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Coronavirus latest: India to impose lockdown on nation of 1.4bn

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UAE brings forward airport closures

Simeon Kerr in Dubai reports:

The United Arab Emirates has brought forward the suspension of passenger aviation by 24 hours to Tuesday night.

Dubai and Abu Dhabi airports said they would be closed to inbound, outbound and transit traffic from 23:59 local time on March 24 for a renewable period of two weeks, rather than from Wednesday night as previously announced. Cargo and emergency evacuation flights will continue.

The decision, which is set to leave many passengers stranded in the UAE, came after the number of coronavirus cases in the Gulf state spiked on Monday to 198.

The authorities earlier on Tuesday announced that visitors left stranded by border closures would be allowed to stay in the country legally.

Platinum price jumps after South Africa orders mining industry to close

Neil Hume in London

The price of platinum and sister metal palladium jumped sharply on Tuesday after South Africa ordered its mining industry to close for 21 days to help contain the spread of coronavirus.

South Africa produces around three quarters of the world platinum and almost 40 per cent of its palladium, metals used to reduce harmful vehicle emissions.

Both have suffered over the past month as big automakers have closed plants and new car sales have plummeted. Platinum was down by as much as 30 per cent and palladium, which hit a record high above $2,800 a troy ounce earlier this, down more than 40 per cent.

But they rallied sharply on Tuesday, with platinum up 7 per cent to $685 and palladium rising 10 per cent to $1,900.

South Africa’s lockdown is due to come into force on Thursday and it is not yet clear if the mining industry will be granted some form of exemption.

In a statement the Minerals Council of South Africa, which speaks for the country’s industry, said it was engaging with senior members of the government over the precise details of the lockdown.

“The Minerals Council is also exploring what will be required to prevent the lockdown leading to permanent damage of the industry. There are marginal and loss making mines that would likely be unable to reopen should they be required to close fully, without remedial measures,” it said.

Miners with the most exposure to South Africa are Anglo American (50 per cent of earnings before interest, tax, depreciation and amortisation), South32 (18 per cent), Glencore (5 per cent) and Petra Diamonds (90 per cent).

German carmakers losing nearly €400m a day after plant closures

Joe Miller in Frankfurt

Germany’s three big carmakers — Volkswagen, Daimler and BMW — are faced with fixed costs amounting to almost €400m a day, after they were forced to close plants in Europe and beyond due to coronavirus.

“It’s a rather conservative estimate, even with the German government’s compensation for furloughed employees,” said professor Ferdinand Dudenhöffer, an auto industry analyst at the University of St Gallen, who compiled the data.

“According to our estimate, depreciation, interest and rental costs amount to 15% of the turnover of the car manufacturers, and these continue even when there are no sales,” he added.

Earlier on Tuesday, German auto supplier Schaeffler scrapped its outlook, saying that the economic effects of Covid-19 on the auto industry could not be reliably estimated.

The move comes after Volkswagen’s chief executive Herbert Diess warned on Saturday that the company’s shutdowns — which include its production headquarters in Wolfsburg — is likely to last for longer than the two weeks initially announced.

However the company’s Chinese production sites are largely back up and running, and Mr Diess said deliveries in March were “beginning to normalise”.

Premier Inn owner to lay off staff and cut dividend

Alice Hancock reports:

Whitbread, the owner of Premier Inn, is preparing to lay off a “significant number” of its staff and will cut its dividend this year as it closes its hotels following the UK government’s announcement that the country is in lockdown.

The FTSE-100 company said that it will begin closing its hotels in the UK and Germany “with immediate effect”. It also plans to cut all capital expenditure, refurbishment plans and staff recruitment in a bid to save cash.

Hotels close to hospitals could be used to put up frontline NHS staff, the company said, depending on the outcome of current discussions with the government.

Best Western, Hilton and InterContinental are also in talks with the government to turn a number of hotels into hospitals or hostels for staff. InterContinental has already made 300 rooms available to help London’s homeless self-isolate should they need to.

‘We’re not slowing it’, Cuomo says as New York infection rate soars

Joshua Chaffin in New York

New York Governor Andrew Cuomo warned that the rate of new coronavirus infections in the state was now doubling every three days in spite of a lockdown that was imposed to slow its spread.

“We’re not slowing it, and it’s accelerating on its own,” Mr Cuomo said, warning that New York would now require even more hospital beds and sooner than expected.

“That is a bad combination of facts,” the governor said in a briefing.

New York’s caseload has now risen to 25,665 cases, according to Mr Cuomo, nearly 10 times California’s roughly 2,800.

“New York is the canary in the coal mine. New York is going first. We have the highest and the fastest rate of infection,” he said, predicting the state would reach its peak caseload in just 14 days.

The governor also pleaded with the federal government to urgently release its stock of 20,000 ventilators.

US stocks extend gains, S&P 500 rises 7%

Wall Street extended its gain on Tuesday with the S&P 500 rising more than 7 per cent after House speaker Nancy Pelosi said a deal on a US stimulus package was around the corner.

The S&P 500 climbed as much as 7.2 per cent in a broad-based rally. Energy led the way with gains of 11.7 per cent, while materials climbed 10 per cent. Meanwhile the Nasdaq Composite rose 5.5 per cent.

The CBOE’s Vix index, a measure of expected swings in the S&P over the next 30 days and dubbed Wall Street’s ‘fear gauge’, fell 5.6 points to 55.95, having last week climbed to an all-time high of 85.47.

The rebound in stocks came amid growing optimism the Trump administration and lawmakers were nearing a $2tn deal aimed at cushioning the economy from the fallout of the coronavirus pandemic.

“It would not be surprising to us to see a counter trend rally over the next couple of weeks because the market is very oversold and we expect to see some quarter end portfolio rebalancing back into equities,” Jeff Schulze, strategist at ClearBridge Investments, said. However, he said markets could test lows again over the course of the next month as investors try to determine how widespread the virus is in the US.

Elsewhere in markets, the yield on the US 10-year Treasury rose 3.5 basis points to 0.821 per cent. Yields move inversely to price.


India to impose nationwide lockdown

Amy Kazmin in New Delhi

Indian Prime Minister Narendra Modi has announced that the country’s national lockdown will continue for the next 21 days, and appealed to the country’s 1.37bn people to remain indoors to prevent the deadly pathogen from “spreading like wildfire”.

Mr Modi said that the next three weeks were critical for India to prevent an outbreak that would “set the country back 21 years”.

“In the next 21 days, do just one thing: stay at home,” he said. “You will invite a grave pandemic in your homes if you step out.”

Mr Modi announced that the government has allocated $1.9bn to strengthen India’s health infrastructure, including acquiring more personal protection equipment, isolation beds, ventilators, and training of medical personnel.

He said the government was working to ensure the supply of essential products, such as food, milk, medicines and other items, would remain available during the extent of the lockdown. Many have expressed concern that the rapid imposition of a severe lockdown in the country could lead to the breakdown of food supply chains that support the population of India’s vast cities.

Much of the country had been ordered to go under lockdown, but many Indians have treated the closure of all work places as a holiday, hanging around in large groups with other people.

India’s coronavirus caseload has risen rapidly over recent days, and crossed 508, of whom 39 have been cured, and 10 have died.

Mexican brewer Grupo Modelo to donate 300,000 bottles of sanitiser

Jude Webber in Mexico City

Mexican brewer Grupo Modelo will donate 300,000 bottles of antibacterial gel produced using alcohol extracted during the production of its Corona Cero (Zero Corona) brand to the state social security institute to help in the fight against the spread of coronavirus.

Health officials earlier announced Mexico had entered the local contagion phase of the epidemic, and has 367 confirmed cases and four deaths.

Corona is Mexico’s leading beer. Grupo Modelo is part of global brewer Anheuser-Busch InBev and owns the brands everywhere in the world except the US, where the brands belong to Constellation Brands.

Mexican president Andrés Manuel López Obrador dealt Constellation Brands a major blow when he said he would respect the results of an informal people’s poll conducted last weekend which overwhelmingly voted against a $1.4bn plant in the northern city of Mexicali that the company has already 65 per cent built.

Constellation Brands said in a statement on Tuesday that it would seek to negotiate with the government. “We reiterate that our project in Mexicali, like all our operations, complies with and has complied with all legal requirements and prioritises the care and availability of water for everyone,” it said. “Mexico is very important for us. We have had a positive and mutually beneficial relationship with the country for more than 30 years and we have faith that will continue unchanged.”

Italy case numbers may be 10 times reported levels

Miles Johnson in Rome reports:

Italy may have 10 times the number of Covid-19 cases than appear in its official reported numbers, according to the head of the country’s civil protection agency, suggesting more than half a million Italians have been infected with the virus so far.

Angelo Borrelli, who is in charge of co-ordinating the national response to the outbreak, said it was possible that nearly 640,000 people across the country could be infected, based on a ratio of the true number being 10 times higher than the cases that have been diagnosed through testing.

“A ratio of one certified case out of every 10 is credible,” he told La Repubblica, the Italian daily newspaper. As of Monday, Italy had 63,927 officially diagnosed cases and 6,077 dead from virus.

The high proportion of deaths compared with diagnosed cases is far higher than other large European countries so far, and has led many experts to conclude that Italy’s total number of cases must be significantly higher than those reported.

Citigroup to temporarily close 10% of US branches

Laura Noonan in New York

Citigroup will temporarily shutter between 10 and 15 per cent of its 700 US branches by the end of the week, and reduce hours in others, in the latest example of a US bank pulling back from Main Street as the coronavirus crisis escalates.

A person familiar with the situation told the FT that Citi had already noticed declining footfall in its branch networks as “clients and communities increasingly self-isolate”.

“To best meet our changing customer needs, we have begun to temporarily close branches where and when it makes sense”.

Citi is routing clients to nearby branches and redeploying its people. Staff will be paid for their regular hours.

The Citi branches that stay open will only operate from 10am to 4pm Monday to Friday and 10am to 1:30pm on Saturday.

JPMorgan Chase last week said it would close around 20 per cent of its branches, while Bank of America is cutting back hours.

London’s ExCel centre poised to become temporary hospital

Helen Warrell in London

London’s ExCel conference centre “within days” is to become a temporary hospital, according to defence officials who are working with the National Health Service.

The makeshift 500-bed hospital is the first to be set up across the country, ahead of an expected influx of coronavirus patients as the outbreak spreads.

The ExCel venue, a cavernous facility in London’s Docklands that could eventually accommodate up to 4,000 beds, will be run by the NHS with military personnel providing logistics support to get the hospital running, one defence official said.

Military planners first visited the ExCel site with NHS staff at the weekend. The hospital is now in the process of being set up and could be operational “within days”, the official said.

This is the latest in a series of deployments by the military’s “Covid Defence Force”, which has 20,000 personnel on standby within 24 hours and a further 1,500 within 48 hours.

About 700 have been mobilised for a range of activities from supplying PPE equipment to hospitals to helping local resilience forums with logistics in delivering food and medicine to vulnerable people.

Oil producing nations asked to help promote global stability by G7 finance heads

Anjli Raval in London

G7 finance ministers and central bank governors called on oil-producing countries to “support international efforts to promote global economic stability”.

The remarks present a veiled dig at producer nations including Saudi Arabia that plan to flood the market with crude despite the industry seeing a collapse in demand for oil amid the coronavirus outbreak.

G7 major economies have pledged to do “whatever is necessary” to stabilise a global economy shaken by the pandemic, with leaders pledging to co-ordinate recovery plans in the face of a possible worldwide recession.

“We will do whatever is necessary to restore confidence and economic growth and to protect jobs, businesses, and the resilience of the financial system. We also pledge to promote global trade and investment to underpin prosperity,” the ministers said in a statement on Tuesday.

Work on crossrail put on hold indefinitely

Gill Plimmer reports:

Work on the capital’s new Crossrail trainline and all Transport for London projects have been halted as a result of the coronavirus lockdown.

Mike Brown, commissioner for Transport for London, said that the capital’s transport authority would be bringing “all project sites to a temporary Safe Stop unless they need to continue for operational safety reasons”. It means that the troubled £18.25bn train line will almost certainly not be finished by its target date of summer 2021.

The decision came following the prime minister’s decision to put the rest of the country in lockdown, with all non-essential shops shuttered and significant limits introduced on gatherings and the movement of citizens.

Work on most building sites and large infrastructure projects such as the new HS2 railway line is continuing after Michael Gove, the cabinet office secretary, told LBC radio this morning that “construction in the open air can continue”.

However, the industry is divided over site closures and some construction companies are making their own decisions to stop work.

