The U.K. economy grew by 15.5% in the third quarter, according to preliminary figures published Thursday, as it begins to rebound from a sharp downturn.
Economists polled by Reuters had expected a 15.8% quarter-on-quarter expansion in GDP (gross domestic product) in the three months to September. It comes after an unprecedented 19.8% plunge in the previous quarter as nationwide lockdown measures crippled activity.
The third-quarter bounce marks the U.K.’s sharpest quarterly expansion since records began in 1955, but GDP is still 9.7% below where it was at the end of 2019, the Office for National Statistics said Thursday. Compared with the third quarter of last year, GDP fell 9.6%.
Monthly growth slowed throughout the third quarter. GDP expanded by 6.3% in July, slowing to 2.2% in August and 1.1% in September, when it was driven by the professional, scientific and technical industries, according to the ONS.
However, with England now in a month-long partial lockdown until at least December 2 amid a resurgence in coronavirus cases, the recovery is expected to lose steam in the final three months of the year.
The deadline for the U.K. and the EU to reach an agreement on their post-Brexit trading relationship is also rapidly approaching, with a “no-deal” scenario at the end of the year widely expected to cause further economic disruption.
‘Keep the champagne on ice for now’
U.K. Finance Minister Rishi Sunak recently announced the extension of the country’s furlough scheme until the end of March in a bid to ward off a sudden spike in unemployment, while the Bank of England expanded its target stock of asset purchases to £895 billion ($1.2 trillion). The central bank estimates an 11% contraction over the course of the year.
“A strong rebound in the economy is clearly positive, but we should keep the champagne on ice for now,” said Laith Khalaf, financial analyst at investment platform AJ Bell.
“The summer boom was turbo-charged by the Eat Out to Help Out scheme, while the furlough scheme worked its magic by keeping unemployment under wraps.”
Khalaf suggested the real “litmus test” will be how quickly the economy can return to pre-pandemic levels, and although news of Pfizer’s vaccine breakthrough has offered hope to businesses, a rise in unemployment and insolvencies is still likely over the winter. Failed Brexit negotiations could also give the economy an “unhelpful shove in the wrong direction,” he added.
James Smith, developed markets economist at ING, said the third-quarter figure was “probably as good as it gets for the time being.”
“We are likely to see a modest fall in GDP during October, reflecting the introduction of ‘tiered restrictions’ in England (which will have acted as a further drag on hospitality) and a local lockdown in Wales,” he said.
“However, the decline will be amplified in November, where we estimate we’re likely to see a 6-7% slide in monthly GDP on the month-long English lockdown. This will also result in a negative figure for Q4 as a whole.”
Source: – CNBC
China’s Li Sees Economy Returning to ‘Proper’ Range Next Year – Yahoo Canada Finance
The Canadian Press
NEW YORK — Best Buy Co. reported fiscal third-quarter results that blew through analysts’ expectations as the nation’s largest consumer electronics retailer enjoyed surging demand for items like home theatre and appliances that help people learn, cook, work and connect in their homes during the pandemic.
The Richfield, Minnesota-based retailer, said that third-quarter profits rose 33% while sales were up 21%. Sales at stores opened at least a year rose 23%, while online sales in the U.S. surged 174%.
Still, shares fell 5% in Tuesday morning trading as Best Buy warned that sales could slow down during the current quarter as the number of virus cases surge.
“As we start the fourth quarter, the demand for the products and services we sell remains at elevated levels, but similar to last quarter, it continues to be difficult for us to predict how sustainable these trends will be,” Matthew Bilunas, Best Buy’s chief financial officer, told analysts during the call. “In fact, we are seeing COVID cases surge throughout the U.S. and Canada at a time of significant holiday volume through our stores, online and supply chain. “
Bilunas also noted other factors such as potential government stimulus, the risk of continued high employment and the availability of inventory like computers to match customer demand.
Best Buy joins big box stores like Walmart, Target, Home Depot and Lowe’s in reporting strong fiscal results. Unlike mall-based stores and other businesses that sell non-essentials, big box retailers were allowed to stay open during the lockdown in the spring and have all seen their dominance increase as consumers focus on necessities and home-related activities.
Before the pandemic, Best Buy had expanded its services to such options as at-home consulting and same-day delivery. It also sped up its online shipping. But the pandemic has forced Best Buy to adjust its operations and launch new shopping experiences that provide more convenience and safety for customers.
