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What to watch: ITV profits plunge, Bank of England hold steady, Wetherspoon jobs

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Edmund Heaphy
·Finance and news reporter
·6 min read
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File photo dated 17/4/2018 of the ITV logo on The London Studios in London. ITV has said demand for advertising plunged 42% in April as marketing spend ground to a halt amid the coronavirus crisis, while it confirmed ITV Studios has had to pause most of its productions due to lockdowns worldwide.
Advertising revenue plunged by 43% in the second quarter at ITV. Photo: PA

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Profits at ITV fall 93% amid brutal advertising slump

ITV (ITV.L) said on Thursday that before-tax profits dropped 93% to £15m ($20m) in the first half of its financial year.

Advertising revenue plunged by 43% in the second quarter, pushing overall revenue in the six months to 30 June down to £1.22bn.

But the broadcaster said that advertisers were slowly returning as it restarts production on most of its shows and expects to spend almost £1bn on its programming this year.

Boss Dame Carolyn McCall said her company was now seeing an “upward trajectory” and revealed that more Brits than hoped had signed up to BritBox, likely because they were stuck in lockdown.

Production has restarted, or been completed, on around 70% of its shows that were paused when the UK and much of the rest of the world went into lockdown, ITV said.

It means that the broadcaster will plough around £960m into its programming this year.

Bank of England holds rates and bond-buying steady

The Bank of England (BOE) on Thursday held both its benchmark interest rate and the size of its bond-buying programme steady, but warned that the UK’s economic output would not return to its pre-pandemic levels until at least the end of 2021.

Announcing the decision, the bank said it expected the UK’s gross domestic product (GDP) to shrink by 9.5% this year, the worst contraction in a century.

Since the onset of the coronavirus crisis, the bank’s Monetary Policy Committee has already twice cut its benchmark interest rate to 0.1% from its previous level of 0.75%.

The bank voted unanimously against expanding asset purchases, having voted for a £100bn ($131bn) increase in June that took the target of its Asset Purchase Facility to £745bn.

Though it said that the economic blow of the pandemic would be less severe than it predicted in May, the bank nonetheless warned that the UK’s GDP would be 20% lower at the end of the second quarter of 2020 than it was at the end of 2019.

UK builders axe jobs despite rebound

UK construction firms have seen the fastest rebound in activity in five years over the past month, new figures suggest.

A bellwether survey of construction firm leaders showed a “sharp and accelerated expansion” of work in July, particularly in housebuilding, but it was not enough to stop a continued fall in employment.

Pent-up demand, the reopening of sites and supply chains and the wider easing of lockdown restrictions have helped firms expand after the upheaval of recent months, despite the continued health and economic crisis.

The headline figure on a purchasing managers’ index (PMI) for the sector rose to 58.1 in July from 55.3 in June, which had marked a return to growth after a 28.9 reading in May.

Figures above 50 suggest most firms are growing and below 50 show decline on the closely watched index, based on a survey carried out by IHS Markit and the Chartered Institute of Procurement & Supply (CIPS).

Wetherspoon to axe up to 130 head office jobs

JD Wetherspoon (JDW.L) said on Thursday that up to 130 jobs were at risk at its head office, as the popular pub operator warned that the coronavirus crisis had resulted in a downturn in trade in the hospitality industry.

The company said that it had written to all 417 people employed at its head office, including those based outside of its headquarters in Watford, to inform them that between 110 and 130 positions were at risk of redundancy.

“The decision is mainly a result of a downturn in trade in the pub and restaurant industry generally,” said chief executive John Hutson on Thursday.

Hutson noted that the company was slowing its expansion plans and reducing the number of pubs it operates.

“We should emphasise that no firm decisions have been made at this stage. All head office employees will be affected by the process, with the exception of those working directly in Northern Ireland and the Republic of Ireland,” he said.

TikTok to invest almost $500m in its first EU data centre in Ireland

TikTok will spend €420m (£378m, $497.5m) opening its first European data centre in Ireland, it has announced.

The centre, which will store videos, messages and other data generated by European users, is expected to be operational by 2022.

Currently, all TikTok data is stored at centres in the US and Singapore. This includes users' ages, passwords, email addresses, phone numbers, stored contacts, GPS coordinates, IP addresses, device information, web browsing and search histories, anything posted online, payment information, keystroke patterns and screen tap rhythms, among other things.

TikTok has vowed to “improve the safeguarding and protection of TikTok data” at this base, following evaluation of security practices that were implemented when the platform was smaller but may no longer work at its current scale.

European stocks fall after stark Bank of England forecast

European stocks fell on Thursday after the Bank of England predicted that the UK economy would suffer its largest contraction in a century this year.

Though the bank held both its benchmark interest rate and the size of its bond-buying programme steady, it warned that the UK’s economic output would shrink by 9.5% this year and stay below its pre-pandemic levels until at least the end of 2021.

The pan-European STOXX 600 index (^STOXX) fell by around 0.4%, while London’s FTSE 100 (^FTSE) was 1.3% in the red.

Stocks in the UK were dealt a second blow by a series of weak company results, including from Glencore (GLEN.L) and ITV (ITV.L).

Germany’s DAX (^GDAXI) declined marginally, while France’s CAC 40 (^FCHI) fell by more than 0.5%. Stocks fell by around 0.8% on Italy’s FTSE MIB (FTSEMIB.MI), as did shares on Spain’s IBEX (^IBEX).

What to expect in the US

Futures were pointing to a slightly higher open for stocks in the US, even as a dispute about funding for the United States Postal Service raised the prospect of a further delay to lawmakers agreeing on new stimulus measures.

Futures on the S&P 500 (ES=F) rose by around 0.1%. Dow Jones Industrial Average futures (YM=F) climbed by around 0.2%. Nasdaq futures (NQ=F), meanwhile, were up by marginally.