The mayor of London, Sadiq Khan, has also called on the chancellor to extend VAT relief and offer targeted support for businesses in the night-time economy:

While bitcoin is still trading below Sunday’s all-time of $38,000, JP Morgan has predicted that the cryptocurrency could trade as high as $146,000 if it solidifies its reputation as an alternative to gold.

Analysts said bitcoin has emerged as a rival to gold and is being viewed as a way to hedge against inflation by investors looking for an alternative to the depreciating US dollar.

JP Morgan said:

Bitcoin’s competition with gold haas already started in our mind.

Considering how big the financial investment into gold is, a crowding out of gold as an ‘alternative’ currency implies big upside for bitcoin over the long term.

According to Reuters’ report, the note said bitcoin was likely to outshine gold as millennials become a more important component of the investment market over time.

The report added that the bitcoin price would need to jump nearly fivefold to $146,000 to match the value of private gold wealth held in gold bars, coins or ETFs.

JP Morgan’s note added:

We note that the spectacular bitcoin rally of the past few weeks has moved bitcoin into more challenging territory, not only in terms of its positioning backdrop but also in terms of its valuation.

Bitcoin is currently trading up by 2.2% at $31,727, still below the record high of more than $34,800 reached just days ago.

Gold, meanwhile, is trading at $1,950 per ounce.

The chairman of the Federation of Small Businesses Mike Cherry has joined calls for a broader package of support for businesses that he says “matches the scale of the economic damage we are seeing” due to Covid lockdowns.

These funds come after a disappointing festive period and are followed by a last minute lockdown and do not go far enough to match the scale of the crisis that small firms are facing.

There remain too many groups who need more support to weather this storm such as the newly self-employed, those in supply chains and company directors.

The FSB said it’s still calling for the creation of a Directors Income Support Scheme, that would provide a taxable grant for directors of limited companies worth 80% of three months average monthly trading profits, capped at £7,500.

The business group is also calling for extra help for businesses that have maxed out the bounce back loan scheme, (having already borrowed 25% of turnover, worth up to £50,000) but still need more cash to survive.

The FSB also wants to see a longer grace period before businesses are required to repay those loans.

This lockdown is expected to last for some time, even when restrictions ease, many small firms will be unable to function at 100 per cent, if at all. Which is why the government should create a Spring Economy Plan to help firms get through to drive a vaccine-enabled recovery.

After clawing their way through 2020, the start of the new year looks set to be an even worse one for many.

Small businesses are the backbone of our economy, and it is absolutely vital we support them in every way possible until the crisis finally begins to ease.

Lloyd’s of London, the world’s biggest and oldest insurance market, has closed its underwriting room for the second time in its history.

As of today, all insurance brokers, agents and underwriters will be working from home again, after England introduced a third national lockdown.

The whole Richard Rogers-designed building in the City has effectively closed, and Lloyd’s said the underwriting room was unlikely to reopen before mid-February.

The insurance market shut its underwriting room for almost six months on 19 March, but kept it open one day a week during the second English lockdown in November.

Since then, hundreds of people had been doing business face-to-face on the underwriting floor most days, compared with thousands before the pandemic, which dwindled to even smaller numbers over the Christmas and New Year period.

Berenberg’s senior economist Kallum Pickering adds that the UK government may have to extend some programmes like government-backed loans and furlough to ensure the private sector survives lockdown.

Fiscal policy tools such as the various coronavirus business loan schemes as the well as the furlough scheme (due to end 30 April) may need to be extended once again to further support private sector cash-flow and jobs.

However, he doesn’t think the Bank of England is likely to go to extreme measures like cutting rates below zero, to support the recovery.

While markets may begin to price in a higher chance that the BoE will soon cut the bank rate below zero, it remains unlikely, in our view.

To support confidence, the BoE may announce an increase in the pace of ongoing asset purchases – it has plenty of scope to achieve this within its current plan to buy £150bn of gilts until the end of 2021.

Kallum Pickering, senior economist at Berenberg, says the bank has slashed growth UK forecasts for Q1 in light of fresh lockdowns in England and Scotland.

Instead of a 3% rise, quarter-on-quarter for Q1, Berenberg is now projecting a 2% decline.

Following the new lockdown, the near-term outlook now looks much worse than before.

However, he said the medium term outlook is still positive and the first quarter decline will largely be offset by a faster rebound in Q2 of 9% (compared to the 6% previously predicted)

Pickering added that Q3 growth is also expected to accelerate to 4.5% from previous forecasts of 2.3%, while the fourth quarter is expected to deliver a 1.3% rise versus 0.9% as previously forecast.

