UK government calls coronavirus Cobra meeting
By Sean Farrell
Date: Friday 28 Feb 2020
(Sharecast News) - The UK government called a meeting of its Cobra emergency committee to coordinate its response to the coronavirus outbreak as the Governor of the Bank of England warned about the disease's potential effect on the economy.
Boris Johnson's government will hold a Cobra meeting on Monday after Conservative politicians criticised its handling of the virus, which is continuing to spread in the UK.
The government reacted after first coronavirus case in Wales was confirmed and two more were identified in England, taking the UK total to 19. The patient in Wales had travelled back from Italy, the most severely hit countries outside Asia.
The virus has spread to 53 countries with Nigeria and New Zealand reporting their first cases. The number of cases rose to 60 in Germany, Europe's biggest economy, where 1,000 people are in quarantine in the state of North Rhine Westphalia.
Nigeria's incidence marks the spread of the disease to sub-Saharan Africa and Africa's biggest economy. The patient, who is Italian, is in the densely populated city of Lagos, raising concerns that the disease could already be spreading in Nigeria and Africa.
BoE governor Mark Carney said the central bank had picked up from businesses and contacts that the coronavirus was going to affect economic activity - just as the economy appeared to be recovering after stagnating at the end of 2019.
"Things are getting tight," Carney told Sky News. He said it was hard to judge how bad the outbreak was and how long it would last but "the direction is down". Carney hands over to Andrew Bailey before the next monetary policy meeting in March but his comments suggest an interest cut has become more likely.
Britain's two biggest airlines warned on Friday that they could not estimate the impact on annual earnings as the virus took hold in Europe. EasyJet has cancelled flights to and from Italy and put in place cost-cutting measures. British Airways' owner IAG said it had also seen a drop in demand over the past week in Italy and other European markets.
EasyJet and IAG shares fell again on Friday after heavy declines during the week. Asian and European shares tumbled as investors took shelter in safer assets. The FTSE 100 index was down 3% to 6591.65 at 11:50 GMT and the European Stoxx 600 index dropped 3.1%% to 3347.73. Japan's Nikkei fell 3.7% to 21142.96
The UK government has faced rising criticism over its handling of the emergency. With a ban in place on ministers appearing on certain BBC programmes it was left to former health secretary Jeremy Hunt, who chairs the health select committee, to say the government needed to set out the social and economic consequences of limiting the virus's spread.
Hunt said: "The question we have to ask ourselves, and I think the government is right to start to spell this out - but I think they need to go further - is what are the social and economic trade-offs that we are prepared to make to keep the spread of the virus at that low level."
The former chancellor George Osborne was more forthright in calling for urgent government action. He tweeted: "The British government now needs to go onto a 'war footing' with the coronavirus: daily NHS press briefings, regular Cobra meetings chaired by the PM, ministers on all major media shows. The public is fearful, wants information and needs to know their leaders have got a grip."
Economists are worried about the virus's effect on the global economy if people stop travelling, events are called off and a vicious spiral of confidence takes hold. In Switzerland, the government's ban on events for more than 1,000 people scrapped the Geneva motor show, due to start on Monday. Other events that have been shelved include the Geneva watch show in April, the World Mobile Congress in Barcelona and the Venice Carnival.
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