They used to say 24 hours is a long time in politics. Well, it is even longer in a global pandemic, with the ever-changing situation rendering data obsolete within minutes at times, never mind hours.
Our daily lives have changed beyond all recognition as we rapidly adapt to two very different worlds - the one before Coronavirus and the one we are in right now.
Being bombarded with data may not exactly be new, but what is, is the speed at which that data changes. And with that comes new challenges for data scientists, analysts and indeed anyone trying to get to grips with the ‘latest’ figures.
This week in the UK we’ve had the release of two sets of data that in #normal circumstances would be digested and closely scrutinised for the insight and future indicators they provide. In the current climate it is very hard to do anything but write them off as 2019/20 BC (Before Coronavirus) and therefore completely irrelevant today.
First up was the latest inflation data. According to the Office for National Statistics, consumer price inflation (CPI) slowed to 1.7% in February from 1.8% the previous month.
The slight decrease was the continuation of a trend of low inflation, which has remained below the Bank of England’s 2% target since August last year. And that is set to continue, with economists expecting inflation to fall significantly further as a result of the coronavirus crisis, prompted by a fall in oil prices and weaker economic activity.
Today it was the turn of the retail sector to fill us in. We already knew the sector is struggling. For the past couple of years the situation for retailers has been dire and gradually worsening. Today’s figures showed that UK retail sales fell 0.3% in February compared with the previous month. In the three months to February, sales were down 0.6% compared to the previous period.
Things can only get worse there. With all non-essential retailers ordered to shut up shop, online sales can at best offset some of the lost sales in the stores. But that’s not the case for all retailers.
Fashion chain Primark is among the UK businesses now refusing to pay quarterly rent due on Wednesday. It, like others, is asking landlords for help during these times. Primark, for one, relies solely on high street sales, providing no option for customers to buy online.
Primark, owned by Associated British Foods, with its low-cost, fast-fashion, had been weathering the retail rout better than most, as cost-conscious shoppers kept its tills ringing. Now that its shops are shuttered and sales have stopped - and for who knows how long - Primark (and indeed its parent company who had been relying on its fashion arm to keep the rest of the troubled group afloat) is looking to be in dire straits.
And landlords, as Intu Properties, owner of the Lakeside shopping centre in Essex, has already demonstrated, are really not in any stronger a position. Unfortunately few, if any, of them are in a position to cut each other any slack.
This is a bad situation, that is getting worse. For many months - well before the Coronavirus threat - many were debating whether we were already in a recession; the widely-accepted definition of recession being two quarters of zero growth, meaning you’re always in one and possibly even coming out of one, when recession is finally declared a ‘thing’.
The retail rout, the interminable Brexit over-hang and the long-lasting downturn in consumer spending seemed to suggest we had to, at least, be heading that way. Now there’s no doubt. And you wonder if there are any tricks left that can be pulled out of the proverbial bag.
Economists had been speculating about whether the Bank of England would cut interest rates, as the Monetary Policy Committee had voted - before the pandemic took hold in the UK - to hold rates at 0.75%. As it did it forecast that improved business sentiment would bring inflation to the 2% target within three years.
That’s all academic now that rates have been slashed twice, first to 0.25% and then to 0.1% days later, in order to cushion the economy and incentivise continued lending.
What’s next? No-one knows for sure. But now is not the time to try to predict the next stage or try to time the market.
As the saying goes ‘the darkest hour is just before the dawn’. That may be some way off yet, or just around the corner, but the one thing we do know is that the ever-changing situation will evolve quickly, and you want to be invested when the dawn does eventually come.
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