Deliveroo revealed a 110% increase in orders across the UK and Ireland compared with the first half of 2020. The food-delivery giant has also announced that it now offers takeaways more UK restaurants than any of its rival services. 

In recent months, Deliveroo has signed up 10,000 new sites and has increased its base by approximately 30% amid a committed push to up its restaurant recruitment. The company is also working to grow its network of on-demand grocery delivery providers as the Covid-19 pandemic has seen a substantial shift in consumer behaviour, with more people now wanting to purchase groceries online for home delivery. 

During the peak of the pandemic, demand for food delivery services boomed as restaurants, pubs, and cafes were forced to close their doors. It was feared that this demand would diminish as these businesses reopened, but so far, this has not been the case. In the second quarter of 2021, Deliveroo’s consumer base reached 7.8 million monthly consumers on average, compared to 3.7 million in the first quarter of 2020. 

Deliveroo’s CEO and founder Will Shu said that although consumer behaviour may moderate as the year continues, the company remains “excited about the opportunity ahead.”

The Chancellor of the Exchequer has written to Prime Minister Boris Johnson warning of the impact that the UK’s strict border controls is having on the country’s economic recovery. 

Last month, England lifted the requirement for fully vaccinated citizens to complete the quarantine period when returning from medium-risk destinations. From 2 August, visitors from the EU and US with the same vaccine status will also be exempt from the quarantine period. However, travellers are still required to take costly tests before departure and soon after arrival. Sunak’s letter to the Prime Minister comes ahead of Thursday’s meeting of ministers to consider changes to the current coronavirus travel restrictions. However, many believe that the restrictions should remain in place to prevent a further increase in cases or the outbreak of a new variant. 

The latest figures from the Monthly Insolvency Statistics report registered that company insolvencies in May 2021 was 1,011, which was 7% higher than the number registered in the same month in the previous year (946 in May 2020).

We are seeing the impact of an activist government supporting businesses across two fronts – financial support and temporary suspension of pre-existing corporate insolvency and governance legislation. 

Insolvency protection extended
In a critical move the Corporate Insolvency and Governance Act 2020 (CIGA 2020), which received assent in June 2020, comprised of eight permanent and temporary measures intended to give struggling businesses a pandemic lifeline.

The Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2021 has extended key measures in different ways:

• The suspension of liability for wrongful trading has been extended until 30 June 2021 for directors who continue to trade a company through the pandemic with uncertainty as to whether their company may avoid future insolvency.
• The prohibition on termination clauses is also extended until 30 June 2021, although small suppliers will remain exempted from obligation to supply.
• The relaxation of entry requirements into new moratorium procedure is also extended, in this instance until 30 September 2021.
• The continuation of restrictions on statutory demands and winding-up petitions until 30 June 2021.

One key measure is continuing with temporary suspension of wrongful trading, which provided company directors with much-needed breathing space. However, on a more cautionary note, they must keep in mind all sources of risk and liability under the Insolvency Act 1986 are unaffected by the Act. For example, directors are still bound by fiduciary duties and fraudulent trading provisions of Section 213, facing sanctions and penalties if they knowingly attempt to defraud company or creditors.

In addition, directors have duties under the Companies Act 2006 and must continue to act and be mindful of the interests of creditors if the likelihood of insolvency increases.

If directors are worried their business is in or expecting financial difficulty, it is crucial that they continue to consider the needs of all key stakeholders and creditors in any decision and maintain ‘good housekeeping’ in the form of board meetings and keeping records of actions taken with an assessment of the reasons for certain decisions.

What does this extension mean?
Overall, temporary suspension of wrongful trading doesn’t change the attention directors should be giving when evaluating their company’s financial position. Directors’ actions will remain subject to scrutiny, making it critical they consider very cautiously whether to continue trading if there is no realistic chance of avoiding insolvency.

The initial extension provisions in relation to filing deadlines no longer applies. The Act had granted automatic extensions for filing deadlines between 27 June 2020 and 5 April 2021 to relieve burdens on companies during the pandemic, allowing them to focus all efforts on continued trading.

Landlords and commercial tenants

The Government has also published a consultation paper seeking responses and evidence from the property industry generally as to how negotiations between commercial landlords and tenants on rescheduling rent liabilities have been handled during lockdown.

The protective measures the Government introduced back in April 2020 were only ever meant to be temporary. This was a lifeline for many but now there is a significant risk for those who relied on this during the pandemic that once those protections are lifted – scheduled for June 2021 - businesses may fail when rent arrears are pursued.

It is hard to envisage the government allowing a cliff edge to come into view when it has spent so long over the past year seeking to protect embattled businesses.

