Pound falls on prospect of Covid Plan B
By Jenni Reid
13:56, 8 December 2021
The pound was down against its main rivals on Wednesday afternoon as media reports suggested England could introduce stricter Covid rules this week.
Sterling fell 0.58% to €1.1682 against the euro, 0.33% to $1.3201 against the dollar and 0.11% to ¥150.1930 against the Japanese yen at 13:20 UTC on Wednesday.
The package of measures, dubbed Plan B, is likely to include a request for everyone who can to work from home; a legal mandate to wear face coverings in certain settings; and the introduction of a so-called vaccine passport system, showing vaccination, testing or recovery status to enter certain venues. Wales, Scotland and Northern Ireland already have Covid pass systems and stricter mask requirements in place.
A decision by government ministers on the new rules has not yet been made, and no clarification was given during a Prime Minister’s Questions session in parliament that was dominated by a row over whether a Christmas party was held in Downing Street last year.
WFH return?
On working from home, the government has previously said it “recognises this causes more disruption and has greater immediate costs to the economy and some businesses than the other Plan B interventions, so a final decision would be made based on the data at the time”.
A source told The Guardian’s chief political correspondent, Jessica Elgot, that new Covid rules are “imminent” and would include advice on home working.
Think tank the Institute for Economic Affairs today said it believed Plan B could cost the UK economy £4bn ($5.3bn) a month.
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Market reaction
The FTSE 100 was trading flat, while British Airways owner International Consolidated Airlines Group (IAG) was the biggest faller on the index, with its stock down 3.10% to 137.66p.
Low-cost airlines Easyjet (EZJ) and Wizz Air (WIZZ) were down by similar amounts as the situation yet again looked bleak – or at least unpredictable – for a rebound in international travel.
Despite no suggestion that hospitality venues would be forced to close again, shares in pub chain Wetherspoon (JDW) were down 2.5%, Mitchells & Butlers (MAB) fell 1.77%, while the Restaurant Group (RTN) was down 5.80%.
Read more: UK economy expected to return to pre-pandemic levels by 2022
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