Yahoo Finance Coronavirus: Pound slumps as Britain braces for three week lockdown extension
The pound slumped against the US dollar (GBPUSD=X) in trading on Thursday 16 April as Britain braces for potentially, at least, another three weeks of lockdown.
UK ministers are later expected to announce at the daily government press conference a three-week extension to help prevent the spread of COVID-19.
The longer the lockdown continues, the longer businesses will remain closed, threatening large scale job losses, firms falling into administration, and the economy being put on hold.
While the UK government has yet to officially announce a lockdown extension, the minister of Scotland, Nicola Sturgeon, said at a press conference three days ago that Whitehall is likely to announce continuing lockdown measures on Thursday.
The pound against the US dollar is currently down 0.4% from the previous day.
UK ministers are bound by law to assess whether the lockdown rules are working, every three weeks.
A number of European countries have already extended their lockdowns. On Wednesday, chancellor Angela Merkel announced that Germany would extend its current lockdown for another two-and-a-half weeks, until 3 May. Earlier, France confirmed it would be extending the lockdown to 11 May.
Read more: Europe's largest economy extends coronavirus lockdown until May 3
The International Monetary Fund (IMF) said on Tuesday the global pandemic is likely to cause the worst recession since the Great Depression of the 1930s and do lasting damage to the global economy.
Already, the British Chamber of Commerce (BCC) said this week that its members were struggling to access the financial support promised by the UK government last month, setting many up for a potentially devastating cash crunch at the end of the month. Around two-thirds of businesses have furloughed staff.
Late on Wednesday, fashion chains Oasis and Warehouse were the latest to have fallen victim to the impact of coronavirus. Both collapsed into administration, with more than 200 workers losing their jobs and more than 1,800 others at risk.
Deloitte confirmed on Wednesday they had been called in as administrators, and warned of the “devastating effect” of the coronavirus pandemic on the retail industry.
The president of the European Commission has also called for a €1tn (£871bn, $1.08tn) “new Marshall plan” to revive European economies when they start to get a grip on the coronavirus.
The European Union published its “joint European roadmap” for lifting COVID-19 containment measures on Wednesday. It has called for member states to co-ordinate plans for easing restrictions, with fears lifting lockdowns too early and countries’ divergent approaches could undermine global efforts to tackle to virus.
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