López Obrador proposes paid leave for elderly, cheap loans for small business

Jude Webber in Mexico City

Mexico’s President Andrés Manuel López Obrador said he would sign a decree so that elderly people employed in the public and private sectors could take paid leave, with all their benefits, during the coronavirus crisis and would soon be announcing 1m interest-free or low-rate loans to help small businesses.

“[Telecoms magnate] Carlos Slim sent me word that he is committing not to fire any worker. I ask all businesses to show solidarity,” he said. Alsea, which runs restaurant chains including Starbucks and Burger King, caused a storm last week by inviting invited its workers to take unpaid leave.

Mr López Obrador said that “when the time comes, we’ll grant interest-free or very low-rate loans to 1m small businesses,” including workshops and taco shops, but gave no further details.

To soften the Covid-19 impact, he added that “we have extra funds we can use, of around 400bn pesos ($16bn) … this will enable us to maintain welfare programmes … all of them”.

He said tax revenues had been good and doubled down on his priority infrastructure projects, including an $8bn refinery, saying “all this will enable us to create jobs”.

Economists do not share his optimism and see the oil price fall and coronavirus emergency hitting Mexico’s economy hard. They are pencilling in a contraction in gross domestic product of as much as 5 per cent this year.

UK tells airlines they will only receive support after other options are exhausted

Jim Pickard, Nikou Asgari and Peggy Hollinger in London

Exclusive: The Treasury has just sent a letter to aviation companies warning them they will only receive “bespoke support” from the government after all other options have been exhausted.

The decision will bitterly disappoint the aviation industry which is running critically short of cash as countries crackdown on international travel.

In the letter – which has not been released to the public – the government points out there are already several schemes available to help companies. Last week chancellor Rishi Sunak revealed a package of measures to pay for staff wages, defer VAT and delay tax payments.

Mr Sunak also announced a £330bn package of loan guarantees to enable banks to lend to companies. However, the government is aware that these loans will not be available to all aviation companies because applicants need to be “investment grade”.

For aviation companies ineligible for those loans, the government is prepared to offer “bespoke support” in some cases, but only when all other options have run out, the letter sets out.

The government believes many companies in the aviation industry should turn to shareholders and bank loans for support before seeking a rescue by taxpayers. In private, ministers have not ruled out the idea of taking equity stakes in some airlines – where necessary – to prevent the collapse of otherwise viable companies.

The chairman of Virgin Group last week urged the government to provide up to £7.5bn of emergency state support to rescue the UK aviation industry, which has been decimated by the coronavirus pandemic.

Russian airports call for state support to prevent ‘coming collapse’

Max Seddon, Moscow Correspondent, reports:

Russia’s major airports are asking the Kremlin for state assistance to prevent what they say is the “coming collapse” of the airline industry.

Russia’s International Airports Association, which accounts for 70 per cent of total Russian passenger traffic and includes Moscow’s Sheremetyevo airport – home to the country’s few remaining international flights – says airports could be forced to default on their loans and lay off staff en masse if they do not get a list of requested subsidies from prime minister Mikhail Mishustin, according to a letter published on the association’s Telegram channel.

The airports want Russia to guarantee airlines’ payment obligations to the end of the year and free airports from paying rent or dividends to the state. The association also asked the Kremlin to compensate airports for financial losses, help them restructure loans, and give them tax benefits.

Russia’s transport ministry said last week that several of the country’s airlines risked bankruptcy after Moscow banned nearly all international flights bar a select few run by state flag carrier Aeroflot. Domestic flights are still running but have dropped “disastrously,” according to the airport association.

Pelosi says deal on US stimulus package is around the corner

Lauren Fedor in Washington reports:

There is “real optimism” that lawmakers on Capitol Hill can strike a deal “in the next few hours” on a nearly $2tn stimulus package for the US economy which has been ravaged by the spread of the novel coronavirus, Democratic Speaker of the House Nancy Pelosi said on Tuesday morning.

“I think there is real optimism that we could get something done in the next few hours,” Ms Pelosi told CNBC, as Mitch McConnell, the Senate’s top Republican, met Treasury secretary Steven Mnuchin, who is negotiating on behalf of Donald Trump and the White House.

Mr Trump weighed in on Twitter on Tuesday, saying: “Congress must approve the deal, without all of the nonsense, today. The longer it takes, the harder it will be to start up our economy. Our workers will be hurt!”

Mr McConnell and Mr Mnuchin have been wrangling with Chuck Schumer, the Senate’s most senior Democrat, since Friday over Republicans’ proposals for a massive stimulus, which would include bailouts for large companies hit by the spread of the coronavirus, such as airlines, and means-tested “helicopter money” for US taxpayers.

Democrats have argued that the Republican’s plans are too generous to big business, and on Monday Ms Pelosi introduced a separate $2.5tn bill, drafted by House Democrats.

US business activity contracts sharply in March

US business activity contracted sharply in March as the economic fallout from the coronavirus pandemic deepened.

The IHS Markit flash composite purchasing managers’ index fell to 40.5, from 49.6 the previous month.

The index of services business activity fell to 39.1, missing expectations for 42, according a Reuters survey of economists. Meanwhile, the manufacturing PMI edged lower to 49.2, but exceeded expectations for a reading of 42.8.

A reading below 50 indicates the majority of businesses reported a deterioration compared with the previous month. The flash PMI figures are based on about 80 per cent of responses.

“The overall decline was the steepest recorded since comparable survey
data were available in October 2009, and reflected widespread falls in activity across the manufacturing and service sectors,” IHS Markit said.

US stocks rally in wake of Fed stimulus and rescue deal hopes

US stocks jumped on Tuesday morning, with investors continuing to process huge moves by the Federal Reserve to support the US economy and hope both sides of Congress can agree a rescue deal to help businesses and individuals.

Also providing some hope for countries now experiencing rocketing infection rates, the Chinese government will begin to relax restrictions on travel to and from Hubei province, where the coronavirus originated from.

The S&P 500 leapt 5.2 per cent shortly after the opening bell, while the Nasdsaq Composite jumped 5 per cent.

With a relief rally taking hold, investors shifted away from the relative safety of government debt, pushing yields on bonds higher. The yield on the benchmark 10-year US Treasury was up 6.2 basis points to 0.85 per cent.

Netherlands reports biggest daily increase in cases

Mehreen Khan in Brussels reports:

The Netherlands has recorded its single biggest jump in deaths from the coronavirus — a day after the government announced sweeping new curbs on movement.

Official figures show 63 new fatalities from the virus in the last 24 hours and 811 new cases. That takes the total death toll to 276. The government said all victims have been between the ages of 55 and 97.

The Netherlands has avoided imposing a full lockdown to contain the virus but yesterday imposed strict fines for people breaking social distancing rules and banned all meetings until June 1.

The total number of cases in the country has hit 5,560.

Ford teams up with 3M and GE Healthcare on ventilator production

Claire Bushey in Chicago reports:

Ford is working with US manufacturers 3M and GE Healthcare to scale up respirator manufacturing and to simplify a ventilator design so the machines can be produced in greater numbers.

The company has been working for four days on what it dubbed internally “Project Apollo”, after the US space mission Apollo 13, when NASA engineers strove to repurpose equipment on a malfunctioning spaceship to safely return astronauts to Earth.

Engineers from the automaker are collaborating with 3M on a new design for 3M’s powered air-purifying respirators. The design uses parts from both companies, including fans from the F150 truck that cool seats and battery packs from 3M’s portable tools to power the respirators for eight hours.

The design modification allows 3M to expand its supply chain base. Jim Baumbick, Ford’s vice president for enterprise product line management, said that with Ford’s factories shut down because of the pandemic the company could divert parts for use by the Minnesota manufacturer.

Ford is also working with GE Healthcare to simplify the design and expand production of the latter company’s existing ventilator, which could eventually be produced at a Ford site. But the partnership requires sign-off from the US Food and Drug Administration. Tom Westrick, GE Healthcare’s vice president and chief quality officer, said the company is navigating the new, accelerated approval process.

UK government working ‘at pace’ on support package for self-employed

Jim Pickard in London reports:

Stephen Barclay, chief secretary to the Treasury, said the British government was working “at pace” on drawing up the package of support for self-employed workers as MPs warned that many were facing financial catastrophe because of the pandemic shutdown.

“Further help is coming but we have to get this right and target it on those who are most in need,” Mr Barclay told the House of Commons. “The chancellor will provide an update … in the coming days … the devil will be in the detail of the delivery.”

Amid growing pressure for action – from MPs of all parties – Mr Barclay pointed out that there would be political concerns if the government ended up subsidising wealthy people or those who could continue to work. He also reminded MPs that HM Revenue & Customs does not have the bank details of people and its data is 18 months old.

By contrast it was easier to set up a system of payments for employees because the government has access to bank details via the PAYE system, he said.

John McDonnell, shadow chancellor, said Labour would work with the government to make sure the scheme is set up and delivered as soon as possible. At the very least ministers should set a deadline for action so that MPs could reassure their constituents, he said.

Norway’s unemployment rate hits highest since WWII

Richard Milne in Oslo

Norway’s unemployment rate has more than quadrupled in the past two weeks to reach its highest level since the second world war as the coronavirus outbreak and plunge in oil prices tests western Europe’s largest petroleum producer.

The number of unemployed has jumped from 65,000 on March 10 to 291,000 on Tuesday, resulting in an unemployment rate of 10.4 per cent, according to Norway’s labour and welfare administration (Nav).

“This is the highest unemployment rate in Norway since the second world war,” said Sigrun Vageng, director of labour and welfare at Nav.

The unemployment rate has effectively doubled in each of the past two weeks with 142,000 joining the ranks of the jobless in Norway in the past seven days.

Norway’s currency has plummeted to record lows against the US dollar and euro while the government and central bank have unveiled billion-krone rescue packages for the economy and companies.

BoE admits coronavirus disruption worse than stress test scenario

Matthew Vincent in London reports:

A Bank of England committee has admitted that the initial impact of coronavirus disruption on the financial sector will be worse than envisaged in the last UK bank stress tests.

In a summary of its last two emergency meetings, the UK central bank’s Financial Policy Committee said on Tuesday: “The disruption from Covid-19 would likely be more severe than the stress test in the first phase.”

In its 2019 test, the Bank of England’s adverse scenario envisaged a global recession, with “sharp falls in UK asset prices”, and a 30 per cent depreciation in sterling, leading to higher inflation.

However, the FPC said the impact of coronavirus on UK banks would “ultimately be less protracted and lead to less output loss overall over the course of two years” than imagined in the test.

It also noted that the big UK banks have “Tier 1” capital levels that are three times higher than before the global financial crisis, and UK households and companies still had undrawn borrowing facilities of around £140bn and £260bn respectively. A Bank of England decision to release the “buffer” capital that lenders must normally hold would support up to £190bn of bank lending to businesses, the committee added – which is 13 times the net lending to businesses last year.

Last week, the FPC agreed to cancel the 2020 UK bank stress test to help lenders focus on meeting customer needs during the economic crisis.

Aston Martin, McLaren and Lotus shut plants

Peter Campbell, Motor Industry Correspondent, reports

Aston Martin, McLaren and Lotus have all closed their plants following UK government orders of a nationwide lockdown.

They were the last remaining facilities open in Europe, after major manufacturers from Volkswagen to Toyota shuttered facilities last week in attempts to contain the spread of the coronavirus and also because of falling demand and disruption to their supply chains.

Luxury and supercar manufacturers have been less affected, partly because demand has remained stable, and also because they are able to hold more parts stock, and have workers spaced further apart than in high-volume production sites.

The UK’s luxury carmakers owned by international groups – such as VW’s Bentley or BMW’s Rolls Royce – had already closed last week, while Ferrari and Lamborghini were both forced to close their sites in Italy after the spread of the disease in the country.

Lotus told staff on Monday evening, in the wake of Prime Minister Boris Johnson’s announcement that everyone bar crucial workers must stay at home, that its site will close.

McLaren’s announcement came on Tuesday morning, while Aston Martin’s announcement was made around lunchtime.


Estimated hit to airlines revised upwards to $250bn

Peggy Hollinger, International Business Editor reports:

The world’s airlines face losing more than $250bn in revenue — a more than 40 per cent fall on 2019 — due to the crackdown on travel as countries fight against the spread of the coronavirus.

The forecast is the third estimate in less than a month from Iata, the global trade body, which only days ago estimated the hit at $113bn — already a revision of the initial $30bn expectation at the start of the crisis.

The difference is a dramatic extension of travel restrictions in recent days covering roughly 98 per cent of passenger revenues, said Brian Pearce, Iata’s chief economist. Capacity was expected to be about 90 per cent down in Europe. A number of airlines in the region could be vulnerable to collapse.

The announcement comes as Ryanair, Europe’s biggest low cost airline, grounds its entire fleet from today and as governments consider rescue packages for the aviation industry. The UK is expected to unveil its package, possibly as early as Tuesday.

