Britain’s premier share index closed down on Budget day as the World Health Organization declared coronavirus a pandemic
FTSE 100 index finished in negative territory on Budget Day, joining global indices in plunging yet lower as the coronavirus crisis deepens.
Britain’s premier share index had been higher before lunch, and after a BoE rate cut, before seeing gains ebb away as new Chancellor Rishi Sunak set out his first budget against a highly challenging backdrop. The World Health Organization (WHO) has now officially labelled the coronavirus as a pandemic.
Today’s budget was designed to get the country through the virus and ease the economic pain. Sunak unveiled a £30bn stimulus package for this year alone to help combat the virus, including at least £5bn for the NHS and £7bn for businesses and employees, but the market appeared indifferent.
Coronavirus cases have now reached 456 in the UK. Worldwide there are 118,000 cases in 114 countries.
Footsie closed down over 83 points at 5,876. FTSE 250 shed over 207 points at 17,339.
Wall Street shares also plunged The Dow Jones tanked 1,171 points, or 4.73% and the S&P 500 lost 120 points.
Most economic shocks usually have fairly predictable consequences; however this coronavirus has completely changed the economic landscape as well as the political mood around the politics of balancing the books, noted analyst Michael Hewson at CMC Markets.
Chris Beauchamp at IG added: The Chancellor of the Exchequer might have been forgiven for hoping for a bigger reaction to his budget, but as an ex-hedge funder he will know that the actual market move rarely matches expectations.
The Sunak budget though, noted the analyst, marked “a sensible and welcome departure from the austerity of old, and it should mark only the first step on a road to more expansive fiscal policy”. But markets have mostly shrugged their shoulders, failing to be enthused by the Conservatives’ new devotion to spending.