Sterling and share prices were higher in early trading in London this morning, although detailed Brexit talks have had to be postponed.
The coronavirus has made all but impossible the face-to-face meetings initially planned for this week between UK officials and their European Union counterparts.
More limited contact is possible and likely using tele-conferencing and video-conferencing systems, but full-blown discussions have had to be put off.
Committed to the negotiations
Despite this, Foreign Secretary Dominic Raab has said there will be no request to extend the transition period currently in operation. Britain left the EU on 31 January, but is still applying its rules until the end of this year. At that point, it is hoped that a free-trade agreement between the UK and EU will have been signed.
This morning, day one of tough new restrictions on everyday life in Britain to help combat the coronavirus, share prices were higher. The blue-chip FTSE 100 index was 3.56% up at 5,171.47, while the FTSE 250, which is more representative of domestic British business, was 3.52% higher at 13,538.62.
Trade UK 100 - UK100 CFD
The BBC reported a Government spokesman saying: "Both sides remain fully committed to the negotiations and we remain in regular contact with the European Commission to consider alternative ways to continue discussions, including looking at the possibility of video conferencing or conference calls, and exploring flexibility in the structure in the coming weeks.
"We expect to share a draft FTA [Free Trade Agreement] alongside the draft legal texts of a number of the standalone agreements in the near future still, as planned."
“At least as bad as 2008”
Meanwhile, Prime Minister Boris Johnson announced yesterday that heightened measures were being taken to get to grips with the virus. Non-essential retail outlets have closed, people are being asked to restrict themselves to one walk, cycle or run a day in terms of exercise and to undertake only essential shopping.
Family members have been told not to visit each other’s homes, although there are exceptions for the children of separated parents. Anyone who can work from home has been urged to do so.
Even on the most optimistic reading, the economic impact of the virus will be huge. The UK’s entire hospitality sector has been closed down, as have gyms, bookshops, many clothing retailers and sports venues. Meanwhile, the public finances have been put to work to provide vast sums in compensation to businesses and people affected by the epidemic.
The International Monetary Fund (IMF) said: “As a consequence…IMF managing director Kristalina Georgieva predicts a global downturn at least as bad as the 2008 financial crisis, but expects a recovery in 2021.”