Post-lockdown outlook 
Although easing of lockdown measures is accelerating and businesses are beginning to open, numerous challenges lay ahead, particularly with expected long-term reduction in consumer demand and confidence. Many company directors will likely face challenging decisions whether to continue trading or instigate insolvency processes soon.

There is also pent-up private equity demand and high levels of debt funding. This desire to deploy capital, combined with what we could term a ‘flight to quality’, mixed the optimism as a result of the vaccine programme, as well as near-record levels of corporate liquidity and a strong market for M&A, we could well see a positive market.

If directors are worried their business is in or expecting financial difficulty, it is crucial that they continue to consider the needs of all key stakeholders and creditors in any decision and maintain ‘good housekeeping’ in the form of board meetings and keeping records of actions taken with an assessment of the reasons for certain decisions. Where possible, they should also seek appropriate professional advice.

On Thursday, the British bank exceeded analysts’ expectations by reporting a pre-tax profit of £3.9 billion on a net income of £7.6 billion in the first half of 2021. Analysts had expected to see profits of £3.1 billion on revenues of £7.35 billion. 

In the first six months of 2020, the bank saw losses of £602 million as the UK endured the first wave of the coronavirus pandemic. Like other banks and lenders, Lloyds allowed billions as a buffer to cover a feared surge in bad debt linked to the coronavirus pandemic, but has since unlocked £837 million from the buffer as the situation in the UK appears to improve amid a successful vaccine rollout. This led to a net half-year gain of £656 million on provisions. 

The bank has raised its forecasts for the UK economy and has increased its guidance for performance in 2022, with Lloyds now expecting to deliver a return of equity of 10%. 

Lloyds is the biggest mortgage lender in the UK and has benefited significantly from the property market boom amplified by the stamp duty holiday. The bank reported June as the biggest month for mortgage completions as the end of the stamp duty holiday drove a surge in activity on the property market. So far this year, Lloyd’s has lent £9 billion to first-time buyers. Its mortgage book now stands at an impressive £12.6 billion. 

Apple saw $21.7 billion profit for the three-month period that ended in June, marking its best-ever fiscal third quarter. The company’s record-breaking performance was boosted by strong sales of the new iPhone 12.

Google’s parent company Alphabet has revealed second-quarter revenue of $61.8 billion and a profit exceeding $18.5 billion, a figure which stands at twice its profits for the same period last year. Google’s advertising revenues also rose 69% from last year.

Microsoft has also reported record-breaking revenues of over $46 billion for the quarter, a 21% rise compared to the same quarter last year.

As share prices have rocketed throughout the coronavirus pandemic, the collective market value of Apple, Google, Microsoft and social media giant Facebook, is now worth over a third of the entire S&P 500 index of America’s 500 largest traded companies. 

As increasing numbers of people are receiving alerts to stay at home by the NHS covid-19 app after coming into contact with an infected person, the petrol industry is calling for vaccinated workers to be exempt from self-isolation rules to avoid further disruption and profit losses. 

Across England and Wales, some 600,000 people were instructed to self-isolate last week as the Delta variant of the virus continues to tear through the country. This has impacted countless businesses across several sectors, from hospitality, to car manufacturers, to food production, and most recently petrol stations. 

BP, which already reported losses of $5.7 billion during the UK’s third lockdown, has said it is experiencing fuel supply issues due to a shortage of drivers across the entire industry. This has led to a handful of BP’s UK sites having to temporarily close. 

Freedom day was perhaps most highly anticipated by UK businesses, who have been hit hard by the coronavirus pandemic. During the start of the UK’s third lockdown, BP reported losses of $5.7 billion as demand for oil plummeted, and a report by Simply Business estimated that the pandemic will cost small UK businesses a whopping £126.6 billion. Yet, for many businesses, it appears that the impact of freedom day may actually be a negative one, as business owners are largely left to negotiate the challenges of the pandemic alone. 

The Return To The Office

As of July 19, the English government is no longer instructing people to work from home if they can, meaning freedom day marked the return to the office for many businesses. In the coming months, the move is likely to bring more footfall into city centre business, such as coffee shops and cafes, whose customer base is primarily office workers. These types of city centre businesses have been heavily disrupted by the shift to remote-based working. The World Coffee Portal's Project Café UK 2021 report revealed that the pandemic set sales in this sector back to 2013 levels. Almost £2 billion was wiped from the market value. 

However, with covid cases in the UK rapidly on the rise once again, the return to the office means reintroducing the risk of spreading the virus throughout the company. Peter Cheese, chief executive of the CIPD, the professional body for HR and people development, has urged employers to keep necessary safety measures in place to give workers confidence in the workplace. Cheese also said that businesses shouldn't automatically rush back to the old way of doing things, arguing that remote-working has a positive impact on employees health and well-being, inclusion, and productivity. 