Mr Pearce said the industry faces a slower recovery than had been experienced in previous pandemics.

We have never seen a pandemic coincide with a deep global recession, which is now expected … it will almost certainly … delay recovery. It will be a much more gradual slope.

Saudi Arabia reports first death

Ahmed Al Omran in Riyadh writes:

Saudi Arabia announced its first death from the coronavirus as the kingdom reported a jump in cases on Tuesday.

A health ministry spokesman said a 51-year-old man from Afghanistan with pre-existing conditions died after visiting the emergency room of a hospital in the holy city of Medina with advanced symptoms.

Saudi Arabia reported 205 new cases on the first day after imposing a night-time curfew, bringing the total number of cases in the kingdom to 767.

UK spending review delayed with no date set

Sebastian Payne in London

The UK’s comprehensive spending review, due to take place this autumn, has been delayed due to the coronavirus outbreak, the chancellor said at the cabinet’s weekly meeting.

The next spending round, which sets the budget for Whitehall departments for the next three years, was due to follow Rishi Sunak’s first Budget that he gave two weeks ago. It was expected to loosen the Treasury’s fiscal rules to allow the government to increase spending. No new date has been set.

The government remains “focused on responding to the public health and economic emergency”, Mr Sunak told the cabinet on Tuesday.

Chris Whitty, chief medical officer, updated ministers on the virus outbreak and Boris Johnson reiterated that it was “vital that the public followed the instructions issued by the government on the need to stay at home”.

Tuesday’s meeting was the first time that the cabinet gathered virtually. Four people were present in Downing Street: the prime minister, health secretary Matt Hancock, cabinet secretary Mark Sedwill and Professor Whitty. Other ministers joined the meeting through Zoom, a popular secure video conferencing service.

Moscow mayor warns Russian cases higher than statistics show

Henry Foy in Moscow reports:

Moscow’s mayor has warned Vladimir Putin that Russia’s low coronavirus case count does not tell the full picture, telling the president that “a serious story is unfolding”.

Russia announced 57 new cases on Tuesday to take its total to 495, far lower than other major European countries. Its official statistics have drawn scepticism from some experts who question its methodology and scale of testing.

“We see that quite a lot of people are at home, who came from abroad, they are simply not tested,” Sergei Sobyanin told Mr Putin at a meeting of senior officials. “But really [the number of] those who are sick – it is much more.”

“All regions [of the country] without exception, regardless of whether they have patients, no patients, everyone needs to prepare,” he said.

Poland imposes sweeping restrictions on movement

James Shotter in Warsaw reports:

Poland has ratcheted up its restrictions on movement and gatherings in an effort to slow the accelerating spread of coronavirus.

Poland’s prime minister Mateusz Morawiecki said that under the new rules, which will apply from today until April 11, people would only be allowed to leave their homes for essential work, visits to the doctor or pharmacy, to buy food, or to walk the dog.

Gatherings of more than two people will be banned, although families who live together will be excluded, and the ban does not prevent people from travelling to help relatives in need.

Mr Morawiecki told an online press conference:

We are taking this decision to buy ourselves time … We are buying time for all of us, to prepare the health system better … to prepare the next hospitals for all eventualities.

Mr Morawiecki said that Poland would also introduce “electronic measures” to ensure that people were abiding by quarantines.

Poland was one of the first countries to close its borders, limit gatherings and order non-essential shops to close. But in recent days, other countries, such as the UK and Germany, have gone further in limiting gatherings, and Poland’s move brings it in line with such countries.

Olympics should be postponed by a year, Abe says

Leo Lewis and Kana Inagaki in Tokyo

Prime Minister Shinzo Abe has proposed to the International Olympic Committee that the Tokyo 2020 games be postponed by one year, ending weeks of mounting criticism and marking the first time the event has been called off during peacetime.

Mr Abe suggested the delay during a lengthy phone call on Tuesday with IOC president Thomas Bach. The proposal will be discussed at a meeting of the IOC’s executive board later on Tuesday.

“In order to ensure that athletes can play under the best conditions and to make it a safe Games for the audience, I have proposed that (the IOC) consider an approximate delay of one year,” Mr Abe told reporters after the call, adding that Mr Bach “agreed 100 per cent” with his suggestion.

In light of the spread of the coronavirus infections worldwide, Mr Abe said it would be difficult to carry out the event by the end of the year.

“We agreed that the Tokyo Olympics and Paralympics would be carried out by the summer of 2021 at the latest,” he said. “We will firmly carry out our responsibilities as a host nation.”

888 revenues jump as punters shift to online gambling

Alice Hancock, Leisure Industries Correspondent, reports:

Shares in the online gambling company 888 jumped 34 per cent in lunchtime trading in London, after the company said that average daily revenue in 2019 was 18 per cent ahead of the previous year and that customers turning to online poker and casino would offset some of the losses incurred by the lack of betting on sports events.

Several betting companies including Flutter, the owner of Paddy Power, and GVC, owner of Ladbrokes Coral, have warned that the mass cancellation and postponement of sports events would hit earnings by up to £150m this year.

However, 888 is less exposed to sports than its two larger rivals. Its sports brand accounted for 16 per cent of revenues last year compared with a 78 per cent reliance on sport at Flutter.

888 estimated that the potential impact of sports cancellations would be “up to high single digit millions of dollars”.

It also warned that with “people spending more time at home and with potentially increased stress from economic uncertainty”, gambling companies would have to be more vigilant to gambling harm.

US stock futures signal higher open on Wall Street

US stock futures hit their upper trading limit on Tuesday signalling Wall Street was set to rebound at the open.

S&P 500 futures jumped 5 per cent to hit their upper trading limit and were recently up 4.1 per cent. Nasdaq 100 futures were up 3.9 per cent.

US equities declined on Monday after Democrats blocked an almost $2tn economic stimulus package for the second time. However, reports that an agreement was close helped boost optimism on Wall Street on Tuesday.

Sentiment was also boosted by the Federal Reserve’s latest effort to bolster the economy, after the central bank pledged to buy government bonds in unlimited amounts.

Markets in Europe and Asia advanced with the Stoxx 600 up 4.6 per cent and the FTSE 100 up 4.2 per cent. Meanwhile, the CSI 300 climbed 2.7 per cent and the Hang Seng increased 4.5 per cent in overnight trade.

GM follows rival Ford as it draws $16bn credit facility

Peter Campbell, global motor industry correspondent

General Motors is drawing its $16bn credit facility as it looks to shore up finances while its heartland car plants are closed in North America.

“This is a proactive measure to increase GM’s cash position and preserve financial flexibility in light of current uncertainty in global markets resulting from the Covid-19 pandemic,” the company said on Tuesday.

The funds will supplement the company’s strong cash position of approximately $15bn to $16bn expected at the end of March.

The carmaker withdrew its financial guidance for the year, the latest business to cancel its outlook because of the uncertainty about when its operations will, if ever, return to normal.

Ford last week drew its $15.4bn facility and scrapped its dividend to preserve cash.

GM, Ford and Fiat Chrysler last week closed their plants across North America. Every plant in Europe has also closed, although GM exited that market several years ago.

GM chief executive Mary Barra said: “We are aggressively pursuing austerity measures to preserve cash and are taking necessary steps in this changing and uncertain environment to manage our liquidity, ensure the ongoing viability of our operations and protect our customers and stakeholders.”

Iran orders public sector employees to return to work

Monavar Khalaj in Tehran reports:

Iran’s president Hassan Rouhani has said that the public sector should resume work as state-run organisations reopened on Tuesday.

Of the government’s 2.5m employees, about 1.2m working in education and related fields have been operating on a limited basis or not at all as schools and universities remain closed. They will continue to do so until educational institutions reopen in early April. Those in “sensitive jobs” such as doctors have continued to work.

But Mr Rouhani said on Tuesday that a third group of government employees who have not been working in recent days due to public holidays should return to work in shifts. “Each time one-third of them should do the job and the remaining two-thirds could be on leave,” he said.

This group — roughly 500,000 in number — includes the employees of some banks or staff of different ministries such as telecommunications and the foreign ministry.

The president’s comments came as the country celebrated the New Iranian Year on March 20. Despite appeals by officials for Iranians to stay home, about 8.5m Iranians travelled for vacations.

A health ministry spokesperson told reporters on Tuesday that the Islamic republic was set to begin a new plan to further restrict social contacts between Iranians, with details to be released either today or tomorrow.

Iran’s health ministry said on Tuesday that fatalities reached 1,934 from 1,812 on Monday while 24,811 individuals tested positive.

ArcelorMittal says Ukraine lockdown risks triggering ‘disaster’

Roman Olearchyk in Kyiv reports:

ArcelorMittal, Ukraine’s top investor and owner of the country’s largest steel mill, is urging the country’s government to stop short of declaring a state of emergency.

The company said it was “really worried about the possible toughening of restrictive measures”, which could happen in a vote in parliament on Thursday.

ArcelorMittal said:

If the work of the majority of large companies in the country is stopped, [if] business is deprived of its sales channels, it will become a social disaster. Millions of Ukrainians risk losing jobs fast, and the budget can lose a large part of its income.

Exports of steel, agriculture commodities, foods and programmed software account for the lion’s share of Ukraine’s hard currency earnings.

Though ArcelorMittal stands to lose in case of a full shutdown of its Ukrainian steel factory, its concerns are shared by many in the broader foreign investment and business community.

On Monday, the Kyiv-based European Business Association and other lobby groups said a full shutdown would mean “millions of Ukrainians will lose their jobs”.

Pakistan texts high-risk citizens in ‘corona alert’ messages

Farhan Bokhari in Islamabad

Pakistan’s health officials are texting high-risk citizens to adopt precautionary measures immediately as cases rise more than 11 times higher than a fortnight ago, a government official said.

Pakistani troops meanwhile fanned out across the country on Tuesday to support the civilian administration in enforcing a lockdown.

The “corona alert” messages, in English and urdu, advise mobile phone owners who have been picked by the history of their use and visits to locations where cases of coronavirus have been detected.

Six people have died from the virus while cases have risen to more than 890.

The use of mobile phones to track high-risk users has been adopted by other countries as the spread of the virus has overwhelmed healthcare officials.

Chevron slashes spending and halts share buybacks

Derek Brower, US energy editor, reports:

US oil producer Chevron is making sweeping cuts to its spending plans for this year and will ditch its share-buyback programme, the latest supermajor to retreat in the face of collapsing oil prices and the coronavirus hit to global crude demand.

Capex will fall by $4bn, or 20 per cent, to $16bn with reductions across the portfolio, the company said. On an annual run-rate basis, the reductions in upstream spending imposed now will equate to a 30 per cent drop compared with the budget announced in December. The $5bn annual share buy-back programme would be suspended, it said.

Chevron said it would “continue to execute” plans to reduce operating costs by more than $1bn by the end of the year.

Half of the capex cuts will be made in the US’s prolific Permian shale, which three weeks ago Chevron made the centrepiece of a growth strategy that would have delivered $75bn to $80bn in payments to shareholders over the next five years.

Although Chevron said total production would be roughly flat this year compared with 2019, its Permian oil output will be 20 per cent, or 125,000 b/d, below guidance by the end of 2020.

Chevron chief Mike Wirth said the company’s spending cuts would allow it to “preserve cash, support our balance sheet strength, lower short-term production, and preserve long-term value”.

Like other oil producers, Chevron has been battered by a halving of the oil price since early January. Its shares have fallen by about 55 per cent since the start of the year. Total and Shell both announced capex cuts and share buy-back suspensions yesterday.

Ryanair offers use of aircraft for emergency transport

Peggy Hollinger in London reports:

Ryanair, Europe’s biggest low-cost airline, has offered its aircraft to EU governments for emergency transport of people and goods as it grounds its fleet for two months in the wake of restrictions on international travel.

The group, which has more than 300 aircraft in its fleet, said it would also work with European authorities to return stranded passengers despite the grounding as governments battle the spread of the coronavirus. But these would be minimal and take place under strict hygiene conditions.

“At this time, no one knows how long this Covid shutdown will last,” said Ryanair’s chief executive Michael O’Leary.

The experience in China suggests a 3-month period for the spread of the virus to be contained and reduced. We will do everything we can to keep our aircraft, our crews, and our engineering teams operational so that when Europe defeats this Covid-19 pandemic, we are ready to return to flying.

Ryanair’s decision to ground its fleet comes as authorities in the UK are preparing a support package for the aviation and aerospace sectors. This could include the state taking stakes in airlines, or some form of loan secured on airline assets such as airport take-off and landing slots.

Ryanair’s low-cost rival easyJet on Monday still operated some 100 flights, a significant reduction on the 2,000 that would be normal for this time of year. The group is reviewing its flight schedule on a daily basis and a person with knowledge of the situation said it was possible there would be no flights by the end of the week.

