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Fri, 3 April 2020

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Coronavirus could mean economic growth downgrade for UK, warns Mark Carney

Coronavirus could mean economic growth downgrade for UK, warns Mark Carney
2 min read

The coronavirus outbreak could cause UK economic growth to be downgraded as stock markets tumble around the world, Mark Carney has warned.

The outgoing governor of the Bank of England said global supply chains “are getting a little tight” as COVID-19 continues to spread, while global tourism has also been hit.

On Friday morning the FTSE-100 of leading UK companies opened more than 3% down, after the US Dow Jones suffered its biggest one-day drop in its history, falling by almost 1,200 points on Thursday.

Stock markets in Asia also tumbled, helping contribute towards the worst week for global finance since the financial crash of 2008.

In an interview with Sky NewsMr Carney said: “There's less tourism - as you can see on our streets here in the UK. That's lower activity as well.

"We would expect world growth would be lower than it otherwise would be, and that has a knock-on effect on the UK.

"We're not picking that up yet at all in the European and UK economic indicators, but if the world is slower than the UK, a very open economy, will have an impact."

His comments come after the UK’s Chief Medical Officer said schools could be shut down for two months to help prevent the potential spread of the virus.

Professor Chris Whitty said it is "just a matter of time" until the situation gets worse in this country, and thar there could be a "social cost" if the virus intensifies and becomes "out of control".

As of Friday morning there were 19 confirmed cases in the UK after the first positive results in Northern Ireland and Wales were reported.

Mr Carney, who will be replaced as governor by Andrew Bailey next month, added: "It's too early to tell what it means for the UK, or its magnitude.

"But the most important thing is to make sure the system is functioning. We're very confident about that, and we're on top of it."


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