FTSE 100, Unilever take a huge hit, as Bank of England warns of worst economic crisis in centuries


The UK’s FTSE 100 fell on Thursday as the coronavirus lockdown and downward spiral of the economy sets in.

Britain’s stock index was down 0.3 per cent at 5,750 points after climbing more than two per cent on Wednesday. It had fallen roughly five per cent on Monday however, oil prices plummeting, appeared to rock investors more.

Meanwhile, consumer goods company Unilever said the coronavirus lockdown measures took a toll on its quarterly sales as it prepares for "lasting changes in consumer behaviour" as it assesses the impact of the coronavirus ciris on spending.

The Anglo-Dutch firm said thatit is assessing the impact of the global pandemic crisis on spending.

The company said that it had seen a surge in "hygiene and in-home food products" but had taken a hit to its "food service and ice cream business" in the first quarter of the year, due to people staying at home to avoid the virus.

Alan Jope, chief executive of the FTSE 100 company, said: "We are adapting to new demand patterns and are preparing for lasting changes in consumer behaviour, in each country, as we move out of the crisis and into recovery."

The company maintained its dividend but withdrew full-year guidance because of the continuing uncertainty over the duration of the pandemic.

Turnover during the three months to March was flat at €12.4bn (£10.8bn), but the company's share price has proved counter cyclical, rising 6.2pc since the start of April to £4.24.

Meanwhile, one of the Bank of England’s top policymakers has warned that the UK could be suffering its worst economic shock in several hundred years.

Gertjan Vlieghe, a member of the BoE’s interest-rate setting committee, made this warning in a speech on Thursday morning.

He said that based on the early indicators, and the experience in other countries that were hit in some cases hit earlier than the UK, it appears that the UK is experiencing an economic contraction that is faster and deeper than anything that has been seen in the past century, or possibly several centuries. Vlieghe says that the Covid-19 virus, and the lockdown, has created both a supply shock (because people can’t work) and a demand shock (because normal consumption patterns are disrupted by the lockdown).

He added: “This economic shock is also ‘highly asymmetric’- as some sectors are much worse hit than others. Today’s PMI report, for example, showed that financial services is coping much better than car manufacturing and textile making.

The scale of the collapse is having a major knock-on effect in the world’s fifth-largest economy and will add to doubts about whether financial help from the government has reached businesses quickly enough.


Data firm Markit’s UK Composite PMI, which tracks activity across the economy, has drastically fallen to just 12.9 for April. It is down from 36 in March, and much worse than forecasters predicted.Any reading below 50 shows a contraction. The latest figures are the worst reading since Markit started recording this data more than two decades ago. Both manufacturing and services companies reported a collapse in business this month, confirming that the Covid-19 lockdown is pushing the UK into a severe recession. Chris Williamson, chief business economist at IHS Markit, said: “The dire survey readings will inevitably raise questions about the cost of the lockdown, and how long current containment measures will last.”

Elsewhere,the impact in Europe was lighter.The pan-European Stoxx 600 was up 0.5 per cent. Germany’s Dax was 0.3 per cent higher and France’s CAC 40 had climbed 0.9 per cent.

Asian stocks were mixed overnight as uncertainty set in among investors. China’s Shanghai composite index was down 0.3 per cent and Australia’s ASX was off by 0.1 per cent.

Japan’s Nikkei 225 was 1.5 per cent higher while Hong Kong’s Hang Seng was up 0.6 per cent.

The US is due to release its weekly jobless claims figures it was annouced on Thursday. Figures from the last few weeks have been unprecedented, with 22 million Americans making a new claim for unemployment insurance in just a month.

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