Anxiety Amongst Businesses And Employees

A recent poll by Simply Business has revealed that, for many SMEs and the self-employed, the passing of freedom day generated mixed feelings. 53% of those polled said they believed that social distancing restrictions were being lifted too soon. As such, many small businesses up and down the country will keep masks and social distancing measures in place for the time being. However, as the government has now left mask-wearing to public discretion, it is likely that many businesses will encounter increased resistance from those that are opposed to masks, using up both the time and energy of staff members. 

The anxiety surrounding freedom day also extends to office workers. Research by Anxiety UK found that 18% of employees were anxious about the potential return to the office, with 24% stating they were happy with their new at-home work routines. Poor mental health reduces productivity within the workplace and is a major cause of sick leave. If staff members have anxiety around returning to the office, a decline in productivity, and thus company profits, is certainly a possibility for businesses who have chosen to return to the office post freedom day. 

Staff Shortages 

As covid cases continue to rise, “pingdemic” is yet another covid-related term that is entering into our vocabularies. A growing number of businesses across the UK, including supermarkets, pubs, and small retailers, are facing staff shortages that threaten their operations. Suffolk-based pub chain Greene King had to temporarily close 33 of its pubs last week due to the vast number of staff members required to self-isolate after coming into contact with someone who tested positive for the virus. Although the lockdown saw huge financial losses for businesses, the pingdemic is proving to have a similar effect for many. 

Commenting on the increasing issue of the pingdemic, Liam McNeill, vice president, EMEA at UKG, said: “The recently coined "pingdemic", where folks are notified of possible exposure from the NHS Covid-19 app and told to self-isolate, is causing yet another wave of workforce disruption. Short notice or unplanned absenteeism is a main challenge in almost any workforce and can be addressed and alleviated with a modern workforce management solution that can quickly identify the next available person with appropriate skills to fill a shift. However, as the unpredictable “pingdemic” grows, businesses large and small are grappling with swaths of their staff in quarantine and have had no choice but to temporarily close down as we’ve seen happen with Iceland and Greene King.” 

Final Thoughts

Some will undoubtedly be pleased to see the lifting of most covid restrictions in England, particularly businesses such as nightclubs which have been forced to close their doors since March last year. However, for many business owners, the final lifting of coronavirus restrictions already appears to be failing to deliver the relief that had long been hoped for. As the government passes the duty of infection control on to companies and the general public, many businesses may find that they struggle to plan their cause of action in the coming months.

Alpa Bhakta, CEO of Butterfield Mortgages Limited, explains why the appeal of England's capital is not be underestimated. 

Making such bold predictions about the lasting changes that will come about as a result of the Covid-19 crisis is problematic. Since early 2020, consumers and businesses have been confined in what they have been able to do due to health concerns, economic disruption and unprecedented levels of state-sanctioned social distancing measures. These have been truly unique circumstances, which means it is difficult to assert exactly how people will act when the threat from the virus abates. Returning to the initial point, then, I find the assertion that London is in the midst of a “mass exodus” hard to accept. 

The bigger picture

First and foremost, it would be wrong to assume there is a one-way direction of travel, with people and even businesses departing London. After all, people have left London in large numbers for decades. In fact, between 2009 and 2019, it is estimated that about 550,000 more Britons left London than moved to it. However, crucially, the population grew in this period thanks to both the higher birth rate within the Greater London area, and net migration to the city.

From families leaving London to find more spacious homes, to people retiring and looking for a quieter life outside of the city, there are many reasons that people would choose to leave. The rise of remote working, combined with the increased demand for properties that have gardens or spare rooms that can be home offices, might have contributed to more people considering life outside of London during the pandemic, but the numbers are not huge, nor is there nearly enough data suggest this will continue as Covid restrictions ease.

Hamptons’ data shows that London leavers purchased 73,950 homes outside the capital in 2020, which although slightly higher than the past four years, is not striking. The table above highlights that in spite of all that has been said, it was largely in keeping with annual averages.

The draw of being in London remains strong

In a recent interview, Tom Walker, a Schroders fund manager specialising in global cities, said: “The media is focussing on the people who are moving “away” from the city and not on those who are moving to the city, especially younger people.  “So far, the data is telling us that those that are moving away are not moving very far, only to the suburbs. People understand that they cannot be too far from the city, both from a professional and personal point of view.”

It is a view that certainly mirrors our experiences throughout the pandemic. Our existing clients are showing little sign of wanting to sell or leave the capital, while London’s prime property has remained in demand among both domestic and international buyers. Research by Astons, the international experts on real estate, residency and citizenship through investment, has underlined that London remains one of the prime global real estate markets. Meanwhile, figures from Benham and Reeves have found that buyer interest in London’s £2 million-and-above properties has risen throughout 2021. Such data is indicative of London’s lasting appeal, pandemic or no pandemic. There is a long list of reasons that it lures in people from around the globe.

