Knight Frank Daily Update Wednesday 17th June

Good morning,

Need to know

UK researchers say they have the first evidence that a drug can improve COVID-19 survival: a cheap, widely available steroid reduced deaths by up to one third in severely ill patients.

The study, led by the University of Oxford, was a large, strict test that randomly assigned 2,104 patients to get the drug and compared them with 4,321 patients getting only usual care.

Prime Minister Boris Johnson hinted yesterday that he may cut the 2 meter distance rule if coronavirus cases keep falling.

Americans went on a shopping spree last month that produced a record-breaking rise in sales as retailers began to reopen, suggesting that the world’s largest economy is recovering faster than expected.

However, Federal Reserve Chair Jerome Powell struck a cautionary tone as news emerged that infections hit record highs in six US states as they progressed with reopening.

Meanwhile, China is now ramping up containment measures to deal with a new outbreak in Beijing.

The property market

As the potential for further cuts to the Bank of England's base rate grows, Knight Frank Finance outlines what a shift to negative rates would mean for borrowers.

While the next decision on the base rate, due to be published at midday tomorrow, is unlikely to herald a cut this month, the meeting minutes are likely to reveal continued debate among Monetary Policy Committee members as to the merits of lowering the rate below its current level of 0.1%.

Morgan Stanley, the American investment bank, sees the base rate reaching zero in November with the central bank potentially cutting further in 2021.

Oliver Knight's analysis of the likely effects of Covid-19 on student numbers suggests the majority of UK university applicants are still planning to start university in the autumn, which offers some clarity to PBSA operators concerned about rental income.

Almost nine out of every ten undergraduate applicants surveyed by UCAS said they still plan to head to university in September or October.

Andrew Shirley checks in on private jet travel, and finds activity in late March surged on demand for last-minute repatriation, before virus-suppression policies acutely limited operational capacity for business aviation fleets.

Don’t forget to register for the next edition of Commercial Conversations which will take place tomorrow morning – Will Matthews leads a discussion on lessons from the property market recovery across Asia.

If you have any questions, please contact me, or the team.