Covid-19 causes record slump in United Kingdom business activity

A member of the public wearing a protective mask cycles past an empty London Eye during the Corona Virus outbreak London

A member of the public wearing a protective mask cycles past an empty London Eye during the Corona Virus outbreak London

IHS Markit's flash eurozone composite output index - which measures both the services and manufacturing sectors - slumped to 31.4 from 51.6 in February.

Coronavirus is starting to hammer economic activities and choke global growth, surveys of purchasing managers in five countries and the eurozone revealed on Tuesday.

Businesses in the eurozone suffered "an unprecedented collapse" in March because of the novel coronavirus pandemic, according to a closely watched indicator released Tuesday by IHS Markit, AFP reported.

Any reading below 50 signifies decline.

Though companies were optimistic that business activity would increase over the coming year, the degree of business confidence was by far the lowest ever in the survey's history amid concerns over the duration of the shutdowns and the impact of the coronavirus outbreak, IHS Markit said. Composite PMI - the weighted average of the two readings - plunged from 51.9 to 30.2, suffering its sharpest decline in almost 22 years of data collection.

It agreed that "April's data could be even worse" and pointed to the eurozone's 2020 first-quarter GDP plunging by at least three percent compared with the last three months of 2019.

USA manufacturing and service activity tumbled in March according to a preliminary reading from HIS Markit. The services business activity index plunged to 39.1, also a new series low, while the manufacturing PMI fell to 49.2, a 127-month low.

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"Another awful set of numbers", Vistesen said, describing them as "grim".

The Bank of England, in turn, has said it will buy a record 200 billion pounds of extra assets, mostly government debt, and cut its main interest rate to a record-low 0.1%.

"The coronavirus outbreak represents a major external shock to the macro outlook, akin to a large-scale natural disaster", analysts at BlackRock Investment Institute said in a note. "The economy was in rapid decline even before the lockdown announced last night".

March also saw the largest monthly cull in staff since July 2009, as firms in the services and manufacturing sectors looked to slash their payroll. Services activity tumbled from 52.6 to 28.4, a record low.

The Flash UK Services Business Activity Index for March read at 35.7, down from February's 53.2 and is once more a record low for the survey. The latest US effort on that front remains stalled in the Senate as Democrats said it contained too little money for hospitals and not enough limits on funds for big business.

"I think we have reached a maybe some kind of equilibrium trading range in safe-havens, so. given the prospect for the economic downturn and much more issuance going forward, I think the level where yields are settling down is the place for them to be", said DZ Bank strategist Rene Albrecht.

The manufacturing PMI is a surprise but the market is likely to shrug it off, similar to the German one earlier today.

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