Investors face fifth week of market chaos as coronavirus crackdown batters British businesses
Financial markets are braced for their fifth week of turmoil as the City reacts to the latest crackdown on British businesses.
Prime Minister Boris Johnson ordered bars, pubs and restaurants to close at 5.10pm on Friday, after the markets closed.
Government advice to stay home has also sent a wrecking ball through Britain’s high streets with many businesses – including Timpson’s, John Lewis and Arcadia – closing thousands of shops over the weekend.
Ghosttown: A near-deserted Carnaby Street in London on a normally bustling Saturday. Government advice to stay home has also sent a wrecking ball through Britain’s high streets
Yesterday Primark, which also announced store closures, confirmed it had taken the drastic measure of cancelling all outstanding orders to cut costs, devastating many suppliers’ businesses.
The dire outlook for many of Britain’s best-known businesses means the FTSE 100 – which has plunged 32 per cent since mid-January – is likely to face further falls.
Business groups have pleaded with the Government to make emergency cash from grants and loans available immediately to avoid mass staff lay-offs.
Some firms, including Sir Philip Green’s Arcadia group, have already axed staff raising the spectre of spiralling demand and a long-term hit to the economy.
A new report released today by KPMG said the UK economy will shrink 2.6 per cent this year, or 5.4 per cent if the Government’s massive stimulus package does not work.
City tycoon Crispin Odey said he believed the markets had already priced in a recession, and expected a recovery in the stock market by the end of the year.
Experts said the rapidly-changing picture is a minefield for private investors, who were urged to look for companies that had enough cash to survive the onslaught.
The Financial Conduct Authority’s decision to ask companies to delay their financial results until the effects of the outbreak on their business is better understood.
Dozens of the nation’s biggest companies have already ditched guidance this year – an admission that they do not know how bad the situation could get.
AJ Bell investment director Russ Mould said: ‘There will be ripple effects for some time but it depends on how long the lockdown lasts for.’
It is hoped the Government’s stimulus package, announced in the last two weeks, will stave off a long-lasting recession, allowing the UK to return to growth in a ‘V-shaped’ dip.