For one, the city is a prominent centre for business and commerce. Neither the pandemic nor Brexit has undermined that fact. Indeed, it recently recovered its place as Europe’s leading trading hub, while the latest Global Financial Centres Index ranked London as the second-best financial centre, behind New York. It boasts several world-leading universities (four in the top 50). Add to this its transparent legal system and strong tradition of rule of law. Then, of course, there are the thousands of cultural sites and activities, as well as the hospitality and leisure venues on offer.

When all these pull factors are combined, it is hard to see an exodus of people from London. People will leave the city - they always have and always will - and the pandemic might result in a slight uptick in these numbers. But the appeal of the capital, well established for centuries, is going to remain for decades to come. 

Alpa Bhakta is the CEO of Butterfield Mortgages Limited. Part of Butterfield and a subsidiary of The Bank of N.T. Butterfield & Son Limited. Butterfield Mortgages Limited is a London-based prime property mortgage provider with a particular focus on the needs of UK and international HNWIs.

Chancellor of the Exchequer Rishi Sunak is expected to introduce cuts to UK public services of up £17 billion unless he takes action to increase funding in the coming weeks. The Institute for Fiscal Studies has said that, from April 2022, the UK government is on track to spend between £14 billion and £17 billion less each year across several different public services than had been proposed before the pandemic.  

The IFS has warned that there are growing demands on public finances that need to be addressed head-on amid Sunak’s preparations to allocate funding for government departments as covid cases across the country continue to rise. Just last week, Sunak was forced to push back the formal launch of the Treasury’s spending review due to having to self-isolate. The spending review process will now be delayed until later this summer when MPs return to the House of Commons come September. 

In a report that set out the economic backdrop for the chancellor’s spending review, the IFS said that Sunak was on track to be handed £30 billion by the Office for Budget Responsibility (OBR) for public finances this year as the UK experiences a much quicker recovery than initially expected. A budget deficit of £234 billion had been predicted by the Treasury watchdog this year, but the IFS, alongside US bank Citi economists, have said a shortfall closer to £203 billion is potentially more likely following the success of the vaccine roll-out. 

However, the think tank has still warned that the improvement was unlikely to continue. Like many countries across the globe, the UK is expected to suffer lasting economic damage from the pandemic. 

The Office for National Statistics said that the annual rate of inflation rose to 2.5% in June from 2.1% in May. June’s rate is the highest since August 2018, when inflation hit 2.7%. The jump has pushed inflation further above the Bank of England’s target of 2% and has provoked speculation that the UK’s central bank will need to respond soon to contain price pressures in the economy.

The UK is not alone in its increased rates of inflation. Several countries across the globe are currently experiencing steep increases in inflation as their economies recover from the coronavirus pandemic. On Tuesday, official figures revealed that the annual inflation in the US is running at its highest levels in 13 years. Around the world, central banks are hoping that the steep rise in inflation has been caused by temporary factors related to the pandemic, such as pent-up demand and supply pressures.[ymal]

The ONS said gross domestic product (GDP) contracted by 1.6% in the first quarter of the financial year. A decline of 1.5% has been previously estimated. This puts GDP at 8.8% below its pre-pandemic levels at the beginning of the year where initial estimates had been 8.7%. However, the contraction is still substantially lower than the 20% drop which was seen during the UK’s first lockdown in spring 2020.

Monthly figures also demonstrate an impressive recovery. In February and March, GDP bounced back despite the UK’s third lockdown still being in place at the time. In April, GDP jumped 2.3% higher. The Bank of England’s outgoing chief economist Andy Haldane commented that the economy was going “gangbusters”.

The most recent data from ONS shows that UK households dramatically cut their spending in the first quarter, putting cash into savings instead. The household saving ratio increased to 19.9% where, in the previous three months, this figure was at 16.1%. The figure is the second highest on record after the 25.9% seen in the second quarter of 2020.

The FTSE 100 (^FTSE) in London was down by 0.4% in noon trade, whilst the CAC (^FCHI) dropped 0.5% in France, and the DAX (^GDAXI) was 0.2% lower in Germany.

Covid-19 cases are up 59% in week-on-week figures, just seven days on from 21 June, the date on which all coronavirus restrictions across England were set to be lifted. However, the Delta variant of the virus, which was first detected in India and is understood to be more transmissible than previous strains, now makes up around 99% of reported covid-19 cases.

Sajid Javid, who was promoted to the role of UK health secretary following Matt Hanock’s recent resignation, will give an update later on when the final stage of England's roadmap out of lockdown can be safely implemented. Currently, 19 July is the anticipated date for England’s new “freedom day”. However, the prime minister has said that there will be a data review to judge whether the final stage of unlocking could happen two weeks earlier on 5 July.