The economist said:

On an annual basis, we now project an 11.5% decline in 2020 followed by gains of 6.0% in 2021 and a 6.5% gain in 2022 (previously -11.6%, 7.3% and 4.9%, respectively).

Despite the near-term hit, the UK medium-term outlook remains positive.

With much less Brexit uncertainty and strong gains in global demand ahead, UK real GDP can still recover to its pre-pandemic level by the end of 2022 as previously expected.

Here’s our full story on the Chancellor’s business lockdown support package:

The FTSE 250 is one of the last bright spots across European equity markets.

But the UK’s domestically-focused index has lost nearly half of its gains and is up just 0.5% compared to 1% just a few hours ago. Here is a snapshot of how European equities are trading:

• FTSE 100 is down 0.1%
• Germany’s DAX is down 0.4%
• France’s CAC 40 is down 05%
• Italy’s FTSE MIB is down 0.4%
• the pan-European Stoxx 600 is down 0.2%

Meanwhile, US futures are pointing to a flat open:

• Dow futures are up 0.07%
• S&P 500 futures are up 0.05%
• Nasdaq futures are up 0.04%

Office landlords, beware. New lockdown measures in England and Scotland have pushed a return to the office even further into the future for UK workers.

But this will also have an impact on the rental value of London offices, according to new research from Morgan Stanley.

The US bank is currently forecasting a cumulative 8-10% fall in office rental values by March 2023.

It puts this slide down to the more enthusiastic adoption of working from home by UK office workers compared with their counterparts in continental Europe, and UK employers’ willingness to allow more working from home in the future, all of which are negative for landlords.

Pubs and breweries in England are giving a rather lukewarm reaction to Chancellor’s Rishi Sunak’s offer of one-off grants to help English pubs get through lockdown 3.0.

Pubs will be eligible for grants of between £4,000- £9,000 depending on their rateable value, which comparable to the rent that premises could charge on the open market.

Chris Jowsey, CEO of Admiral Taverns, said the 1,000 publicans who lease their pubs from him, most of whom are only eligible for the lowest grant, needed £3,000 a month of support just to stay afloat.

The new one-off grants, together with those already available, mean the majority will be getting around £2,300. “It’s welcome but it’s just not enough,” he said.

The British Beer & Pubs Association hailed a £277m “lifeline” for English pubs that it said would keep them afloat until the spring, preventing a flood of potential closures.

But it warned that the industry’s long-term survival would require a cut to beer duty and continued business rates relief.

Some pubs lost out on tens of thousands of pounds of sales due to Christmas lockdowns and Christian Mole, head of UK hospitality and leisure at accountancy EY, wonders why this has not been recognised.

It is surprising that there does not appear to be some differentiation in grant levels between those businesses in areas which were able to open through to Christmas and those which were not.

Meanwhile, SIBA - the trade body that represents the UK’s army of craft brewers, is fuming that pubs won’t be allowed to offer alcohol with takeaways, cutting off a major route to market. Chief executive James Calder said:

Sales through takeaway, click and collect and drive through have enabled many to just about survive up to now.

This reversal in policy directly discriminates against small businesses while allowing supermarkets to continue to sell beer from global breweries.

Despite calls for further business support (and quick), the chancellor Rishi Sunak has reportedly said that the budget in March will be an excellent opportunity to take stock and set out the next stage of support, according to Reuters.

The budget is set for 3 March.

British Chamber of Commerce boss Adam Marshall has criticised the government for failing to announce Covid restrictions and business support measures at the same time last night.

Speaking to Sky News this morning, he said:

This is a pattern that we have seen repeatedly whereby businesses find that their operations are going to be somehow further curtailed without having knowledge of the support that’s going to be there to help them through that period of restriction and difficulty.

It should be possible, I think, to announce both restrictions and support in tandem, because that in turn generates business confidence and means that phones aren’t ringing off the hook with worried businesses wondering whether they’ll be able to open and be whether they’ll be able to pay their people and their suppliers at the end of the month.

TUI and Thomas Cook are among the airlines cancelling their UK flights amid fresh Covid lockdowns, according to the BBC Scotland’s business editor:

There are still looming deadlines marking the end of government-backed loans, business rates and VAT relief, that may not be offset by the grants programme.

It raises questions over whether further support could be announced before the March budget.

ITV business editor Joel Hills has helpfully laid out the bulk of government support offered to date to businesses hit by Covid:

British Airways owner IAG has said it’s reviewing its flight schedule following the UK’s national lockdown, according to Reuters.

We’ll bring you further updates as we get them.

Some business owners have fairly pointed out that supply chains firms could be missing out on direct grants, as many may not have the kinds of physical premises that would make them eligible for large enough grants to cover their costs.