Restrictions placed on English prisons include ban on visits

Bethan Staton in London reports:

Prisons in England and Wales will from Tuesday limit inmate movements and suspend visits to staunch the spread of the coronavirus.

News of the restrictions came via the Prison Officers Association, which on Tuesday said it praised the justice ministry’s “sensible decision” to clamp down on prisons.

The rules will allow prisoners out of locked cells only for showers, phone calls and exercise. Visits, education and workshop activities will be suspended.

The restrictions, though “inevitable”, should “be accompanied by extra communication, making sure people have activities in their cells, phones to family, and compassion”, tweeted Frances Crook, the chief executive of the Howard League for Penal Reform, a prison rights charity.

A handful of confirmed cases have prompted concern over the spread of coronavirus in prisons, where poor health infrastructure and confinement could worsen the impact of an outbreak.

Twelve countries turn to IMF for financial assistance

Simeon Kerr in Dubai

A dozen countries in the Middle East, North Africa and central Asia have approached the IMF for financial assistance to help limit the human and financial cost of the coronavirus.

Jihad Azour, the IMF’s regional director, said the fund was considering a request from the Kyrgyz Republic for emergency financing, which would likely form the first disbursement since the outbreak. A few other requests would be considered in the coming days.

“Now, more than ever, international cooperation is vital to prevent lasting economic scars,” he wrote in a blog post.

Mr Azour said the pandemic has caused blows of lower demand, reduced trade, disrupted production, a fall in consumer confidence and tighter financial conditions. Oil exporters face the additional hit of crude prices plummeting by more than 50 per cent since the health crisis began.

The challenge is especially daunting for conflict-torn states, such as Iraq, Sudan and Yemen, where health systems are weak and their economies vulnerable to substantial price increases for medical and other goods.

Belgium in ‘heart of the pandemic’, officials say

Jim Brunsden in Brussels

Belgium has said it is living through “the heart of the pandemic” after the number of deaths linked to the virus jumped by close to 40 per cent.

The government’s crisis centre said on Tuesday that the death toll for those who had tested positive for coronavirus had risen by 34 in the past 24 hours to a total of 122. The number may have been pushed up by a lag in when some deaths were reported, the authorities said.

“Unfortunately, the figures we have just seen show us in a very painful way that we are today fully in this emergency situation, in full pandemic,” said a spokesman for the crisis centre.

Urging people to respect lockdown conditions, he said: “We have one chance now to act, because we are in the heart of this pandemic.”

The number of people hospitalised because of the virus rose to 1,859 on Monday, an increase of 256 compared with the previous day, the health ministry said. The rate of new hospitalisations slowed for the third successive day but the number of those going into intensive care — 59 — was higher than recent days.

More than 500 die in Spain in past 24 hours

Daniel Dombey in Madrid

More than 500 people have died in Spain in the past 24 hours after contracting the coronavirus, figures released on Tuesday show.

Spain, with almost 40,000 cases of the virus, is the worst affected European country after Italy.

The Ministry of Health said that 2,696 people have died, a 23 per cent increase on Monday’s toll of 2,182. The total of 39,673 cases represents a 20 per cent climb over the past 24 hours, while the number of people in intensive care rose by 12 per cent to 2,636. At present, 3,794 people have recovered.

Madrid remains the worst affected region with 12,352 cases, 1,050 people in intensive care and 1,535 deaths.

UK housebuilder Taylor Wimpey calls a halt to construction

George Hammond, Property Correspondent, reports:

Taylor Wimpey, one of the UK’s largest housebuilders, is shutting down all of its construction sites in response to the coronavirus.

The government’s stricter measures, announced by the prime minister on Monday night, do not include the closure of building sites, and Taylor Wimpey is the first housebuilder to announce such a move.

Barratt Developments is also in the process of closing its 400 or so sites across the UK, according to the company, which is yet to make an announcement on the closures. Rival housebuilder Redrow said on Tuesday it would keep sites open, albeit with stricter precautions.

Taylor Wimpey, which built 15,520 homes last year, has also drawn down its revolving credit facility of £550m in order to bolster its cash position, suspended its annual dividend and scrapped its financial guidance as a result of the virus’ spread.

The government’s advice on construction sites had been “anything but clear” said Brian Berry, chief executive of the Federation of Master Builders. He added:

Mixed messages are spreading further anxiety at a time when hundreds of small builders face immediate lost earnings, having to make their staff redundant, and seeing their companies go to the wall.

Labour MP David Lammy called on the government to “shut down construction sites and make sure other non-essential work is not happening”.

French finance minister compares crisis to Great Depression

Victor Mallet in Paris

The economic impact of the coronavirus pandemic is “comparable only to the great recession of 1929”, French finance minister Bruno Le Maire said on Tuesday.

He declined to predict how much the French economy would shrink as a result of the crisis, but said industry was only operating at 25 per cent of its normal level. “Each week of extra lockdown, each additional month of the epidemic, worsens the growth outlook,” he said. “The chemicals industry is working well, but the motor industry has almost stopped.”

Mr Le Maire and French President Emmanuel Macron have said they will do whatever it takes to save the country’s jobs and businesses, including nationalising fragile companies, providing state-financed loan guarantees and temporary unemployment benefits, and postponing tax and social security payments.

Mr Le Maire also said the crisis had exposed Europe’s excessive trade dependence on other countries and should be used as opportunity to remedy the failings of global capitalism. “In the long term,” he said, “we cannot depend on Asia, on China for goods that are strategic for us.”

Ineos to build hand sanitiser plants in UK and Germany

Michael Pooler reports:

The chemicals manufacturer Ineos is to build hand sanitiser plants at its existing sites in the UK and Germany within the next 10 days, with capacity to produce 2m bottles a month to help combat the spread of the coronavirus.

The company controlled by billionaire Sir Jim Ratcliffe said it would concentrate on meeting the needs of frontline medical and care services, with the product to be issued free of charge to NHS hospitals for the duration of the Covid-19 outbreak.

A shortage of hand gels in Europe has led to beer brewers, gin distilleries and high-end perfume makers converting production to make sanitiser, after the World Health Organization advised people to regularly wash their hands with alcohol-based products.

Ineos is one of the main European producers of the two key raw materials for hand rubs – isopropyl alcohol (IPA) and ethanol. It will produce 250ml pump pots of hand sanitiser and smaller 50ml pocket bottles at its sites in Middlesbrough, northern England, and Herne in Germany.

Federal Swiss government clashes with cantons over restrictions

Sam Jones in Zurich reports:

Switzerland’s federal government has pushed back on calls from its cantons for a stronger clampdown on public life in the wealthy alpine state, as cases of the novel coronavirus surged past 8,000.

Switzerland’s constitution is designed to give its 26 cantons and their residents as much liberty from Bern as possible: but in a stark illustration of the way the global pandemic is upending political and social norms, some of the country’s most conservative — and smallest — constituencies are those demanding tougher restrictions be imposed by a hesitant central government.

Shops selling non-essential goods have been ordered to close, alongside restaurants, bars and other public spaces. Gatherings of more than five people, even outdoors, are prohibited. But many feel the measures do not go far enough.

On Tuesday, Bern turned down a request from doctors in Verbier to place the local area under special measures. Despite ski slopes being closed, Verbier and surrounding villages are still thronging with wealthy second-home owners from Geneva and France, doctors said.

Bern has already told the cantons of Ticino and Uri that some of their measures are too stringent. The Ticino cantonal government ordered all non-essential factories and production lines to close as of this Monday. The Federal Ministry of Justice has told the canton the move is illegal and cannot be enforced.

A restriction ordered by the canton of Uri telling those over 65 to stay at home is also outside the local government’s power to enforce, ministry officials said at the weekend.

Goldman Sachs predicts 9 per cent decline in eurozone economy

Martin Arnold in Frankfurt:

Goldman Sachs has slashed its growth forecast for the eurozone, warning that the region’s coronavirus-crippled economy is likely to contract by 9 per cent this year and that budget deficits are likely to mushroom in many countries.

The US investment bank said in a note to clients on Tuesday morning that it expected the eurozone economy to shrink by 4 per cent in the first quarter and 11.4 per cent in the second. Its economists blamed “strict containment measures, anecdotal evidence of steep declines in domestic activity and a global recession” for the sharp decline in forecasts.

The deepest contractions would be in Italy and Spain, which Goldman predicted would shrink by 11.6 per cent and 9.7 per cent this year respectively. It added that Germany’s economy would contract by 8.9 per cent, the UK by 7.5 per cent and France by 7.4 per cent.

The Wall Street bank forecast that Germany and France would make a swifter recovery than their southern counterparts because they have announced “significantly more fiscal support for the economy” and they rely less on harder-hit tourism than on manufacturing, which is likely to rebound faster.

European PMIs understate depth of crisis, economists say

European business activity crumbled in March, according to figures that point to a deep recession ahead.

But economists warn that worse is yet to come, as the PMI surveys were compiled before much of the continent went into lockdown and are likely understating the breadth of the breakdown in economic activity.

“The PMI plummeted in March, of course it did. Only a foolish optimist would have expected otherwise,” said ING senior economist Bert Colijn.

The survey likely still understates March activity as more restrictive measures came into effect after the survey was conducted. It also doesn’t tell us much about the depth of the decline

Jack Allen-Reynolds, senior economist at Capital Economics, said the slump was so bad “that at any other time it would look like a spreadsheet error.”

Given that survey responses were collected between March 12-23, before some of the lockdown measures had been implemented, if they remain in place the data for April will be far worse.

European markets gain ground as sentiment strengthens

European investors shrugged off weak economic data, as a more upbeat sentiment rippled across international markets.

The benchmark European Stoxx 600 index gained 4.85 per cent in early trading on Tuesday, while London’s FTSE 100 gained 4.26 per cent, continue its rise even after new data showed UK business activity is shrinking at a record pace.

Frankfurt’s Dax index gained more than 6 per cent in spite of data showing activity in Germany’s private sector shrank at a rapid rate in March. Similarly, Paris’s benchmark Cac 40 index secured gains of 5.12 per cent after new data showed France had seen its biggest decline in output on record.

Investors are rushing back to stocks after the Federal Reserve’s announcement yesterday that it will buy unlimited amounts of government debt to keep the economy going and jobs safe.

US stock futures markets pointed to a 5.1 per cent rise for the S&P 500 benchmark later in the day, the maximum amount the futures index is permitted to rise.

UK hotels to shut as part of lockdown

Alice Hancock in London reports:

The UK’s enforced lockdown has been extended to hotels, except those that have permanent residents or that host key workers, the government said.

Along with restaurants, pubs, hairdressers, cafes and workplace canteens, hotels are being asked to shut from Tuesday in order to slow the spread of coronavirus.

B&Bs, campsites, hostels and caravan parks are also included in the government’s ban except “where people live in these as interim abodes whilst their primary residence is unavailable”. Key workers, which include frontline health service staff and food industry employees, are also able to stay in hotels that remain open.

Despite hotels being closed, takeaway and delivery services in restaurants have been permitted to remain in operation as they are deemed a crucial way for people to access hot food.

Analysts at Bernstein downgraded their base case for global hotel occupancy on Monday from a 50 per cent drop in revenues from international travellers and a 10 per cent drop in domestic trade to an 80 per cent drop “nearly everywhere”.

Business activity in the UK shrinks at record pace

Valentina Romei reports:

UK business activity contracted at a record rate, according to a closely watched survey that provides the first and most comprehensive indication of the extent of the hit to the economy caused by the coronavirus.

The IHS Markit flash UK purchasing managers’ index for services plunged to 35.7 in March from 53.2 in the previous month. The figure is the lowest since the survey began in the 1990s and it points to a sharp deterioration of the domestic economy.

The latest PMI figures were compiled in advance of the UK government’s decision to order pubs, restaurants and other leisure businesses to close by midnight on 20th March and before Monday’s announcement of the closure of all non-essential shops.

Services account for about 80 per cent of the economy and their fall in activity dragged down the composite index, an average of manufacturing and services, to 37.1 in March, also the lowest ever recorded and down from 53 the previous month.

The flash PMI also signaled a fall in employment across the manufacturing and services sectors to a level not seen since July 2009.

Chris Williamson, chief business economist at IHS Markit, said:

The surveys highlight how the COVID-19 outbreak has already dealt the UK economy an initial blow even greater than that seen at the height of the global financial crisis. Any growth was confined to small pockets of the economy such as food manufacturing, pharmaceuticals and healthcare. Demand elsewhere has collapsed, both for goods and services, as increasing numbers of households and businesses at home and abroad close their doors.

