Markets madness and bombed out public finances show a world turned upside down

If you want to see just how topsy turvy the world has been turned by the virus, then check this out: Games Workshop, owner of the Warhammer game, is now worth more than Centrica, owner of British Gas.

How mad is that? The owner of the world’s most popular game has seen its shares soar from £35.90p in mid-March to £66.85p today, giving it a market price of £2.18 billion.

Customers spending more time at home playing with the miniature figurines fighting out their war-games have caused online sales to shoot sky-high.

Some Games Workshops stores are already opening up again – with social distancing rules – and the group reckons that profits this year will be no less than £70m.

By contrast, Centrica’s share price has plunged from 93p in January to 35p today, valuing the gas supplier at £2 billion. The British Gas and North Sea operator, Spirit Energy, has been hit by the collapse in the oil price but also fuel demand since the lockdown.

Clothing is another industry to be wrecked by most of us being locked down clearing wearing the same pair of jeans. The latest ONS figures for retail sales show just how little we have spent, even online.

Retail sales fell by a record 18.2% in April with clothes sales dropping by more than half as the country’s shops pulled down their shutters. No wonder that Marks & Spencer and John Lewis are reporting such ghastly results. There are small and hopeful signs that retailers are trying to get back to normal: footwear retailer Kurt Geiger says it will quarantine shoes for 24 hours after customers try them on as they plan reopening up to 20 stores next month.

It will be a fiddly business though. Customers will be asked to put on disposable “pop socks” and use antibacterial hand sanitiser before trying on shoes to prevent the virus spreading.

But the big blow today was the sheer scale of the devastation being wrought on the economy with government figures for April showing HMG borrowed a record £62.1billion, money spent on bailing out workers and businesses.

In April alone, the government has borrowed more in one single month than had been forecast for the entire year before the pandemic took hold. The £62.1 billion is greater than at any time since records began in 1993 and far bigger than even during the financial crisis.

The Office for Budget Responsibility, the Treasury’s spending watchdog, now estimates the deficit could be as great as £300bn this year. To put that into perspective, that is five times the amount borrowed a year ago, and almost twice as much as after the 2008 crash.

Tax receipts are also falling off a cliff. Total tax receipts taken by the Government in April fell by 42% compared to the same month last year.

The biggest fall was in VAT, with the total tax dropping 107% as companies deferred payments thanks to the government’s package of measures to help boost firms’ cashflow during lockdown. Income tax receipts fell 21% and National Insurance payments were down by 18%.

Shutting down the housing market has been costly, with stamp duty falling by 43% fall in stamp duty during April. But it’s the closure of pubs and restaurants that has had a devastating impact on the tax take: beer duties fell 69% as pubs and restaurants stopped trading while air passenger duty payments plunged 90% because travel ground to a halt. After early falls this morning, the FTSE 100 held remarkably steady closing just off at 5,993.28 while the FTSE 250 index closed up at 16,398.86.

What a mess. Perhaps the Treasury needs to order a one off Warhammer windfall tax.