mark Carney’s last week as Governor before handing over to Andrew Bailey. He writes:

Last week Mark Carney and incoming Governor Andrew Bailey both stressed the need for a co-ordinated response to the economic threat posed by the coronavirus.

During the financial crisis the world’s top central banks took action on the same day to shore up markets and the economy but this time the Bank is co-ordinating its stimulus efforts with the Treasury.

The timing of the Bank’s action has been complicated by the handover of the top job on Threadneedle Street.

Mr Carney is in his final week in the job but with the coronavirus crisis escalating rapidly and countries being forced to impose draconian measures to stem the outbreak it could not wait until the scheduled rate-setting meeting on March 26.

Mr Bailey is on the Bank’s Financial Stability Committee and must have been kept informed of the risk that Mr Carney would need to use up most of its ammunition the week before he begins the job.

Andrew Bailey 

Andrew Bailey is set to take the reins at the Bank later this week Credit: Simon Dawson/Bloomberg 
7:28AM

‘Big bazooka’

Why is the Bank of England launching these measures now?

Here’s the Telegraph’s Deputy Economics Editor Tim Wallace:

This bumper package is clearly designed to be a ‘big bazooka’ against the economic effects of the coronavirus, fired on the same day as the Budget for maximum shock and awe.

Financial markets were reeling and businesses suffering the effects of import shortages, slumping global demand and potential loss of workforce to sickness or isolation measures. 

Yet they still have fixed costs to pay, including taxes, wages and debt interest payments. 

The Bank of England has stepped in to cut the last of those – lower interest rates combined with the term funding scheme should force lower borrowing costs into the system rapidly.

It should also help with demand, giving shoppers more spending power, which could be effective as most people are not yet isolating or avoiding the shops. 

By cutting the countercyclical capital buffer gives banks more firepower to lend and is a clear signal the regulator expects them to do so, rather than cutting back in the face of a slump. It is designed to make sure lending is still available to support the economy – instead of drying up and making this crisis worse. 

7:23AM

‘Sharp and large impact from Covid-19’

As part of its package of measures, the Bank has loosened some of the restrictions on banks to allow them to lend more to businesses. It reckons this should free up an extra £190bn of credit to the economy.

Heres more from the Bank:

Although the disruption arising from Covid-19 could be sharp and large, it should be temporary. Such economic disruption should have less of an impact on the core banking system than recent stress tests run by the Bank have shown the system can withstand. Those stress tests demonstrated that banks would be able to continue to lend to businesses and households even while absorbing the effects of substantial, prolonged economic downturns in both the UK and the global economies, as well as falls in asset prices much larger than experienced in recent weeks.

Given the resilience of the core banking system, businesses and households should be able to rely on banks to meet their need for credit to bridge through a period of economic disruption.

7:17AM

‘Comprehensive and timely package’ to tackle Covid-19

Here’s what the Bank has to say about its shock rate cut:

The Bank’s three policy committees are today announcing a comprehensive and timely package of measures to help UK businesses and households bridge across the economic disruption that is likely to be associated with Covid-19. These measures will help to keep firms in business and people in jobs and help prevent a temporary disruption from causing longer-lasting economic harm.

Following the spread of Covid-19, risky asset and commodity prices have fallen sharply, and government bond yields reached all-time lows, consistent with a marked deterioration in risk appetite and in the outlooks for global and UK growth. Indicators of financial market uncertainty have reached extreme levels.

Although the magnitude of the economic shock from Covid-19 is highly uncertain, activity is likely to weaken materially in the United Kingdom over the coming months. Temporary, but significant, disruptions to supply chains and weaker activity could challenge cash flows and increase demand for short-term credit from households and for working capital from companies. Such issues are likely to be most acute for smaller businesses. This economic shock will affect both demand and supply in the economy.

7:11AM

Emergency measures to tackle coronavirus

The Bank of England cut interest rates on Wednesday to bolster Britain’s economy against disruption caused by the coronavirus outbreak.

Members of the BoE’s Monetary Policy Committee voted to cut Bank Rate for the first time since August 2016, to 0.25pc from 0.75pc, the central bank said in a statement.

The BoE maintained its target for government bond purchases to £435bn. It also maintained its corporate bond purchase target to £10bn.

The BoE also introduced a new term funding scheme for small businesses. It will offer four-year funding over the next 12 months

Carney

This rate cut could be the last major action as Bank governor for Mark Carney Credit: Peter Nicholls/REUTERS
7:08AM

Bank of England cuts interest rates

BREAKING: The Bank of England has cut interest rates to 0.25pc to help the economy tackle coronavirus.