What can we expect from the Fed later today? Ranko Berich, head of market analysis at foreign exchange firm Monex Europe, says:

Enhanced forward guidance and tweaks to asset purchases will be the two main tools the FOMC are likely to consider ahead of tonight’s meeting. The FOMC took a somewhat passive stance in June, discussing the enhancement of forward guidance but not taking the plunge.

Meeting minutes revealed that “most participants” were on board with the idea of more explicit forward guidance for the future path of policy, and there were signs that a consensus is beginning to emerge about its nature. Inflation outcomes were supported by a number of participants and are the natural starting point. In our view, enhanced forward guidance is likely at this meeting, with more aggressive measures such as yield curve control likely to be deployed later in the year.

Britain’s second-biggest pharmaceutical company GSK also reported second-quarter results at lunchtime. The firm, one of the biggest vaccine makers in the world, missed profit forecasts as sales of vaccines declined because fewer people went to the doctor’s during the pandemic for fear of catching coronavirus.

Also, people had been stockpiling painkillers and respiratory drugs in the previous quarter, at the height of the Covid-19 pandemic, but this tailed off between April and June.

Vaccine sales fell 29% to £1.1bn in the three months to June, with sales of GSK’s Shingrix shingles vaccine, a recent blockbuster, down to £323m. Overall turnover dropped 3% to £7.6bn, while adjusted earnings fell 38% to 19.2p a share. GSK stuck to its 2020 forecast.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, says:

Lockdowns and a focus on addressing immediate coronavirus needs have kept patients away from doctors surgeries, and that’s had repercussions for GSK’s vaccines business in particular. We hope vaccines will have been delayed rather than cancelled altogether, in which case revenues should eventually appear.

However, that’s less true of consumer health division – which has also struggled. We worry a bit about the consumer business. It’s got some good brands, but the tail is long and in recent years the division has lent heavily on a few standout performers – most notably Sensodyne. The recent Pfizer deal provides extra scale, and the vitamins portfolio looks like a strong performer, but we’ve yet to be convinced the division will be an attractive standalone option when it gets spun-off from GSK in a few years’ time.

It would be remiss not to mention the work GSK’s vaccines business is doing directly on Covid-19. It’s not got a candidate of its own, but its vaccine technology is finding its way into several other candidates. Given the increased focus on vaccine preparedness that’s likely to come out of this crisis, we suspect GSK’s impressive vaccines operations will attract increased investor attention in the years ahead.

Earlier today, the UK government signed a deal with GSK and France’s Sanofi-Pasteur for 60m doses of the potential Covid-19 vaccine they are developing together. If the vaccine proves successful, the UK could begin to vaccinate priority groups, such as frontline health and social care workers and those at increased risk from coronavirus, as early as the first half of next year, the Department for Business, Energy & Industrial Strategy (BEIS) said.

GSK has also made its adjuvant technology available to other organisations that are working on Covid-19 vaccines. It can help reduce the amount of antigen needed and so enable more vaccine doses to be made.

Emma Walmsley, GSK’s chief executive, said on a media call:

We don’t expect to profit from these vaccines partnerships during the pandemic phase, very specifically because we want to make sure we are investing any short-term returns back into long-term pandemic preparedness and donating to the developing world.

Spotify is the second of the big US tech firms to report second-quarter results, after Twitter last week. Google owner Alphabet, Apple, Amazon and Facebook will report tomorrow.

Spotify has said its back to business business as usual beating subscriber growth expectations in the second quarter as the number of hours users spent listening to music and podcasts returned to pre-Covid levels, reports our media business correspondent Mark Sweney.

The company grew the total number of monthly users, those who listen for free and pay a subscription, by 29% year-on-year to €299m in the three months to the end of June. Paying subscribers, who bring in the lion’s share of Spotify’s income, grew 27% year-on-year to 138m. Both came in slightly above Wall Street expectations.

