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You can find the current article at its original source at https://www.theguardian.com/business/2020/mar/02/bank-of-england-ready-to-act-as-cost-of-coronavirus-mounts
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| Economic powers offer emergency help in coronavirus crisis | Economic powers offer emergency help in coronavirus crisis |
| (about 3 hours later) | |
| Markets rally after governments, central banks, IMF and World Banks agree to do ‘whatever is needed’ | Markets rally after governments, central banks, IMF and World Banks agree to do ‘whatever is needed’ |
| The world’s economic powerhouses launched a coordinated push to show they can cope with the fallout from coronavirus, after the Organisation for Economic Cooperation and Development (OECD) warned global growth could be cut in half. | The world’s economic powerhouses launched a coordinated push to show they can cope with the fallout from coronavirus, after the Organisation for Economic Cooperation and Development (OECD) warned global growth could be cut in half. |
| Governments, central banks and international economic institutions agreed on Monday to do whatever it takes to prevent economic meltdown, prompting signs of recovery on stock markets still reeling from their worst week since the financial crisis of 2008. | Governments, central banks and international economic institutions agreed on Monday to do whatever it takes to prevent economic meltdown, prompting signs of recovery on stock markets still reeling from their worst week since the financial crisis of 2008. |
| The Bank of England joined the US Federal Reserve and the Bank of Japan in promising to take action if necessary, fuelling expectation that they will turn to interest rate cuts as a stimulus measure. | The Bank of England joined the US Federal Reserve and the Bank of Japan in promising to take action if necessary, fuelling expectation that they will turn to interest rate cuts as a stimulus measure. |
| Rate cuts are seen as a means of driving economic activity because they ease the burden on people and businesses struggling with debt interest payments and make it cheaper to borrow for anyone planning to invest. | Rate cuts are seen as a means of driving economic activity because they ease the burden on people and businesses struggling with debt interest payments and make it cheaper to borrow for anyone planning to invest. |
| The FTSE 100 climbed by slightly more than 1.1% on Monday, having lost 11% last week, while on Wall Street, the Dow Jones closed closed 1,293 points higher at 26,703, its largest ever one-day rise in points and a 5.1% increase, the most since March 2009. | |
| Finance ministers of the G7 group of major economies have scheduled a conference call for Tuesday to discuss ways to cushion the blow being dealt to world trade. | Finance ministers of the G7 group of major economies have scheduled a conference call for Tuesday to discuss ways to cushion the blow being dealt to world trade. |
| And the International Monetary Fund and World Bank issued a joint statement saying they stood ready to help the worst affected countries by providing “emergency financing, policy advice, and technical assistance”. | And the International Monetary Fund and World Bank issued a joint statement saying they stood ready to help the worst affected countries by providing “emergency financing, policy advice, and technical assistance”. |
| The display of global cooperation came after the OECD warned that an escalation in the Covid-19 outbreak could slash global growth by half this year, to 1.5%, and urged governments around the world to take greater steps to work together. | The display of global cooperation came after the OECD warned that an escalation in the Covid-19 outbreak could slash global growth by half this year, to 1.5%, and urged governments around the world to take greater steps to work together. |
| The Bank of England indicated it was ready to cut rates if necessary to shore up demand in the UK economy. | The Bank of England indicated it was ready to cut rates if necessary to shore up demand in the UK economy. |
| “The Bank is working closely with HM Treasury and the FCA [Financial Conduct Authority] – as well as our international partners – to ensure all necessary steps are taken to protect financial and monetary stability,” a spokesman said. | “The Bank is working closely with HM Treasury and the FCA [Financial Conduct Authority] – as well as our international partners – to ensure all necessary steps are taken to protect financial and monetary stability,” a spokesman said. |
| The Fed’s next meeting to discuss rates begins on the 17 March, while the Bank’s monetary policy Committee meets from 26 March. Rate cut decisions are typically published shortly after these meetings. | The Fed’s next meeting to discuss rates begins on the 17 March, while the Bank’s monetary policy Committee meets from 26 March. Rate cut decisions are typically published shortly after these meetings. |
| Bond market movements indicate that investors are expecting the US Federal Reserve to cut rates by half a basis point and the Bank of England by a quarter of a point. | Bond market movements indicate that investors are expecting the US Federal Reserve to cut rates by half a basis point and the Bank of England by a quarter of a point. |
| But even as central banks sought to bring calm to markets, the effect that the virus is having on business widened further. | But even as central banks sought to bring calm to markets, the effect that the virus is having on business widened further. |
