- The Government extended both the furlough scheme and payment holidays to support businesses
- FTSE 100 price is up 1.5% on the day after investors pushed the index higher to erase this morning’s losses
- The index is close to secure the first bullish daily close in six days
FTSE 100 price is up about 1.5% on the day despite the lockdown measures that are set to be introduced in the UK. The Government extended both the furlough scheme and payment holidays.
Fundamental analysis: Government extends payment holidays
The U.K. financial regulator announced its decision today to extend payment holidays on credit cards, car finance, personal loans as well as pledged goods before new measures to curb the spread of coronavirus take effect later this week.
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The British government said it will reintroduce a nationwide lockdown in England starting Thursday.
The Financial Conduct Authority (FCA) issued a statement where it said that those who have not yet had a payment deferral under guidance released during the summer are able to request the one that lasts for up to six months.
The watchdog also said that consumers who already applied for one deferral would be able to apply for another one as well.
“Borrowers should only take up this support if they need it,” the FCA said.
Those who had expensive short-term credit such as payday loans would be able to apply for a payment deferral of one month, assuming they haven’t applied before.
“We will work with trade bodies and lenders on how to implement these proposals as quickly as possible, and will make another announcement shortly,” the FCA said.
Yesterday, British government extended the furlough scheme to further support businesses.
“Today the Prime Minister said the government’s Coronavirus Job Retention Scheme (CJRS) – also known as the Furlough scheme – will remain open until December, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500,” the government announced in a statement.
“Under the extended scheme, the cost for employers of retaining workers will be reduced compared to the current scheme, which ends today. This means the extended furlough scheme is more generous for employers than it was in October.”
Technical analysis: FTSE 100 rallies to erase losses
FTSE 100 price is up about 1.5% on the day after investors pushed the index higher to erase this morning’s losses. This way, the UK’s blue-chip stock market index is on its way to secure the first bullish daily close in six days.
The index is now approaching the broken support at 5700. A break above this level would open the door for a more sustainable recovery. Alternatively, levels below 5500 are likely to come into action if the risk sentiment continues to deteriorate.
The UK will extend furlough scheme and payment holidays on credit cards, car finance, personal loans as well as pawned goods in a bid to help borrowers affected by coronavirus.