Slovakia to use mobile phone data to enforce quarantine rules

James Shotter in Warsaw reports:

Slovakia is to pass a law to allow the use of data from mobile phones to ensure that citizens are observing the quarantine rules introduced to fight the coronavirus outbreak.

The country’s new prime minister, Igor Matovic, who took office at the weekend, said that his government would discuss the measure today, before presenting it to parliament.

The step would be the latest in a series of radical moves that Slovakia has taken to try and stem the spread of the outbreak, which has so far infected 204 people in the central European nation.

Slovakia has closed it borders, banned international rail and air travel, introduced strict quarantines for Slovaks returning from abroad, as well as for those who have been in contact with people infected by the novel virus. It has also closed schools and non-essential shops.

Indian neighbourhoods draw up their own rules

Amy Kazmin in New Delhi reports:

With a curfew now in force across large swaths of India, various middle-class residential neighbourhood societies and apartment complex boards are taking matters into their own hands to decide who and what will be allowed to enter their colonies and compounds.

The government has permitted essential services — including groceries, pharmacies, and e-commerce companies — to continue operating to ensure that a population now confined to their homes can obtain the necessities of daily life.

But powerful residential societies are now setting terms and conditions for their own areas, amid growing public panic about the spread of the virus. These bodies appear torn between a desire to shut themselves in and exclude all outsiders — and the reality of their dependence on vendors to provide doorstep delivery of fresh fruit, vegetables and milk.

In some neighbourhoods, societies have remained relatively open, allowing vendors carrying fruits, or milk suppliers deliver directly to homes and apartments. Elsewhere, food vendors have been allowed but newspaper deliveries have been stopped, after virulent Whatsapp rumours that coronavirus was spreading through newspapers.

Some neighbourhoods and buildings have locked their gates and are attempting to seal themselves off from the outside world, barring all outsiders from entering, raising questions about how they will obtain essential supplies during a curfew due to last until March 31, at least.

Debates have also raged in many neighbourhood about whether maids and other domestic helpers, such as essential caregivers, should be permitted to enter. In the absence of clear government guidelines, it appears to be every neighbourhood — or apartment complex — for itself.

European markets shrug off weak economic data

European markets have shrugged off weak eurozone production data, as a more upbeat sentiment rippled across the globe.

The benchmark European Stoxx 600 index gained 3.84 per cent since the opening bell on Tuesday, while London’s FTSE 100 gained 3.67 per cent.

Frankfurt’s Dax index shed some of the 6 per cent it gained in the first hour of trading, but held on to a 4.8 per cent rise in spite of data showing activity in Germany’s private sector shrunk at a rapid rate in March.

Similarly, Paris’s benchmark Cac 40 index secured gains of 3.39 per cent after IHS Markit’s purchasing managers’ index for France announced the country’s biggest decline in output on record, from 51.9 points last month to 30.2 in March.

British public overwhelmingly support lockdown measures

Sebastian Payne, Whitehall Correspondent, reports:

The UK has woken up to a new reality this morning, with the country in lockdown, all non-essential shops shuttered and significant limits introduced on gatherings and the movement of citizens. It’s the first time in the country’s recent history that such stringent restrictions on individuals have been introduced.

But the country is very supportive of Boris Johnson’s decision to bring in these new measures. According to a snap poll by YouGov, a huge 93 per cent of Britons support the prime minister’s latest efforts to tackle the spread of coronavirus.

The vast majority of all age and social groups support the lockdown, but women are more likely to support it than men. The same is true for older people: 80 per cent of those over 65 compared to 60 per cent of those 18-24 year olds.

The nation is also feeling positive about surviving the lockdown. Two thirds of the people think it will be “easy” to get through the initial three weeks, compared to 29 per cent think it will be “hard”. Those numbers could begin to shift if the restrictions remain in place for longer.

But one area of division is whether the police have enough powers to enforce the tough new restrictions. 39 per cent of Brits think their powers are sufficient to see through the lockdown, but 39 per cent think they are not. Again, older people are more likely to say they need more powers whereas young people think their current powers are enough.

Eurozone business activity ‘collapses’ in March

Valentina Romei reports:

Business activity crashed to a record low in the eurozone as the coronavirus health emergency morphed into an economic crisis.

The IHS Markit flash composite purchasing managers’ index for the eurozone plunged to 31.4 in March from 51.6 in the previous month. This is the lowest reading since the series began in the late 1990s.

“Business activity across the eurozone collapsed in March to an extent far exceeding that seen even at the height of the global financial crisis” said Chris Williamson, chief business economist at IHS Markit. “Steep downturns were seen in France, Germany and across the rest of the euro area as governments took increasingly tough measures to contain the spread of the coronavirus”.

The PMI index for services dropped to 28.4 in March from 52.6 in February, the lowest level ever recorded, pointing to a near shutdown of the domestic economy.

The manufacturing sector contracted at a marginally slower pace with a corresponding index falling to 44.8, the lowest since the financial crisis.

The composite index is a weighted average of activity in the manufacturing and services sectors and a reading below 50 indicating the majority of businesses reporting a deterioration compared to the previous month. The PMIs are the first and most comprehensive measure of the impact of the coronavirus crisis on the economy since the outbreak in the region at the end of February.

The preliminary data were based on responses collected between March 12-23.

Biggest rise yet in global cases as US infections surge

Steve Bernard in London reports:

Monday saw the largest single daily rise in the number of Covid-19 cases. 41,371 cases were diagnosed yesterday and the global total has now reached 382,552. The death toll rose by a record 1,873 to stand at 16,578.

For the second day running the US was hardest hit, adding 10,168 cases, the highest rise in a single day outside of China.

Italy once again saw a fall in the number of new cases, adding 4,789 cases on Monday, down from 6,557 two days earlier. Spain however, saw a large spike in cases yesterday adding 6,368 to stand at 35,212.

The daily number of recoveries rose slightly yesterday with 3,442 more people free from the virus. The total now stands at 102,069.

Iran rejects MSF assistance building hospitals

Najmeh Bozorgmehr and Monavar Khalaj in Tehran report:

Iran has said it does not need Médecins Sans Frontières (MSF) to set up makeshift hospitals in the country following opposition by hardline forces to the presence of foreign doctors in the country.

Domestic media reported that a nine-member team from the Geneva-based humanitarian medical organisation had arrived in the central city of Isfahan – one of the worst-hit provinces – this week to set up makeshift hospitals.

However, some hardline groups expressed concerns over their presence, alleging that the US could use it as an opportunity to collect information about Iran’s health sector.

“Any moment that Iran needs, we will use capabilities of international humanitarian organisations such as Médecins Sans Frontières which intend to assist the country … and we welcome that,” said Hamidreza Jamshidi, secretary of Iran’s national headquarters to fight coronavirus on Tuesday.

“For now, we do not need makeshift hospitals. We may need it in three or 10 days but we have enough beds now,” he added.

Iran’s supreme leader Ayatollah Ali Khamenei claimed on Sunday that the spread of coronavirus in Iran could be a form biological warfare by the US. He warned against providing what he saw as opportunities for any further collection of information.

It is not clear yet if the MSF group has already left the country or not.

Mr Jamshidi said many of Iran’s 140,000 hospital beds remain empty, while makeshift hospitals set up across the country by the armed forces have yet to be heavily used. Iran is expecting a new wave of casualties in the coming weeks.

Goldman tells clients to invest in gold amid Fed’s bond buying spree

Neil Hume in London reports:

Gold was higher again on Tuesday after Goldman Sachs told clients it was “time to buy the currency of last resort.”

Jeffrey Currie, head of commodities research at the bank, said the decision by the US Federal Reserve to buy unlimited amounts of government bonds would fuel concern currency “debasement concerns” and boost the price of the yellow metal.

We have long argued that gold is the currency of last resort, acting as a hedge against currency debasement when policy-makers act to accommodate shocks such as the one being experienced now.

Like other asset classes, gold was hit hard in the scramble for US dollars, falling more than 12 per cent from its early March peak of around $1,700 a troy ounce as investors liquidated positions.

That pressure was exacerbated by the steep decline of the oil price, which saw big producer nations like Russia shift from being net buyers of gold to a “possible” net seller, according to Goldman.

However, with those stresses easing after the US Federal Reserve opened swap lines with other central banks and launched unlimited quantitative easing, gold has discovered its lustre.

It rose more than 4 per cent on Monday and was up a further 2 per cent to $1,583 on Tuesday.

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German business activity plummets in March

Martin Arnold reports:

Business activity in Germany has contracted sharply in March due to the coronavirus outbreak, according to a closely watched survey, which found the number of companies saying they were still expanding output had plummeted.

The IHS Markit composite purchasing managers’ index for Germany fell from 50.7 points last month to 37.2 in March, its biggest fall on record, underlining how the sudden shutdown of swaths of the economy has caused many European businesses to grind to a halt.

By dropping further than expected below the crucial level of 50, under which the majority of companies surveyed are reporting a shrinking of activity, the data show how the German economy has been crippled by the unprecedented efforts to tackle the pandemic.

Germany has responded to the rapid spread of the virus by imposing a nationwide ban on gatherings of more than two people, except for families and household members, while requiring people to keep 1.5m apart in public.

Olaf Scholz, the German finance minister, said on Monday the German economy would shrink by 5 per cent this year as the pandemic spreads in the country where it has infected more than 26,000 people and left 110 dead.

The composite PMI for France, the eurozone’s second-biggest economic, fell by an even larger amount than Germany when it was released earlier on Tuesday, dropping from 52 points last month to 30.2 in March.

Mayor of London urges people to avoid rush hour trains

Sadiq Khan, the Mayor of London, has urged the public to avoid rush hour transport in the capital, as scenes of overcrowding continue despite the government’s efforts to restrict movement.

Mr Khan said staff illness and self-isolation meant Transport for London cannot run more services than it is at present, and told commuters to stagger their use of the Underground to help avoid crowding.

The Mayor added that many of those still travelling would be working in the gig economy.

“A proper package of support for these workers would alleviate this situation and help public transport, and I’ve raised this with the government,” he said.

https://twitter.com/SadiqKhan/status/1242362908841054209?s=20

Sports Direct ordered to close stores

Jim Pickard in London reports:

The government has ordered Sports Direct to close down its stores – after the sportswear retailer sought to claim that it was providing a crucial service – amid lingering confusion in some quarters about the UK government’s new clampdown on movement.

Boris Johnson on Monday night bowed to pressure and announced the closure of all non-essential shops, ordered people to stay at home and said the police would get new powers to disrupt gatherings of more than two individuals.

Michael Gove, the Cabinet Office secretary, said on Tuesday morning that people should work from home “wherever possible” to stop the spread of the virus.
There were reports on Tuesday morning that commuters were still enduring packed conditions on some carriages on the London Underground.

In circumstances where it was still necessary to move out of the house – such as a plumber visiting a vulnerable elderly person – they should maintain a distance of at least two metres, Mr Gove told the BBC Radio 4 Today programme.

Mr Gove said work was still continuing on construction sites but the way that builders did their jobs would alter to take account of the virus. The minister also hinted that the government is close to announcing its package of measures for up to 5m self-employed people.

Mr Gove urged people to stay indoors as much as possible, saying: “The most important thing is to restrict social contact.”

Thailand to impose state of emergency

John Reed in Bangkok reports:

Prayuth Chan-ocha’s Thai government will on Thursday declare a state of emergency under a decree giving it broad powers to fight the coronavirus outbreak, including the right to censor media.

Mr Prayuth said in a TV address on Tuesday that he would be enacting the 2005 Royal Decree on Emergency Situations, which will also give the prime minister the right to impose a nationwide curfew, restrict travel and prohibit public gatherings.

Mr Prayuth, the former military dictator who was elected prime minister last year after an election marred by accusations of vote-rigging, has come under criticism on Thai social and online media for his government’s piecemeal response to the pandemic.

Thailand has not yet imposed a nationwide lockdown of the kind seen in other countries, but Bangkok’s regional government has closed most malls and other public places.

Separately on Tuesday Thailand’s powerful military released a video showing General Apirat Kongsompong strolling through Bangkok wearing protective gear, set to the soundtrack of the song “Heroes Tonight”.

Sweden’s financial regulator urges banks to stop dividend payments

Richard Milne, Nordic and Baltic Correspondent

Sweden’s financial regulator urged banks to stop paying dividends to help protect the Scandinavian country’s financial system from the effects of the coronavirus outbreak.

The Financial Supervisory Authority said on Tuesday morning that it expected banks and other credit institutions to halt shareholder payouts, putting particular pressure on Handelsbanken, one of Sweden’s largest lenders that is due to hold its annual meeting on Wednesday and has yet to change its dividend proposal.