| British Airways and Ryanair announced the cancellations of hundreds of flights on Monday, as falling passenger demand forced the carriers to stem their financial losses. BA said it would cut 432 services, largely to Europe but including a dozen London to New York flights, between 16 and 28 March. Ryanair said it would cut a quarter of its flights to and from Italy between 17 March and 8 April. | British Airways and Ryanair announced the cancellations of hundreds of flights on Monday, as falling passenger demand forced the carriers to stem their financial losses. BA said it would cut 432 services, largely to Europe but including a dozen London to New York flights, between 16 and 28 March. Ryanair said it would cut a quarter of its flights to and from Italy between 17 March and 8 April. |
| Tourism and aviation have felt the full effect of the outbreak amid curbs on travel to affected areas and sliding consumer demand. TUI, easyJet and the British Airways owner, International Airlines Group, all suffered share price falls of more than 20% last week. The holiday money firm Travelex joined them on Monday, saying it also expected to feel the effect of a slump in air passenger numbers. | Tourism and aviation have felt the full effect of the outbreak amid curbs on travel to affected areas and sliding consumer demand. TUI, easyJet and the British Airways owner, International Airlines Group, all suffered share price falls of more than 20% last week. The holiday money firm Travelex joined them on Monday, saying it also expected to feel the effect of a slump in air passenger numbers. |
| Travelex said: “The outbreak of Covid-19 is an incremental negative for Travelex’s business, given broad exposure to airports and travel flows. | Travelex said: “The outbreak of Covid-19 is an incremental negative for Travelex’s business, given broad exposure to airports and travel flows. |
| “VAT and related services will also be negatively impacted. While China and other Asian in-country revenue account for approximately 10% of Travelex revenues, other markets closely linked to Asian outbound travel are also experiencing headwinds.” | “VAT and related services will also be negatively impacted. While China and other Asian in-country revenue account for approximately 10% of Travelex revenues, other markets closely linked to Asian outbound travel are also experiencing headwinds.” |
| Consumer confidence has also suffered during February, according to one survey, taking its first drop in five months. | Consumer confidence has also suffered during February, according to one survey, taking its first drop in five months. |
| The measure of overall confidence in the state of the economy slipped from 107.6 in January to 107.1, according to the analysis from YouGov and the Centre for Economics and Business Research. | The measure of overall confidence in the state of the economy slipped from 107.6 in January to 107.1, according to the analysis from YouGov and the Centre for Economics and Business Research. |
| UK factory output experienced “a noticeable impact on supply chains during February”, according to the latest survey of manufacturing by the data firm IHS Markit. | UK factory output experienced “a noticeable impact on supply chains during February”, according to the latest survey of manufacturing by the data firm IHS Markit. |
| The Unison trade union called on the government to ensure that workers who aren’t eligible for sick pay are not penalised for self-isolating themselves if they believe they have symptoms of a disease that has infected more than 85,000 people and killed more than 3,000. | The Unison trade union called on the government to ensure that workers who aren’t eligible for sick pay are not penalised for self-isolating themselves if they believe they have symptoms of a disease that has infected more than 85,000 people and killed more than 3,000. |
| Unison general secretary Dave Prentis said: “Employees on zero-hours or precarious contracts are already on low wages. They now face financial hardship if they have to self-isolate. | Unison general secretary Dave Prentis said: “Employees on zero-hours or precarious contracts are already on low wages. They now face financial hardship if they have to self-isolate. |
| “The government must bring in emergency measures so these low-paid workers are protected financially, particularly those caring for the most vulnerable in society. | “The government must bring in emergency measures so these low-paid workers are protected financially, particularly those caring for the most vulnerable in society. |
| “It should be made compulsory for employers to give them sick pay, even if they’re not officially eligible.” | “It should be made compulsory for employers to give them sick pay, even if they’re not officially eligible.” |
| Goldman Sachs, which warned last week that US companies could experience no profit growth this year, became the latest global business to impose travel restrictions on staff. | Goldman Sachs, which warned last week that US companies could experience no profit growth this year, became the latest global business to impose travel restrictions on staff. |
| The Wall Street investment bank has banned “non-essential” travel is restricting travel to China, South Korea, Italy and Iran. | The Wall Street investment bank has banned “non-essential” travel is restricting travel to China, South Korea, Italy and Iran. |
| Nike has temporarily shut its European headquarters in Hilversum, the Netherlands, after an employee was infected with the coronavirus. The HQ is being disinfected. | Nike has temporarily shut its European headquarters in Hilversum, the Netherlands, after an employee was infected with the coronavirus. The HQ is being disinfected. |