“We met or exceeded our guidance on almost every metric,” said Daniel Ek, Spotify’s founder. “Usage returned to normal at the end of the quarter and we feel good about our momentum as we go into the third quarter.”

The company said that early in the quarter it had seen some “Covid-related softness” in some countries, with increases in payment failure from some subscribers, but that by June the business had “rebounded”.

Spotify has been impacted by advertisers freezing budgets as the world went into lockdown, with ad revenues falling 21% to €131m in the second quarter. However, the company said that they are coming back with June down just 10% year-on-year.

The advertising slowdown had little impact on Spotify’s overall business as it accounts for just a small fraction of its total €1.89bn revenues, which rose 13% year-on-year in the second quarter. Subscription revenues, the company’s lifeblood, rose 17% to €1.76bn.

While negotiations continue between US lawmakers over the Republican-controlled Senate’s $1 trillion stimulus plan, our columnist Gene Marks has taken a look at what it means for small businesses. He says the proposal looks good, and offers three elements to help struggling firms get through the Covid-19 crisis.

The bill’s final form will probably be different, but the key points in the proposal are:

• Loans under $2m would basically be forgiven, with some caveats
• More expenses would be eligible for forgiveness
• There will be more PPP (Paycheck Protection Program) loans available

Here’s more analysis of the Bank of England lending data, from Paul Dales, chief UK economist at Capital Economics.

The signs that firms did not rush quite as fast to take on more debt in June and that households started to borrow again rather than pay down debt suggest that the economy is moving back towards normal. But as the road to normal will be long, we doubt that the leap in money growth will lead to a surge in inflation.

[And] the legacy, of course, is that businesses are now lumbered with much more debt.

As the £0.1bn fall in consumer credit was small relative to the average drop of £5.2bn in the previous three months, it supports other evidence that households have started to spend again. That said, in the year before the crisis consumer credit rose by £1.1bn a month, so spending remains well below normal.

Turning to lending to businesses, he notes:

As the extra £400m that firms borrowed from banks in June was much smaller than the huge £33.8bn they added to their debt pile in March, the corporate sector as a whole is no longer leaning on banks as heavily. That said, small businesses were still scrambling for cash. They borrowed an additional £10.7bn from banks in June, the bulk of which came through the government’s loan schemes.

And while large businesses reduced their bank loans by £18.2bn, they sourced an extra £10.6bn of finance from the financial markets. But even the latter was smaller than the £18.1bn they acquired in April. So while businesses are still taking on more debt, they are doing it at a slower pace than in March or April.

Analysts at Barclays have released a note on potential Covid-19 vaccines, saying that they are showing promise, but they cautioned:

A working vaccine may still be 6-12 months away and getting it to enough people to make a difference may taken even longer.

Here is our latest story on efforts to develop vaccines for the deadly virus:

On the Covid-19 front, an attempt by Swiss pharmaceutical firm Roche to repurpose its rheumatoid arthritis drug Actemra to treat patients hospitalised with severe Covid-19-related pneumonia has failed in a late-stage trial.

Roche launched the trial involving 330 patients in March as it joined other pharmaceutical companies seeking to repurpose existing medicines to fight the pandemic.

The company said:

The COVACTA trial did not meet its primary end-point of improved clinical status in patients with Covid-19 associated pneumonia, or the key secondary end-point of reduced patient mortality.

Meanwhile, the Bank of England’s chief economist Andy Haldane has conducted a regional visit via online meetings with businesses and community groups in northeast England.

He said he saw mixed signals about the economy, and that estate agents had seen a rapid rise in activity since reopening in mid-May. Haldane voted against expanding the Bank’s stimulus programme last month.

He wrote in an article for North East Times Magazine, a regional business publication:

While the outlook is inevitably uncertain, given the possibility of further job losses, most felt relatively upbeat about the outlook. So far, then, so good.

He picked up gloomier signals from community groups, however.

