Lock­down fears send FTSE into red

Lon­don’s blue-chip in­dex has worst day since June as hos­pi­tal­ity chiefs plead for more govern­ment sup­port

The Daily Telegraph - Business - - Front Page - By Han­nah Ut­t­ley, Tom Rees and Laura Onita

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.

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