The other big Swedish banks – SEB and Swedbank – have delayed their annual meetings and said they are considering cutting their dividends. Nordea, the other large bank active in Sweden, recently moved its headquarters to Finland, but also announced plans to delay its annual meeting.

Countries around the world have suspended their dividends due to coronavirus as they seek to conserve cash. In the Nordics, the need to shore up balance sheets has come alongside heavy political and regulatory pressure on companies to suspend payouts as economies deteriorate rapidly.

“It is important that companies now act responsibly and strengthen their resilience in this critical situation,” said Erik Thedeen, head of the Swedish regulator.

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French private sector activity tumbles at sharpest pace on record

Martin Arnold reports:

Business activity in France has plummeted at a record pace this month, according to a closely watched survey that gives the clearest indication so far of the blow dealt to Europe’s economy by the coronavirus pandemic.

The IHS Markit purchasing managers’ index for France fell from 51.9 points last month to 30.2 in March, its biggest fall on record, underlining how the sudden shutdown of large parts of the economy to combat the virus has caused many European businesses to grind to a halt.

By dropping further than expected below the crucial level of 50, under which the majority of companies surveyed are reporting a shrinking of activity, the data underline how the French economy has been crippled by the unprecedented efforts to tackle the pandemic.

President Emmanuel Macron last week declared France to be “at war” with the virus, which has infected more than 20,000 people and killed 860 in the country. In response, France shut schools, restaurants, and non-essential shops, while severely restricting people’s movement.

Paris has announced a €45bn aid package to help businesses and employees hit by the virus and France’s finance minister Bruno Le Maire has warned of a looming recession and said he was willing to nationalise large companies to protect them from bankruptcy.

While economists have been slashing their eurozone growth forecasts to deeply negative levels, there has still been very little data to show how hard the coronavirus crisis has hit the economy. So Tuesday’s PMI data are likely to be studied even more closely than usual.

The previous record monthly fall in the French PMI was a 5.5 point drop in December 2018 at the height of the “gilets jaunes” protests that brought parts of the country to a halt.

Arab gulf states ramp up enforcement measures as cases rise

Simeon Kerr reports from Dubai

The Arab Gulf states are ramping up enforcement of curfews, quarantine and stay at home edicts as coronavirus cases rise to more than 1,900.

Kuwait on Sunday evening arrested nine expatriates in a suburb of the capital for breaking a daily nationwide curfew between 5pm and 4am, referring them for deportation.

The United Arab Emirates warned that violations of orders to stay at home would prompt legal action, including fines and prison terms. The government has asked people only to leave their residences to go to work or to collect food and medicine.

Dubai Police arrested a European man for posting a video of himself at the beach in contravention of the authorities’ instructions and Oman’s police force on Monday warned people not to gather in public spaces, including beaches, dunes and mountains. The sultanate reported 18 new infections among nationals, bringing its tally to 84.

In Qatar, where the number of cases has surpassed 500, two people were arrested for breaking home quarantine measures, while in Bahrain, legal action will be taken against groups of five gathering in public spaces, including fines or jail terms of at least three months.

German economy minister dismisses eurozone ‘coronabonds’ idea

Guy Chazan in Berlin reports:

Peter Altmaier, the German economy minister, has rejected the idea of eurozone “coronabonds” to raise money to help fight the economic fallout of the pandemic.

“I urge caution when supposedly new, ingenious concepts are presented which often enough are just long discarded ideas that have come back from the dead,” he told Handelsblatt.

He said the discussion about eurobonds was a “phantom debate”.

Some EU leaders have floated the idea of so-called coronabonds which could be issued by an existing European institution, such as the European Stability Mechanism, to help deal with the economic consequences of the crisis. But Germany is one of a number of eurozone countries that remain sceptical of such an idea, and anything that smacks of pooling risk.

Mr Altmaier said that recent action by the ECB and the various emergency measures adopted by European governments had sent “a strong signal for the stability of the euro”.

Asked what he thought of Spanish prime minister Pedro Sanchez’s proposal for a new Marshall Plan for Europe, he said that although European solidarity was important, the key task was to “strengthen the competitiveness of EU economies”. “Innovation is more important than subsidies,” he said.

Norwegian Air Shuttle completes first stage of government rescue

Richard Milne reports

Norwegian Air Shuttle has fulfilled the first part of its three-stage government rescue package as the embattled low-cost airline tries to stave off collapse.

Norwegian should receive the first tranche of NKr300m ($27m) in new financing after finding two Nordic banks to guarantee 10 per cent of the scheme with Norway’s government backing the other 90 per cent.

Norwegian, which entered the coronavirus crisis with more debt relative to its profitability than any other listed airline, admitted that the other two parts of the rescue – worth a collective NKr2.7bn – were “crucial” to its survival.

“The current state of the capital markets in combination with the challenging times for the airline industry limit the options available,” it added.

It said it was in discussions with the government over the precise criteria for the remaining money. Norway’s centre-right government said on Thursday that Norwegian would get NK1.2bn if it reduced interest rates and repayments from its existing creditors, and another NKr1.5bn if it raised additional equity.

Norwegian has said that the NKr3bn would help it until June but that it could require more help after that. The airline has grounded nearly all its aircraft and temporarily laid off 90 per cent of its staff due to the collapse in demand from the coronavirus.

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Markets in rally mode as tumult in equities persists

Hudson Lockett in Hong Kong, Leo Lewis in Tokyo and Adam Samson in London write:

Global equities markets have swung higher as the turbulence that has taken hold over the past few weeks has shown little sign of abating.

European bourses jumped at the opening bell, with the continent’s Stoxx 600 rallying 3.6 per cent. London’s FTSE 100 rose 2.7 per cent, while Frankfurt’s DAX advanced 6 per cent.

The more upbeat sentiment rippled from Asia where equities markest posted significant gains as traders assessed the US Federal Reserve’s pledge to buy an unlimited amount of bonds in its bid to prop up the world’s biggest economy.

However, investors were sceptical that the Federal Reserve’s pledge to buy an infinite quantity of Treasuries would lead to a sustained rebound for battered global markets, pointing to few signs the Covid-19 outbreak is slowing and a $2tn US fiscal package still stalled in Congress.

“This is the Fed’s ‘whatever it takes’ moment,” wrote analysts at Invesco, referring to then-European Central Bank governor Mario Draghi’s 2012 pledge to save the euro. That was, they noted, “one of the most aggressive monetary easing programmes in the history of central banking”.

US stock futures markets pointed to a 4.3 per cent rise for the S&P 500 benchmark later in the day. Overnight on Wall Street the S&P 500 ended another volatile session with a 2.9 per cent loss while the Europe Stoxx 600 fell 4.3 per cent.

Signs of crowding on London transport despite lockdown

There has been evidence of overcrowding on London’s transport network this morning, despite the government’s efforts to shut down the country to protect against the spread of the pandemic.

Prime minister Boris Johnson said that only people who could not work from home should continue to travel to their workplace. Key workers such as health and care staff are exempted, so too are people working in construction and manufacturing.

Nicola Smith, who identifies as a health worker, has tweeted a picture of a crowded Central line tube train during Tuesday’s rush hour.

https://twitter.com/nsmith694/status/1242343836262846470?s=20

Transport for London is running a sharply reduced service, but union leaders have warned that it is impossible to practice social distancing on board the trains given how many people are still commuting into the city.

Signs the pandemic is weighing on global hiring

Valentina Romei in London reports:

The coronavirus outbreak is already hitting jobs across all major economies, according to new figures from recruitment site Indeed.

In the UK, job postings in travel and accommodation dropped by 22 per cent between January 31 and March 18 compared with a year earlier, the data showed. Over the same period, there were 12 per cent fewer positions in the food and beverage sector, while the retail sector saw 4 per cent fewer job adverts.

Still, a sharp increase in postings was registered for warehouse-based workers – which the company said reflected many supermarkets gearing up to provide home deliveries for an increasing number of customers. Overall UK job postings were down 4.5 per cent.

Italy – the first western country to be affected by the outbreak – was the worst-performing market across the 11 tracked by Indeed, with a 12 per cent fall in job postings over the same period, but France and Germany also registered sharp contractions.

UK companies hold off trying to calculate virus impact

The UK’s listed companies announce earnings and regulatory disclosures at 7am London time every morning, but things seem a little quieter than normal today.

While several retailers including Games Workshop and Mulberry have put out announcements detailing store closures, there are few signs of companies trying to quantify their lost earnings.

The UK’s financial regulator this weekend asked listed companies to delay publication of their preliminary results for “at least two weeks”, to give them more time to accurately assess the impact on their businesses, and reduce pressure on staff.

Writing in the Lombard column, the FT’s Cat Rutter Pooley said the move was sensible:

By observing the moratorium, even those that do not need it will give their weaker peers some precious breathing space to assess their balance sheets and government support programmes. That could prevent unwelcome surprises later and unnecessary collapses.

European stock futures jump after sell-off

Equities markets across Europe were set to rise sharply on Tuesday, reversing direction from significant falls in the previous session.

Stoxx 600 futures zipped 4.8 per cent higher around 30 minutes before the opening bell in major European markets. German Dax futures rose 5.4 per cent, with UK FTSE 100 futures up 4.5 per cent.

Markets came under pressure on Monday in yet another volatile trading session. The Stoxx 600 shed 4.3 per cent, with Wall Street’s S&P 500 down 2.9 per cent.

A series of key surveys of business executives covering Europe’s biggest economies is due later this morning. The figures are expected to be bleak, but provide economists and investors with a reading on just how bad the situation has become.

These purchasing managers’ indices are released well before official economic data and are among the earliest gauges to provide insight into activity levels.

The FT economics team will be covering them on this live coverage page. France, the eurozone’s second biggest economy, kicks things off at 8.15am London time, followed by Germany 15 minutes later. UK data are due at 9.30am.

Europe: what you might have missed

The Chinese government will begin relaxing restrictions on travel to and from Hubei province, the centre of the global coronavirus pandemic, on Wednesday.

South Korea has expanded financial support for the country’s struggling companies and volatile markets to Won100tn ($79.6bn) as the global pandemic threatens growth in Asia’s fourth-largest economy.

Britain’s mobile phone networks will send a text message to all of the country’s mobile phone users on Tuesday morning on behalf of the government urging people to stay home.

Any person who fails to comply with coronavirus quarantine procedures when entering China can be tried as a criminal, the country’s top legal bodies said on Tuesday.

New York City, which has overtaken Seattle as the biggest coronavirus hotspot in the US, has seen 28 per cent of its tests coming back positive, suggesting the virus has been circulating in America’s largest city for weeks.

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Chinese government to ease travel restrictions on Hubei province

Tom Mitchell in Singapore and and Christian Shepherd Beijing report:

The Chinese government will begin relaxing restrictions on travel to and from Hubei province, the centre of the global coronavirus pandemic, on Wednesday, in a major milestone in the country’s battle against the disease.

The Hubei Health Commission announced on Tuesday that the liberalisation will initially apply to all areas of the province except for Wuhan, the provincial capital, where the travel ban will stay in place until April 8.

The announcement comes two weeks after President Xi Jinping visited Wuhan, in a signal that the Chinese government felt it had reached a turning point in the “people’s war” against the coronavirus.

Asia stocks rally following Fed’s bond pledge

By Hudson Lockett in Hong Kong and Leo Lewis in Tokyo

Asia-Pacific stocks rallied after the US central bank vowed to buy whatever amount of government bonds necessary to shield the economy from the impact of the coronavirus pandemic.

However, investors were sceptical that the Federal Reserve’s pledge to buy an infinite quantity of treasuries would lead to a sustained rebound for battered global markets, pointing to few signs the Covid-19 outbreak is slowing and a $2tn US fiscal package still stalled in Congress.

In Asian trading on Tuesday Japan’s benchmark Topix and Australia’s S&P/ASX 200 climbed 2.1 per cent 4.1 per cent, respectively. South Korea’s Kospi gained 6.6 per cent while China’s CSI 300 and Hong Kong’s Hang Seng added 1.4 per cent and 3.7 per cent, respectively. US stock futures markets pointed to a 3.8 per cent rise for the S&P 500 benchmark later in the day.

Overnight on Wall Street the S&P 500 ended another volatile session with a 2.9 per cent loss. The US dollar, which has surged amid the coronavirus crisis, weakened in Asia trading following the Fed’s announcement.

Arrivals in China face criminal charges if they fail to comply with quarantine

Christian Shepherd reports from Beijing

Any person who fails to comply with coronavirus quarantine procedures when entering China can be tried as a criminal, the country’s top legal bodies said on Tuesday, making clear that the measure also applied to foreigners.

Nationality should have no bearing on legal decisions about who should be held accountable for jeopardising national health quarantine measures at the border, China’s supreme people’s court and procuratorate said in a statement.