People previously ‘just about managing’ have suddenly found themselves struggling, increasingly reliant on food banks.

Jane Goodland, corporate affairs director at advisory and wealth management firm Quilter, says “financial education and wellbeing are vital to the success of our nation”:

The FCA’s Financial Lives survey presents, yet again, astounding figures, revealing that 46% of UK adults display a characteristic that could make them vulnerable. And this is before the impacts of Covid-19 are felt. These sobering figures focus the mind, particularly when we see some groups are hit more than others such as those who rent, are unemployed or are over 75.

The pressure is on for companies, government and charities to tackle this financial vulnerability. A huge challenge when it comes to customer vulnerability is recognition. It may be that the client or customer doesn’t recognise themselves as vulnerable or even omits facts that might help them be identified as such. It becomes even harder in a digitised age when people may set up a bank account, pension, ISA etc and go years without speaking to anyone from their financial institution. There needs to be a focus on how we evolve our systems and employee training so they are attuned to even the slightest hint at vulnerability.

And we also need to think about some of this vulnerability that is preventable. While life events and, to some extent, health challenges, are not within our control, we can do more to improve our financial resilience and capability, which the FCA identify as being key to financial stability.

Jeremy Leaf, a north London estate agent and a former chairman of the Royal Institution of Chartered Surveyors, says:

As always, these numbers are a useful pointer for direction of travel of the housing market in the coming months and reflect what we have been seeing. However, approvals tend to be a little bit in the past so they are not yet recording the increase in demand we have seen since lockdown eased.

House purchase mortgage approvals are up significantly from their record low of last month, supported by the stamp duty holiday and continued low interest rates, but are still significantly below pre-Covid levels.

Looking forward, we are a little nervous about prospects for the market once government support eases as many businesses will then have to make big decisions about whether to keep staff on, which will of course have a knock-on effect on buyer confidence.

The Bank of England data also show how consumers started to repay credit card debt and loans after the Covid-19 lockdown kicked in, about £5bn a month, but the repayments have tailed off, to £86m in June.

Simon Gammon, managing partner at the property firm Knight Frank’s finance division, says the housing market clearly has been gathering pace, since the government allowed house moves and physical viewings in mid-May, after seven weeks of lockdown.

The Bank of England data shows the beginning of a rebound that all of our indicators suggest is gathering pace. In fact July is on course to be our busiest month on record.

There are many factors fuelling the post-lockdown rebound spanning the recent cut to stamp duty, successive cuts to interest rates, currency fluctuations and tax changes, and as a result everybody from first time buyers to billionaires are active in the property market.

The banks are now beginning to creak under the weight of all these applications, and we’re seeing some of the biggest lenders on the high street temporarily increase the cost of borrowing at short notice in an attempt to control the flow of business.

How long this surge lasts will depend on the development of the pandemic, and the effect on employment of the wind up of government support schemes during the autumn, but it’s clear interest rates are going to remain at or close to record lows for the foreseeable.

Here are the key points from the Bank of England’s lending data.

• UK households and businesses continued strongly increasing their sterling money holdings in June. The £16.0bn increase was, however, less than the £53bn monthly average increase seen since March. Interest rates on deposits fell further in June - new time deposit rates fell 14 basis points to 0.73%.
• Household’s net borrowing was £1.8bn in June following large repayments in previous months. The increase can all be accounted for by mortgage borrowing. Mortgage interest rates were broadly unchanged.
• Approvals for mortgages for house purchase increased to 40,000 in June, up from the record low of 9,300 in May, but still below February’s pre-Covid level of 73,700.
• Households repaid £86m of consumer credit, on net, in June, following average monthly repayments of around £5bn since March. The interest rate on new consumer credit borrowing fell 68 basis points to 4.42% in June, while credit card interest rates fell 42 basis points to 17.94%.
• Corporates raised an extra £10.7bn of finance in June, almost all from financial markets. SMEs continued borrowing from banks, drawing £10.2bn of extra loans, while large businesses repaid loans.