Early fall, Best Buy began using 250 of its stores as fast-shipping hubs for online orders. It’s now adding 90 more locations during the holiday period. It says its goal is to have all 340 stores ship more than 70% of its ship-from-store units during the holiday quarter. It’s also testing new store formats as it transforms locations to fulfilment hubs.
For example, in four Minneapolis locations, Best Buy reduced its square footage for shopping to 15,000 square feet from an average of 27,000. The product assortment on the sales floor will still include the primary categories these locations featured before the remodel, but instead the focus will be on the most popular items, the retailer said. The remodels will result in increased space for staging product for in-store pickup and to help ship-from-store transactions, as well as provide the ability to stage inventory for items that may not be on the sales floor.
Best Buy reported fiscal third-quarter profit of $391 million, or $1.48 per share, compared with $293 million, or $1.10 per share, in the year-ago period. Earnings, adjusted for restructuring costs and amortization costs, were $2.06 per share.
The results exceeded Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of $1.76 per share.
The consumer electronics retailer posted revenue of $11.85 billion in the period, also beating Street forecasts. Eight analysts surveyed by Zacks expected $11.02 billion.
Shares fell $6.69 to $1150 in late morning trading. Shares have increased 39% since the beginning of the year, while the S&P 500 index has increased 11%. The stock has increased 69% in the last 12 months.
Elements of this story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on BBY at https://www.zacks.com/ap/BBY
Anne D’Innocenzio, The Associated Press
German economy grew by 8.5% in third quarter, but recession fears grow – The Guardian
BERLIN (Reuters) – Germany’s gross domestic product grew by a record 8.5% in the third quarter as Europe’s largest economy partly recovered from an unprecedented plunge caused by the first wave of the COVID-19 pandemic in spring, the statistics office said on Tuesday.
The stronger-than expected rebound was mainly driven by higher household spending and soaring exports, the office said.
“This enabled the German economy to make up for a large part of the massive decline in gross domestic product caused by the coronavirus pandemic in the second quarter of 2020,” it added.
The reading marked an upward revision to an earlier flash estimate of 8.2% growth, and followed a 9.8% plunge in the second quarter.
The outlook is clouded by a second wave of coronavirus infections and a partial lockdown to slow the spread of the disease. Restaurants, bars, hotels and entertainment venues have been closed since Nov. 2, but shops and schools remain open.
Chancellor Angela Merkel and regional state premiers are planning to extend the “lockdown-light” on Wednesday until Dec. 20, according to a draft prepared for their meeting.
A contraction in the service sector is expected to weigh heavily on gross domestic product in the fourth quarter, while lockdown measures in other countries are likely to hit export-oriented manufacturers as well.
DIW economist Claus Michelsen said a decline in economic output was therefore on the cards, with initial estimates indicating a GDP drop of around 1% in the final quarter.
“Germany and many important trading partners are likely to slide back into recession,” Michelsen said.
(Reporting by Michael Nienaber and Rene Wagner; Editing by Riham Alkousaa and EKevin Liffey)
No-deal Brexit would be worse for the UK economy than Covid-19, says Bank of England governor – CNN
Dow hits 30000 on Biden transition, stimulus odds – BNN
Black Friday wireless earbuds deals – The Verge
China launches mission to bring back material from moon – World News – Castanet.net
Silver investment demand jumped 12% in 2019
Iran anticipates renewed protests amid social media shutdown
Galaxy M31 July 2020 security update brings Glance, a content-driven lockscreen wallpaper service
- Art15 hours ago
The Art of Building the Impossible – The New Yorker
- Science19 hours ago
Utah monolith mystery: Wildlife officials' 12-ft desert discovery – Daily Mail
- Science17 hours ago
A 2020 space oddity? Mysterious metal object found in Utah desert – Global News
- Tech10 hours ago
Black Friday Sony TV Deals (2020): 60 Inch, 65 Inch & 75 Inch Sony 4K TV Deals Reviewed by Deal Tomato – GlobeNewswire
- Science20 hours ago
A 2020 space oddity? Mysterious metal object found in Utah desert – cjoy.com
- Politics23 hours ago
The fraught politics facing Biden’s foreign policy
- Media20 hours ago
Social media 'out of control,' says Norfolk mayor – The Sudbury Star
- Tech16 hours ago
Best Black Friday 65 Inch 4K TV Deals 2020: Samsung, LG, TCL & More 4K TV Savings Ranked by Consumer Walk – GlobeNewswire