9TH APRIL 2020
From initial testing of the unknown Coronavirus to the widespread orders of isolation & quarantine, families and people's livelihoods have certainly been impacted. In the UK, that impact was felt after the nationwide lockdown order on March 23rd by Prime Minister Boris Johnson. With many forced to work from home or sent home on furlough, the financial future is unknown. This can also be said for the over 1.2 million financial professionals employed in the UK’s financial sector.
In response to the outbreak, on March 11th the Bank of England (BOE) brought forth a series of policies to support many households and businesses. Leading these policies was the introduction of a new Term Funding Scheme. According to the BOE “the TFSME will, over the next 12 months, offer four-year funding of at least 10% of participants’ stock of real economy lending at interest rates at, or very close to, Bank Rate”. The finance and investing professionals will begin to see this shift across a variety of their stocks and shares, and the managed investment services for their clients.
Liquidity: A clear risk being seen in the financial sector, is that of bank liquidity. With many banks and financial companies feeling the global impact of minimized trade and business, it puts limits on their effectiveness for investing & project development. With a lack of investing opportunities or new financial avenues to work in, the current climate further puts strain on those financial professionals.
Supply & Demand: In order to maintain those effected, supply chains and markets such as Healthcare and Manufacturing are looking toward the UK government for support. The increased demand for certain health & life insurances as well as the limited availability of supplies/products has led to much volatility within the market. These financial arrangements between businesses have either been slowed or put completely on hold. This provides financial professionals a hard basis to project short and long-term financial planning for their clients.
Operations: With shortages in labour and decreased access to certain materials and funding, many lenders and borrowers have to worry about default. With a lack of financial projections and operational success, previously arranged contracts can be impacted. In the market, financial professionals will have to tread lightly in order to protect their investments or financial obligations to their clients.
While it's difficult to provide an accurate prediction the overall impact COVID-19 will have on the financial markets, we can plan out our services around you. From short-term financial advice to long-term income protection, J Edward Sellars will be here to assist. While this is a global crisis, we will continue to monitor its impacts on our UK financial market, to better assist our clients navigate through the uncertainly of the Coronavirus. Please feel free to contact us for professional financial planning and savings advice. We're proud to serve residents across Clevedon, Somerset.