You can view the BOE’s release here.

The Heathrow boss told Reuters about the likely £150 cost per passenger of the Covid-19 tests:

So it’s not cheap, but equally for people who are worried about being able to go back to work or get the kids into school, there will be people who are prepared to pay that to avoid the extra period of quarantine.

However, Oliver Dowden, the culture secretary, insisted that Britain has no alternative to quarantines yet, speaking on BBC radio.

We cannot risk importing it [the virus] again from other countries where incidences are rising, that’s why we imposed the restrictions on Spain.

We are reviewing all options because what we want to do is to minimise the disruption ... I have to just caution in respect of testing [at airports], it is not the case that testing provides a silver bullet.

According to Reuters snaps, Holland-Kaye, the boss of Heathrow airport, said a Covid-19 test at the airport would cost about £150 per passenger – and passengers would be expected to pay. The cost of tests would come down over time, he added.

The UK’s culture secretary Oliver Dowden said people can travel abroad for holidays but should appreciate that we are at a risky moment and that more quarantine measures could be imposed to stop the viurs spreading.

Germany has started offering voluntary Covid-19 tests to travellers at airports, free of charge, and plans to make them compulsory for those returning from Covid-19 hotspots. People will be tested twice, upon arrival and 48 hours later. You can read more about Germany here.

The chief executive of Heathrow airport has said that the UK government must urgently introduce a passenger testing regime or face playing a game of “quarantine roulette”, after reporting a 96% fall in passenger numbers in the second quarter, reports my colleague Mark Sweney.

“Today’s results should serve as a clarion call for the government,” John Holland-Kaye said. “The UK needs a passenger testing regime and fast. Without it, Britain is just playing a game of quarantine roulette.”

He added that European countries are much further ahead in developing passenger testing regimes while the government’s inaction threatens the UK’s global economic position. The comments came as Heathrow posted a £1bn loss before tax for the first half, with passenger numbers plunging 96% between April and June.

As many of our customers have experienced, it’s difficult to plan a holiday that way, let alone run a business.

Testing offers a way to safely open up travel and trade to some of the UK’s biggest markets which currently remain closed. Our European competitors are racing ahead with passenger testing; if the UK doesn’t act soon global Britain will be nothing more than a campaign slogan.

The luxury carmaker Aston Martin has reported bigger losses: its first-half pre-tax loss jumped to £227m from £80m a year ago. The company has struggled since its stock market flotation in October 2018, but has brought in a new chief executive, finance chief and the billionaire investor Lawrence Stroll who has become executive chairman, and announced 500 job cuts in June to save £10m in costs.

Tobias Moers, the former Mercedes-AMG chief executive, will take the helm as CEO this Saturday, while Ken Gregor started as chief financial officer in late June.

David Madden, chief market analyst at CMC Markets UK, says:

In the months ahead, traders will be keen to see what plans the new management team has in store for the group. Even though the company has had a few rounds of financing, in today’s update, it still commented on additional liquidity pressure.

Investors are clearly hoping for better times – the Aston Martin share price rose 5% initially and is now 3.77% ahead.

There’s a flurry of company results this morning.

The clothing chain Next said it expects to stay in profit this year, upgrading its annual profit forecast to £195m, after reporting a 28% sales decline for the second quarter, which was much better than it had expected.

Taylor Wimpey, the housebuilder, expects to complete 40% fewer homes this year than in 2019 and posted a pre-tax loss of nearly £40m for the first half. Like other housebuilders, it shut its construction sites for a few weeks at the height of the Covid-19 pandemic. The company’s shares were the biggest faller on the FTSE 100, down 5.9%, and fellow builder Barratt also fell, by 2.5%. The housebuilders had a good day yesterday, boosted by reports that the help to buy scheme will be extended beyond the December deadline.

The European Bank for Reconstruction and Development’s Twitter account has been hacked.