Jacob Rees-Mogg’s firm is accused of profiteering from coronavirus economic crisis

Jacob Rees-Mogg’s investment firm is accused of exploiting worldwide market volatility caused by the coronavirus panic to rake in huge profits. 

The MP owns 15 percent of Somerset Capital Management, whose chiefs appear to be investing in businesses hit hard by falling stocks.

Executives have told clients the international crisis is providing a ‘once in a generation’ chance of earning ‘super normal returns’, the Sunday Mirror says.

SCM managers are swallowing up businesses expected to ‘bounce back’ if the world economy recovers. There are potential gains of 500 percent.

Investments include private hospitals in Brazil, pharmacies in South Africa, and a Chinese firm behind a device which checks if people are wearing masks.  

Mark Asquith, an SCM boss, wrote to investors: ‘History has shown us that super normal returns can be made during this type of environment. 

‘Market dislocations of this magnitude happen rarely, perhaps once or twice in a generation, and have historically provided excellent entry points for investors.’ 

It comes as 708 people who tested positive for the coronavirus died yesterday, while the total UK death toll increased to 4,313 in a big 24-hour jump.

Meanwhile, top Western economists have warned that Britain’s lockdown is causing an economic crisis unseen by most alive today.

The International Monetary Fund said the economic downturn could be more severe than that experienced during the 2008 Great Recession.  

A former Bank of England official has also warned that UK unemployment levels could surpass those of the Great Depression in the 1930s. 

As millions of jobs and at least 800,000 businesses are feared to be destroyed within weeks, Labour politicians are accusing Mr Rees-Mogg of profiteering.

Labour leader Sir Keir Starmer said: ‘Nobody should be seeking to take advantage of this crisis. We should all be asking ourselves what we can do for our country and each other.’

Shadow Chancellor John McDonnell called the move ‘sick’, adding: ‘Profit seeking from suffering is nearly as low as you can get. When we come through this we need a tax on profiteers.’ 

Father-of-six Mr Rees-Mogg stood down as a director of SCM to become Leader of the House of Commons. 

He is reportedly worth £100million. 

Owning at least 15 percent of SCM explains how he was entitled to a reported £1million share of last year’s nearly £20million profits.       

SCM was founded in 2007. Mr Rees-Mogg’s office had declined to comment. 

Oliver Crawley, a partner at SCM, said: ‘The human cost of the virus is devastating and we take it very seriously, but our job as investment managers is to remain rational during periods of extreme volatility, in order to carefully invest our clients’ savings and pensions for their long-term security.’

Coronavirus crisis ‘could push unemployment levels in UK and US beyond record numbers of the 1930s Great Depression’

Unemployment caused by the coronavirus crisis could in months be worse than during the 1930s Great Depression, a former Bank of England official has warned.

David Blanchflower said unemployment is rising at the fastest rate in living memory as job losses mount around the world and in the UK.

He warned that there has never been a ‘concentrated business collapse’ on the scale seen in recent weeks as the Government forced all non-essential firms to close.

In March, 10million people in the US applied for unemployment benefits, while in the UK there were grim warnings of the jobless total hitting 2.75million by June.

During the Great Depression, unemployment hit 24.9 percent in the US and 15.4 percent in the UK, over several years. 

But Prof Blanchflower said unemployment in the UK could rapidly rise to more than 6million people – which is around 21 percent of the entire workforce. 

This was based on analysis of US job market figures suggesting unemployment could peak at 52.8million, which is around 32 percent of the workforce.

Prof Blanchflower was a member of the Bank of England’s interest rate-setting monetary policy committee during the financial crisis in 2008.

He wrote in The Guardian: ‘The Government has tried to respond but it has no idea of the scale of the problem it is going to have to deal with.

‘We make some back-of-the-envelope calculations and they are scary.’

Mr Blanchflower, who is now a professor of economics at Dartmouth College in the US, was making his assessment alongside David Bell, an economist at the University of Sterling.

They warned that the collapse in business activity amid the coronavirus lockdown, along with the accompanied rise in unemployment, looked as though it was at least 10 times faster than in the recession following the 2008 financial crisis.