The announcement comes as China focuses its efforts to fight the coronavirus on its borders, as transmission within the country has dwindled to near zero.

As part of efforts to guard against a second wave of the outbreak caused by new infections imported into China, the capital city of Beijing has rerouted airlines to neighbouring hubs for screenings and imposed mandatory 14-day quarantines in centralised hotels for all new arrivals.

Hong Kong developer warns tourism ‘at a standstill’

Primrose Riordan reports from Hong Kong

A property company founded by Hong Kong’s wealthiest tycoon has warned that its rental returns and the market value of its properties would be squeezed this year due to the coronavirus and the ongoing political unrest in the city.

Henderson Land, which was previously headed by Lee Shau-kee, is now run by his two sons, Peter and Martin Lee.

“The tourism, hotel and aviation industries have almost come to a standstill,” Henderson Land said in its annual results.

Forbes said in February that the senior Mr Lee had edged out Li Ka-shing as the richest man in the city, with an estimated fortune of $30.4bn.

Henderson Land’s net profit fell 26 per cent in 2019 to HK$14.6bn (US$1.9bn) compared with the year before.

The company attributed the drop to US-China trade tensions and the political crisis that gripped Hong Kong in the latter half of 2019.

Brazil coronavirus cases near 2,000

Andres Schipani in São Paulo

Brazil’s confirmed cases of coronavirus grew on Monday to 1,891 with 34 fatalities.

It has the highest number of cases in Latin America and experts have said the region’s largest country appears on track to have an Italy-like curve of infection.

The steady rise of those infected with Covid-19 — a week ago there were only 234 — comes as President Jair Bolsonaro is being heavily criticised over a lack of decisive action in the face of the pandemic.

He stepped up his verbal attacks on state governors saying “people will know that they have been deceived” by them after they ordered non-essential businesses to shut their doors to stem the outbreak.

But according to a Datafolha poll released on Monday, 54 per cent of respondents rated the governors’ response to the pandemic as “great” or “good” against just 34 per cent for Mr Bolsonaro, who early on Monday, issued a decree allowing employers to suspend employees for up to four months with no pay, but not fire them, only to backpedal hours later amid an outrage.

Later in the day, he agreed to release R$85bn (US$16bn) for Brazilian states to fight the outbreak.

South Korea boosts support for companies and markets

Song Jung-a reports from Seoul

South Korea has expanded financial support for the country’s struggling companies and volatile markets to Won100tn ($79.6bn) as the global pandemic threatens growth in Asia’s fourth-largest economy.

The expanded stimulus package, which builds on a Won50tn financial support plan unveiled last week, is a “special pre-emptive step to protect our companies and people’s jobs”, President Moon Jae-in said in an emergency economic meeting on Tuesday.

The package includes an extra Won29.1tn financial support for troubled small and mid-sized companies, a Won20tn bond market stabilisation fund and a Won10.7tn stock market stabilisation fund. Financial support will also be provided to big companies suffering from liquidity shortages.

Mr Moon expressed concern that South Korea’s export-driven economy will be hit hard by slowing global demand. “The global economy is in trouble. It is hard to predict when it will be over,” he said. “Our companies, the backbone of our economy, are also in big trouble.”

He said urgent steps were needed to cushion the blow to local companies as they suffer from liquidity shortages amid deteriorating earnings and lower credit ratings due to disruptions to global supply chains and slowing exports.

UK to send text messages to urge people to stay home

Nic Fildes reports from London

Britain’s mobile phone networks will send a text message to all of the country’s mobile phone users on Tuesday morning on behalf of the government urging people to stay home.

The move is unprecedented for the British telecoms industry but follows the example of other countries that have sent regular warnings to people of restrictions to stem the spread of the coronavirus.

The government has held talks with the technology and telecoms industry about alert systems using smartphones and mobile networks.

Such systems are often deployed in crisis situations such as earthquakes.

Australia’s Xinja Bank secures $256m investment

Jamie Smyth reports from Sydney

Emirates’ World Investments said on Tuesday it would invest up to A$433m (US$256m) over the next two years in Xinja Bank, an Australian start-up digital bank.

The investment, one of the largest made in an Australian start-up, was agreed despite the ongoing coronavirus crisis, which has led to a funding squeeze for many businesses.

Emirates’ World Investments, an investment group based in Dubai, said it would invest A$160m immediately and make the remaining A$273m available in several tranches.

Eric Wilson, Xinja founder and chief executive, said the large scale investment was a great outcome for the company, which has expanded aggressively since launching in Australia in January and now has attracted 29,000 customers.

Xinja has attracted deposits worth A$400m in less than eight weeks by offering attractive interest rate on savings of 2.25 per cent.

It has temporarily stopped taking new customers for its savings account following the Reserve Bank of Australia’s move to slash rates to a record low of 0.25 per cent.

Mr Wilson said Xinja is maintaining its 2.25 per cent deposit rate for existing customers.

Myanmar reports first cases of coronavirus

John Reed reports from Bangkok

Myanmar has reported its first two coronavirus cases, after weeks of claiming that it was free of the disease.

Myanmar’s health ministry said late on Monday that a 36-year-old Myanmar man returning from the US and a 26-year-old Myanmar man returning from the UK had tested positive for the coronavirus.

“We will investigate all the people who were in close contact with these two men,” the statement, quoted by AFP, said.

Myanmar, with a population of 54m, is one of Asia’s poorest countries, and health officials said that its recent claim to be coronavirus-free was due to a lack of testing.

Zaw Htay, Aung San Suu Kyi’s government spokesman, claimed earlier this month that the diets and lifestyles of people in Myanmar, including their use of cash money rather than credit cards, were preventing the spread of the disease.

Washington state tells residents to stay at home

Hannah Murphy reports from San Francisco

Washington has become the latest in a string of US states to issue a stay-at-home order to residents to curb the coronavirus pandemic.

Governor Jay Inslee said that all Washingtonians would be required to stay at home for at least two weeks unless they need to pursue “essential activities”.

All businesses except “essential businesses” are to be closed in the state, which became the epicentre of the West Coast outbreak following the discovery of multiple cases at a nursing home just outside of Seattle.

Washington is now the 16th state under lockdown, after New Mexico, Indiana, Massachusetts, Michigan, Ohio, Oregon, West Virginia and Wisconsin all made similar announcements on Monday.

New Zealand reports 43 new coronavirus cases

New Zealand said it is examining four suspected cases of “community transmission” as the country reported 43 new coronavirus cases on Tuesday morning.

Ashley Bloomfield, the director-general of health, said the total number of cases in the country had risen to 155. He said New Zealand will now include cases identified through clinical diagnosis in its tally alongside those identified through positive test results.

Overseas travel remained the “main driver” of new cases in New Zealand, but four of the cases reported on Tuesday did not appear to be linked to anyone with a travel history or other confirmed cases. Health authorities are using contact tracing to discover possible connections to other cases.

New Zealand has closed its borders to foreign visitors.

Jacinda Ardern, the country’s prime minister, announced on Monday that New Zealand would enter “Covid-19 alert level 4 eliminate” from midnight on Wednesday, which involves closing non-essential businesses and instructs people to stay at home to stem the spread of the virus.

Dr Bloomfield said it was best to enter this stage “sooner rather than later” to break the chain of community transmission.

Six people are being treated in hospital for Covid-19 and all are in a stable condition, Dr Bloomfield said.

South Korean new virus cases rise again despite tougher controls

By Edward White

The pace of new infections in South Korea has picked up again as the country tightens controls on overseas arrivals and large church groups.

Seventy-six new cases were reported on Tuesday, up from 64 cases a day earlier. The total caseload now stands at 9,037 with 120 deaths.

New infections have been mostly on a downward trend this month but there have been several flare-ups linked to churches, nursing homes and a call-centre, as well as arrivals from Europe and the US.

Seoul has in recent days started implementing mandatory testing on all new arrivals from Europe and some health experts have called for the measure to be expanded to people landing in the country from the US.

Still, the number of patients recovering continues to outpace new infections with 341 additional recoveries recorded on Tuesday, taking the tally to 3,507, according to the Korea Centers for Disease Control and Prevention.

Ecuador delays bond interest payments

Gideon Long reports from Bogotá

Ecuador’s finance minister said the country will make a $325m eurobond amortisation payment on Tuesday as planned, but will delay the payment of around $200m in interest on other bonds due this week, taking advantage of a 30-day grace period to give itself more time.

In a sign of how cash-strapped the country is in the wake of the Covid-19 outbreak and a sharp drop in oil prices, Richard Martínez said his government would try to reschedule debt repayments with all its creditors.

“We’re going to open a dialogue with our commercial, bilateral and multilateral creditors to come up with a good agreement for the Republic that will allow us to reduce the pressure over the course of the year while at the same time maintaining access to sources of financing,” he told an online news conference on Monday night.

He said the decision to repay the $325m should ensure Ecuador receives around $2bn in financing in the coming weeks, including a $500m disbursement from the IMF in late April.

In addition, he said Ecuador had secured more than $100m in help from the World Bank ($26m), the Inter-American Development Bank ($25m) and the Latin American development bank CAF ($51m) specifically to deal with Covid-19.

The delayed interest payments are on bonds due in 2022, 2025 and 2030.

Ecuador has the second-highest number of confirmed coronavirus cases in Latin America, behind Brazil, and the highest per capita. Local authorities say 981 people have tested positive and 18 have died.

It is the only country in South America that uses the dollar as its currency, limiting its scope to address the sharp drop in prices for oil, which accounts for more than half of the country’s export revenue. Furthermore, it is struggling to meet the terms of a $4.2bn loan agreed with the IMF last year.

The spread between Ecuadorian bonds and US Treasuries has soared in recent weeks reaching the kind of levels typically associated with default. On Sunday night, Congress urged the government to delay its debt repayments.

News you might have missed

Johnson to Britons: ‘You must stay home’ Boris Johnson brought the shutters down on Britain on Monday night, as he announced the closure of all “non-essential shops”, told people to stay at home and warned that the police would enforce tough new measures to stop the spread of coronavirus.

France toughens its lockdown France has again tightened the rules governing the country’s lockdown by raising the fines for people who go out without a legal reason, limiting outdoor exercise even further and closing all open-air markets.

South Africa orders 21-day lockdown South African president Cyril Ramaphosa ordered a 21-day nationwide lockdown for Africa’s most industrialised country, in the most drastic measures on the continent so far to tackle the spread of the virus.

Senate fails to advance stimulus bill for second time Democrats have for the second day in a row stopped a nearly $2tn economic stimulus package from advancing in the Senate, as lawmakers from both parties continue to disagree over how to prop up a US economy battered by the spread of coronavirus.

IMF concedes coronavirus will push world economy into recession The IMF has belatedly recognised that the coronavirus crisis will plunge the world economy into recession. In a statement after a call with G20 finance ministers, Kristalina Georgieva, who heads the fund, said the outlook was now “negative”.

China reports 1 new coronavirus case in Wuhan

Chinese health authorities reported a new case of coronavirus in Wuhan, the city where the outbreak began, after four days of no new local infections in the mainland.

There were 78 new cases in the mainland to the end of Monday, up from 39 a day earlier. Of those infections, 74 were imported by people returning from overseas. The new cases took the total to 81,171.

There were seven new deaths, to bring the total fatalities to 3,277.

The number of coronavirus patients discharged from hospital rose to 73,159.

Asia-Pacific stocks climb despite US falls

Asia-Pacific stocks rose on Tuesday even after a pledge for unprecedented buying of government bonds by the US Federal Reserve failed to steady Wall Street as investors awaited the passage of an economic stimulus package.

Australia’s S&P/ASX 200 was 2.3 per cent higher while the Topix in Japan was up 2.8 per cent. In South Korea, the Kospi gained 2.3 per cent.

US stock futures also rose, with the benchmark S&P 500 set to gain 1.3 per cent when markets reopen.

The S&P 500 ended Monday 2.9 per cent lower as investors awaited a fiscal stimulus package to support the country’s economy during the outbreak. That fall came despite the Fed unleashing its most forceful efforts to date, pledging to buy government bonds in unlimited amounts and to provide a backstop to the US corporate debt market.

Democrats on Monday stopped a $2tn economic stimulus package from advancing in the Senate for a second time, insisting it include stricter limits on how big businesses use the rescue funds.

More than 42% of the US now under ‘stay at home’ orders

Peter Wells reports from New York

New Mexico has become the latest state to issue a stay at home order, bringing the proportion of the US population under lockdown now and in coming days to more than 40 per cent.

The order from the south-western state, which comes into effect at 8am on March 24, means the number of US states ordering residents to stay at their residences more than doubled on Monday to 15. Indiana, Massachusetts, Michigan, Ohio, Oregon, West Virginia and Wisconsin made such announcements earlier in the day.

