Bank warning as shares hit by £210bn loss

BY GRAHAM HISCOTT

BANK of England Governor Mark Carney has issued a Covid-19 crisis warning for the economy, as £210billion was wiped off share prices this week in the UK and £5trillion lost on global stock markets.

Carney said the bank had already seen an impact on big firms and supply chains. He predicted this, and a hit to tourism, meant “world growth would be lower than it otherwise would be”. If that happens, a “very open economy” such as the UK’s will be “impacted”.

The FTSE 100 has crashed 215 points to a four-year low of 6580.6, plunging 13 per cent since Monday.

Falling share prices will hit the value of pension funds upon which millions rely, while impacting small investors who own shares or have ISAs tracking the FTSE.

Travel firms were the biggest stock market fallers, with Tui tumbling 8.5 per cent on the FTSE 100 and shares in British Airways owner International Airlines Group falling 8.4 per cent.

Meanwhile oil prices have fallen to just over $50 a barrel, bringing the promise of lower fuel prices and energy bills amid the gloom and uncertainty.

Consultants Capital Economics said the Bank of England could convene an emergency meeting to cut its base rate “if things deteriorate much further”.

Russ Mould, Investment Director at City firm AJ Bell, said: “Companies are already experiencing supply chain problems and the idea that many people might be forced to work from home could impact productivity.

“Shutting schools would compound the problem as parents would have to look after their children and may not be able to work.”