UK economy shrinks

Get straight to the good stuff every day with the Multiply Minute; a lightning-quick round-up of the money news and how it affects you.

Downturn begins

The figures are in: GDP shrank by 2% in the first three months of 2020. The drop is the worst we’ve seen since the 2008 recession, although it wasn’t as steep as some experts feared it might be. Lockdown only started at the end of March, meaning this decline was caused by less than two weeks of the new normal.

Furlough will continue

Workers who’ve been furloughed will continue to have up to 80% of their wages covered by the government until October. Chancellor Rishi Sunak confirmed yesterday that the job retention scheme will remain in place, but that companies will be asked to “share the cost” from August. Currently 7.5 million people are covered by the scheme.

You can move house

Buyers, sellers, and renters in England will now be able to move, as the government eases restrictions on the housing market. Good news for the estimated 373,000 home sales which were on pause during lockdown. Estate and lettings agents have opened their doors again, and viewings are allowed as long as people practice social distancing. The rules in Scotland, Wales, and Northern Ireland remain in place.

Self-employed scheme opens

Self-employed people can apply for the government’s coronavirus support package from today - earlier than previously expected. Anyone who earns more than half of their income from self-employment and has half yearly profits of less than £50,000 is eligible, and can get paid up to £7,500 as a lump sum for three months’ income. The first payments are expected to arrive on 25th May.

More stimulus on the way?

The Bank of England could increase its support for the economy to prevent the downturn from getting worse. The Bank has already announced £645 billion in quantitative easing (where the central bank prints digital money to buy government bonds) and has cut interest rates to a record low of 0.1%.

Big Mac is back

McDonald’s has said it’s reopening 30 of its restaurants for drive-through from next Wednesday. It hasn’t yet revealed which lucky towns will see the golden arches light up once more, but the rest of us won’t have long to wait; they’ll all be open for drive-through by early June.