The 15 states where those orders are effective or about to come into effect cover just over 42 per cent of the population in the 50 states and District of Columbia.

The number of confirmed coronavirus cases in the US has soared to more than 41,000 as of Monday, 579 of whom have died, according to Johns Hopkins University. That is more cases than any country after China and Italy, and the number of people who test positive is expected to continue to rise rapidly as the US ramps up the ability to test people with symptoms.

New York is the hardest-hit state, with the number of confirmed cases rising by 5,707 in the past 24 hours, Governor Andrew Cuomo announced on Monday, bringing the total number of cases to 20,875.

Some individual cities and counties have issued stay at home orders, even though the states have not. As such, the proportion of the population affected by those restrictions probably exceeds 42 per cent.

Texas, the US’s second most-populous state, does not have a stay at home order in place, but local media reported the capital, Austin, was expected to take this route tomorrow, following in the footsteps of Dallas and Waco.

New York City area sees 28% of all tests coming back positive

Peter Spiegel reports from New York

New York City, which has overtaken Seattle as the biggest coronavirus hotspot in the US, has seen 28 per cent of its tests coming back positive, suggesting the virus has been circulating in America’s largest city for weeks.

Deborah Birx, the co-ordinator of the White House’s coronavirus task force, said the 28 per cent rate for the New York City area far outstrips the national average of less than 8 per cent.

“So to all of my friends and colleagues in New York, this is the group that needs to absolutely social distance and self-isolate at this time,” said Dr Birx. “Clearly the virus had been circulating there for a number of weeks to have this level of penetrance into the general community.”

Earlier in the day, Andrew Cuomo, the New York governor, said the state had recorded 5,707 new cases in the past 24 hours, with 4,300 of them in either New York City or suburban Westchester County. New York City now has 20,875 cases, more than all but five countries.



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Finance

COVID-19 crisis means financial trouble, creative opportunity for London non-profits, leaders say

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Non-profit agencies in London are taking a pounding in the coronavirus fallout, with just some of those groups losing more than $9 million combined in the first two weeks after the global pandemic was declared.

Leaders in the sector say the crisis spells huge trouble for local organizations, but is also opening the door to innovation and creativity.

“This is really difficult. There is that shared grief,” said Michelle Baldwin, head of the Pillar Nonprofit Network, which supports 600 such groups in London.

When Pillar surveyed its members to begin to gauge the devastation of COVID-19, the response was immediate – nearly a third of its members responded within a day – and the numbers stark.

By March 24, about 90 agencies who responded to the survey had lost nearly $9.1 million in revenue, with tens of millions more looming.

One organization said it stands to lose $1.1 million every week. Another predicted an imminent $10 million loss.

Others, about a quarter of those who answered the survey, didn’t yet know how much revenue they’d lost. A smaller portion said they hadn’t lost any revenue.

About a third of those who responded to the survey said their mission was at risk. Forty-four per cent reported staff layoffs, reduced hours or wage cuts. Only two per cent said COVID-19 was having no, or limited, impact in the short-term.

Baldwin said the results underline the value of the work these organizations do locally.

“It is about recognizing the importance of the non-profit sector. We need it here, and afterward,” she said. “Social enterprises are both social and economic drivers.”

In many ways, the dramatic numbers are no surprise.

Western grad Brian Emmett – chief economist for the charitable and nonprofit sector with Imagine Canada, a national umbrella organization – estimated the country’s registered charities will see financial losses between $9.5 billion and $15.7 billion this year, depending on how long social distancing lasts. He predicts somewhere between 118,000 and 194,000 people will be laid off.

And those numbers doesn’t include any of the non-profit groups that aren’t registered charities.

Cancelled events and fundraisers hit bottom lines hard in London, as elsewhere.

Those are often key to bringing thousands of dollars in donations through the door. Individual donations may also have dipped as Londoners watched markets tank and layoffs happen in light of COVID-19.

Much of the losses were also rooted in the sale of goods and services that had to be stopped, quickly, after the provincial government declared a state of emergency. Baldwin said earned revenue usually makes up almost half of expected revenue for non-profits and charities.

United Way Elgin Middlesex has also cut funding to agencies for programs that aren’t operating because of the virus, CEO Kelly Ziegner said.

Given the uncertainty now over its own finances, the United Way has also told agencies that funding for them is guaranteed for three months only, and will be provided in monthly installments, Ziegner said.

“We have a number of agencies where their programs simply aren’t operating, for example, school-based programs. We’ve paused that funding. We can’t fund programs that don’t operate. It’s just a reality.”

Those cuts add up to about $75,000 in funding a month, she said.

Usually, the United Way provides agencies stable funding for a year or more, Ziegner said.

But, now,  “It’s very hard for us to commit long-term to our agency partners.”

At the end of three months, the United Way will assess its contributions to agencies, she said.

That should give agencies some time to make additional funding plans, or pivot to services – such as food supply and delivery — that are essential, Ziegner said.

United Way Elgin Middlesex relies on payroll deductions (from corporate campaigns) for about 40 per cent of its funding, she said.

The organization is still assessing what the impact of businesses closing and layoffs will mean for those contributions, Ziegner said.

“If people are not being paid, those contributions and that source of revenue will erode for us.  So we’re just trying to get a handle on that. That would our biggest concern in the short term,” she said.

“Could more cuts come? Potentially. But until we have a bigger understanding of the financial picture, it’s hard to say.”

Government funding commitments have, so far, remained stable, Baldwin said. And some relief has been announced since the survey was sent to Pillar members. One of the agency’s roles is to advocate for its members at all levels of government.

And many organizations are showing the power of resilience and perseverance, pivoting to new virtual strategies and using innovative ideas to stay alive, Baldwin said.

Pillar has started a support group for executive directors to share ideas, successes and worries with one another, in addition to other support for members.

“We always talk about the cross-sector collaboration,” Baldwin said.

“If ever there was a moment for that to be our focus and our way forward, it is needed now more than ever.”

mstacey@postmedia.com

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Bitcoin’s Correlations With Global Financial Assets Soar Amid Coronavirus Crisis

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Many investors hold Bitcoin (BTC) as a hedge against the global financial system. However, as the numbers show, Bitcoin has not been spared from the recent COVID-19 financial crisis.

This article will analyze the movement of global financial markets and its correlation with Bitcoin during the COVID-19 crisis. We’ll consider the following sources as price measures for the following.

The recent crash has really challenged Bitcoin’s claim as “digital gold” and puts its assertion as a financial “safe haven” to the test.

Related: Is Bitcoin a Store of Value? Experts on BTC as Digital Gold

A 21-day rolling correlation graph shows that Bitcoin has recently become increasingly correlated with other global financial assets. 

This statistic should be worrisome for cryptocurrency investors trying to find a respite in the midst of all the financial chaos.

Has gold fared any better?

Before we give “digital gold” such a hard time, we should note that physical gold hasn’t sheltered investors from this financial storm either. 

Correlations between gold and other financial assets have also soared during this time, signaling that the world’s financial markets are more interconnected than ever before.

The importance of low, or negative, correlation

Harry Markowitz, the father of the modern portfolio theory, postulated that the most important aspect of risk to consider is an asset’s contribution to the overall risk of the portfolio, rather than the risk of the asset in isolation.

Therefore, a portfolio is not riskier if it contains Bitcoin, which is a more volatile asset, and it is uncorrelated or negatively correlated with the other holdings in the portfolio.

Uncorrelated assets are the envy of portfolio managers because they can reduce volatility and improve risk-adjusted returns. Many portfolio managers keep Bitcoin as an alternative asset in their portfolio for this reason alone.

If Bitcoin does not remain uncorrelated with the rest of the financial market, then it may be viewed as a significantly less desirable, risky asset by asset managers and the institutional market. A decrease in institutional interest could mean large sell-offs and fewer fiat inflows into the market.

So far, this is not the case

Despite a recent uptick in its correlation, a portfolio comprising 80% stocks and 20% Bitcoin would have outperformed a portfolio of 100% stocks from a risk-adjusted return perspective within the last three months and also within the last year.

However, if we were to just look at the last month, Bitcoin would have been better off avoided.

It is true that Bitcoin has remained a relatively detached and uncorrelated asset in times of economic prosperity. But that is not enough. For it to be considered a true financial safe haven, it must be robust against shocks reverberating through other financial markets. Especially in times of turmoil, the asset’s performance should be placed under heavy scrutiny.

Hopeful for a rally

Nevertheless, Bitcoin’s recent price rally has shown signs of promise. This may provide hope to cryptocurrency holders — especially if other assets continue to tank.

Do cryptocurrency indices provide better diversification?

The HODL30 index, a portfolio comprising the top 30 cryptocurrencies by market cap, was less correlated to the overall financial market than Bitcoin. The correlation between the index and American stocks was significantly lower than the correlation between Bitcoin and U.S. stocks.

If cryptocurrency investors want to shield themselves from global market fluctuations, indices may become increasingly relevant.

Time will tell whether Bitcoin or any cryptocurrency will live up investors’ lofty expectations as a financial safe haven. In a tight-knit, interconnected financial system, such a thing may prove impossible. 

Perhaps the culling of fickle cryptocurrency investors during a time of crisis will leave only the strong and sturdy, dampening future volatility. Or, this price crash will set a precedent for investors to scramble for cash whenever the next financial crisis brews because Bitcoin can no longer be trusted to shelter them. 

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Anthony Xie is the founder of HodlBot, a trading tool that enables cryptocurrency investors to automate their trading strategies.



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‘We are facing the biggest financial crash for 100 years’, economists warn

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‘We are facing the biggest financial crash for 100 years’: Economists warn the UK economy could shrink by 7.8 per cent overall in 2020

  • The economy is now predicted to shrink by an astonishing 7.8 per cent overall
  • It represents the most severe hit to livelihoods since a 13 per cent slump in 1921
  • An economist said this year’s crash would easily surpass 2008 financial crisis

Britain’s economy is set to suffer its worst year for a century as the jobs market is crippled by the coronavirus lockdown and firms go bust, economists warned last night.

The economy is now predicted to shrink by an astonishing 7.8 per cent overall in 2020, analysis by banking giant Nomura has found.

That would represent the most severe hit to livelihoods since a 13 per cent slump in 1921, when Britain’s exports collapsed and the post-First World War boom was ended by a fierce deflationary spiral.

George Buckley, UK economist at Nomura, said this year’s crash would easily surpass the 2008 financial crisis – when the UK economy suffered a 4.2 per cent fall – and the lows of the Second World War. 

The economy is now predicted to shrink by an astonishing 7.8 per cent overall in 2020, analysis by banking giant Nomura has found. Pictured: a London restaurant which has shut

The economy is now predicted to shrink by an astonishing 7.8 per cent overall in 2020, analysis by banking giant Nomura has found. Pictured: a London restaurant which has shut 

‘This will be the worst year for GDP for just shy of a century,’ he added. ‘The worst data we’ve seen since the depression of 1921 was during the final stages of the Second World War, when GDP fell by 4.6 per cent.’

Separate figures obtained by The Mail on Sunday show the jobs market has deteriorated far more quickly than it did after the 2008 crash.

Britain’s largest recruitment website Reed said the number of new vacancies being advertised has fallen by the same amount in three weeks as it did in nine months during the crisis just over a decade ago.

Vacancies on the Reed website last week dived 63 per cent from 59,000 to 22,000. That followed drops of 45 and 55 per cent in the previous two weeks.

George Buckley, UK economist at Nomura, said this year's crash would easily surpass the 2008 financial crisis – when the UK economy suffered a 4.2 per cent fall – and the lows of the Second World War. Pictured: shops are shut in London

George Buckley, UK economist at Nomura, said this year’s crash would easily surpass the 2008 financial crisis – when the UK economy suffered a 4.2 per cent fall – and the lows of the Second World War. Pictured: shops are shut in London

James Reed, chairman of Reed, said: ‘I’ve never seen anything like this. The shock waves now are much larger and faster. This is going to have a seismic impact on employment and we need to make sure it is not catastrophic.’

A memo circulated among bank bosses, seen by the MoS, shows half of the UK’s 5.8 million small and medium-sized businesses face running out of cash in just eight weeks. 

The note, from credit reference firm Experian, also warns of a consumer debt crunch, with borrowers unable to pay off their debts as they lose their jobs, become furloughed or see their earnings slashed.

The report said most families now have little to no savings to fall back on following a decade of record low interest rates. It added: ‘Even those on 80 per cent of salary may see their finances stretched and may need to resort to credit.’

Kristalina Georgieva, head of the International Monetary Fund, said: ‘This is a crisis like no other. Never in the history of the IMF have we witnessed the world economy coming to a standstill. It is way worse than the global financial crisis.’

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