Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Global stock markets are starting the new week firmly on the back foot, as rising Covid-19 cases and US political tensions worry investors.
Stocks have dropped across Asia, with the Hong Kong’s Hang Seng down 1.5% and Australia’s S&P/ASX 200 shedding 0.7%. European markets have just opened lower too.
London’s FTSE 100 has shed over 90 points, or 1.6%, at the open as the prospect of a second national lockdown looms. Travel companies, pub chains, hotel groups and banks are among the top fallers (more on that shortly).
Britain’s top government scientists, chief medical officer Chris Whitty and chief science advisor Patrick Vallance, will warn the public today that the UK has reached a critical point. The UK saw 3,899 new cases and 18 deaths on Sunday.
Witty has warned:
“The trend in UK is heading in the wrong direction and we are at a critical point in the pandemic.
We are looking at the data to see how to manage the spread of the virus ahead of a very challenging winter period.”
London mayor, Sadiq Khan, is meeting council leaders today to discuss whether the capital should introduce more restrictions, to try to curb rising infections.
A new lockdown would hurt travel companies, pub chains and hotels badly (which is why shares in IAG, JD Wetherspoons and Whitbread all fell on Friday)
Cases continue to rise across the globe, with France reporting over 10,000 new infections, Brazil 16,000 and the US around 40,000.
Stephen Innes of Axicorp warns that Europe faces some very difficult months:
Indeed the winter months could prove to be one of the bitterest obstacles of them all as we are only in September, and there are further healthcare concerns in Europe where Covid is on the rise again. In the UK, London’s Mayor Khan is expected to request more wide-sweeping lockdown measures due to the Covid curve moving in the wrong direction.
Another worrying sign for the market is the UK’s chief medical officer Chris Whitty and chief scientific officer Patrick Vallance will give a press conference at 1100 BST. The PM will not be there. The UK media widely reports that they will say that the country is heading in the wrong direction with the coronavirus. The press also notes that the government will this week consider whether and by how far to impose new national social distancing regulations.
Investors are also losing hope that the US Congress will agree fresh emergency aid to help the American economy.
The death of veteran Supreme Court justice Ruth Bader Ginsburg has sparked a huge political battle over whether President Trump should nominate her successor, or whether such a crucial decision should wait until November’s election.
Republicans (who blocked Barack Obama’s pick in 2016) are determined to move swiftly this time – making it harder to agree bilateral cooperation for a new stimulus package.
We’ll also hear from the eurozone’s top central banker, Christine Lagarde today, as well as the latest economic outlook from Germany’s central bank.
- 11am BST: German Bundesbank’s monthly report
- 1.45pm BST: European Central Bank president Christine Lagarde addresses the Franco-German Parliamentary Assembly