The CEO of the Recruitment & Employment Confederation says:

The domestically-focused FTSE 250 is making further gains in the wake of the chancellor’s grant announcement and is now up 0.7% at 20,688 points.

The FTSE 100 is up around 0.3% at 6,597 points.

The pound is also edging higher against the US dollar, up 0.1% at $1.3585.

You can follow the Treasury’s announcement in more detail on our politics live blog:

Here’s Chancellor Rishi Sunak’s full (pre-recorded) announcement:

Of course, this means if you don’t have physical sites, you are at the mercy of the discretionary fund and we don’t yet know how that will be distributed.

Nonetheless, the Institute of Directors business group has broadly welcomed the support:

The chancellor’s £594m discretionary fund for businesses will be shared between the devolved nations as follows:

• The Scottish government will receive £375m
• The Welsh government will receive £227m
• The Northern Ireland executive will receive £127m

BBC Scotland’s business editor Douglas Fraser breaks down the eligibility criteria for the new business grants:

Going back to Next, chief executive Simon Wolfson has confirmed that the retailer is part of a consortium bidding for some Arcadia brands.

However, he stressed that Next is not looking at taking a majority stake in any Arcadia deal, Reuters reports.

Our retail correspondent Sarah Butler reported in December that Next was considering teaming up with the US owner of Oak Furnitureland to buy Sir Philip Green’s Arcadia Group, which fell into administration in November, putting 13,000 jobs at risk.

Meanwhile, Morrisons is planning to give up parking spaces for the UK’s vaccination programme, according to PA Media’s business editor:

ITV’s business and economics editor Joel Hills details why Next’s performance and projections are so surprising given their high street footprint:

High street clothing retailer Next is helping lift the FTSE 100, with shares rising 8% despite fresh lockdown measures.

That’s because investors are focusing on its strong Christmas trading figures instead. My colleague Zoe Wood explains:

Next has emerged as a winner from a tough Christmas period as sales transferred from shuttered stores to its website but the fashion chain warned new lockdown measures would wipe out the extra profit it had made.

The retailer’s chief executive Simon Wolfson said profit from better than expected sales in November and December would be almost entirely offset by this month’s new lockdown restrictions which would force its stores to close, as well as costs stemming from the disruption to its important traditional Boxing Day sale.

The retailer said the pandemic was also delaying the arrival of container traffic from the far east. Wolfson said many of its deliveries were running two to three weeks late with its stock levels 10% lower than two years ago. Wolfson expected stock levels to “return to more normal levels by the end of March”.

Sales in the nine weeks to 26 December were just 1.1% lower than in 2019 – a far better outcome than the drop of 8% pencilled in by the company. While UK store sales tumbled 43% its online sales were up 36%.

UK equities have managed to return to positive territory.

We’re nowhere near yesterday’s gains but the FTSE 100 is holding comfortably above 6,500 and is up 0.5% so far this morning.

Even the domestically-focused FTSE 250 is up 0.25%. Elsewhere, the German DAX is down 0.2% and the CAC 40 is down 0.1%.

Correction: The FTSE 250 was up 0.25%, not 0.5%

But supermarkets are upbeat as they report their Christmas trading figures.

Strong demand for luxury Christmas favourites helped to drive an 8.5% rise in sales at Morrisons over the festive period, as the chain kicked off reporting on what is expected to be a bumper trading period for supermarkets, Sarah Butler reports.

Morrisons said online sales had tripled and growth was boosted by strong demand for festive favourites such as champagne and salmon as families made the most of the quieter festivities.

Sales in Morrisons established stores rose 7.3% in the nine weeks to 3 January but that was boosted by a 1.2% rise in wholesale sales via the retailer’s deal with Amazon and to supply convenience stores.

David Potts, the chief executive, said:

The pandemic has had a severe effect on people and communities around Britain for nine months now but it has been especially hard at Christmas time.

I’m very pleased with the way the Morrisons team has helped our customers across the nation enjoy their Christmas in the best way they could.

Morrisons shares are up 0.9% this morning.

British Airways owner IAG is one of the biggest fallers on the FTSE 100, dropping 1.7% at the open.

It comes amid further uncertainty about when international travel and tourism will return to some kind of normal.

We’re expecting to hear more about rules on international amid England’s new lockdown later today, according to cabinet office minister Michael Gove (who has been making the media rounds this morning).

The other biggest losers on the FTSE 100 include property developers, retailers (including Primark owner AB foods), and UK bank Barclays:

• British Land is down 2.3%
• Land Securities is down 2.2%
• AB Foods is down 1.6%
• Polymetal International is down 1.8%
• IAG is down 1.7%
• Burberry Group down 1.4%
• Barclays is down 0.9%