ANALYSIS

INVESTORS may have been slow to appreciate the threat to the global economy from the coronavirus outbreak, but the slump in share prices around the world over the past week indicates growing concern that the damage could match the fallout from the 2008 financial crisis.

If the tens of billions of pounds being wiped daily from the FTSE 100 and other stock markets were not enough, companies such as drinks giant Diageo – which could take a £200million hit to profits this year – and transport food operator SSP Group are starting to spell out in more detail the implications of restrictions on movement. Global air

● travel is set to fall for the first time in over a decade, while the threat to the car industry is potentially devastating.

For not only has China been a key driver of sales, a significant proportion of parts are manufactured there too.

US investment bank Goldman Sachs now believes American companies will see zero earnings growth this year

● Insurance and your rights

If you’ve booked a trip where there is coronavirus, but you don’t wish to travel, check the small print on your insurance policy, airline or holiday booking.

China is indisputable – your travel provider should offer a refund or rearrange a trip elsewhere. However, northern Italy is tricky. The FCO advises because of supply chain disruption and a slowdown in Chinese economic activity.

The timing could not have been worse for many economies already facing a serious downturn, such as Japan, India and Hong Kong. Europe’s powerhouse German economy narrowly avoided recession last year, so it would not take much to tip it over the edge.

There are existing barriers to growth such as the simmering trade war between US and China and tensions between the US and Iran which, while overshadowed by the outbreak, have the potential to further dent business confidence and investment.

● Going on a cruise