Lockdown fears send FTSE into red
London’s blue-chip index has worst day since June as hospitality chiefs plead for more government support
PANICKED traders wiped more than £50bn off Britain’s blue-chip companies as pub and restaurant chiefs begged for more support ahead of a fresh Covid crackdown. The FTSE 100 dropped 3.4pc yesterday, the index’s worst day since mid-June. The fall was part of a market rout across Europe after rising coronavirus cases sparked fears that politicians will impose another round of economically crippling lockdowns.
Airlines, pub chains, housebuilders and banks all fell sharply as investors bet that Britain will be hit by tough new rules to minimise social contact, wrecking a rebound in activity following the deepest recession for decades.
Prime Minister Boris Johnson is expected to order pubs to shut from 10pm each night as part of a package of measures to be announced today. A fortnight-long “circuit break” lockdown could also be introduced in coming days to slow transmission.
Industry chiefs pleaded with the Government to offer fresh help so battered pubs and restaurants can survive.
They warned mass job losses are inevitable without an extension to the furlough scheme, which is still supporting 900,000 roles in hospitality.
Kate Nicholls, chief executive of trade body UK Hospitality, said: “We need to have a plan in place to keep
‘Every measure must be weighed against economic impact. Millions of livelihoods depend on it’
business support measures available for the next six months, at least.
“If you have this announcement of restrictions, without an announcement of existing support, you’ll start to see redundancy notices next week.” British Beer and Pub Association boss Emma McClarkin said that a temporary
VAT cut and business rates holiday should also continue.
She said: “These measures will help brewers and pubs work towards a safe and sustainable recovery and will save hundreds of thousands of jobs.”
Economists warned that new restrictions could derail an economic rebound and cause another slump in GDP, which collapsed 20.4pc between April and June but has since recovered around half of this lost output. Samuel Tombs, at Pantheon Macro, said another closure of consumer services firms would push GDP down to 15pc below pre-virus levels for as long as it lasted, compared to a 5pc shortfall without new restrictions.
Ex-chancellor Sajid Javid warned against more output-sapping interventions. “Every measure must be weighed against economic impact. Millions of livelihoods depend on it,” he tweeted.
Shares in supermarkets and food delivery firms ended the day higher.
Pub chains Marston’s and Mitchells & Butlers fell 15.9pc and 15.4pc respectively, while Wagamama owner The Restaurant Group fell 17.7pc.