London Daily

Focus on the big picture.
Tuesday, Aug 11, 2026

Coronavirus: Global growth ‘could halve’ if outbreak intensifies

The global economy could grow at its slowest rate since 2009 this year due to the coronavirus outbreak, the Organisation for Economic Cooperation and Development (OECD) has warned.
The influential think tank has forecast growth of just 2.4% in 2020, down from 2.9% in November.

But it said a longer "more intensive" outbreak could halve growth to 1.5%.

It came after the Bank of England vowed to help stabilise markets, which suffered steep losses last week.

Coronavirus is already forcing businesses to suspend operations in China and elsewhere as officials try to contain its spread.

The OECD forecast the global economy could recover to 3.3% growth in 2021, assuming the epidemic peaked in China in the first quarter of this year and other outbreaks proved mild and contained.

But it said the picture would be much worse if the virus spread throughout Asia, Europe and North America.

"The main message from this downside scenario is that it would put many countries into a recession, which is why we are urging measures to be taken in the affected areas as quickly as possible," said Laurence Boone, the OECD's chief economist.

Last week saw major stock markets suffer their worst weekly performance since the 2008 financial crisis, with $1.5 trillion being wiped off the value of global shares. Investors now hope central banks around the world will work in unison to support financial markets as the deadly virus spreads.

On Monday, the Bank of England said it continued to monitor developments and was assessing its potential impact on the global and UK economies and financial systems.

"The Bank is working closely with HM Treasury and the FCA (Financial Conduct Authority) - as well as our international partners - to ensure all necessary steps are taken to protect financial and monetary stability," a spokesman said.

Japan's central bank and the US Federal Reserve have also said they are prepared to intervene to stop more big falls on global stock markets.

Buoyed by the news, US stocks opened higher on Monday, with the Dow Jones Industrial Average and S&P 500 indexes both gaining 0.7%.

London's FTSE 100 index closed 1.2% higher, while China's Shanghai Composite index gained 3.2% and Japan's benchmark index, the Nikkei 225, climbed 1%.

On Monday, the privately-run Caixin/Markit Manufacturing Purchasing Managers' Index showed the fastest rate of contraction in China's factory activity since the survey was launched in 2004. That followed the release on Saturday of equally weak official numbers.

Both sets of data come after employers across the country were ordered to remain closed after the annual Chinese New Year holiday as part of attempts by authorities to stem the spread of the virus.

The falls, which were even worse than the slump seen during the 2008 global financial crisis, highlighted the outbreak's huge impact on the world's second-largest economy.

The OECD said governments would have to step in if the virus worsened, providing extra support for their health systems and emergency loans for hard hit industries.

"A G20 coordinated health, fiscal and monetary policy response would not only send a strong confidence message but also multiply the effect of national actions," Mr Boone added.

Over the weekend senior officials in President Donald Trump's administration also tried to soothe concerns about the impact of the outbreak, highlighting the US economy's underlying strength.

US Vice-President Mike Pence, who is leading the administration's response to the coronavirus, said that the stock market "will come back", adding that "the fundamentals of this economy are strong".
Newsletter

Related Articles

0:00
0:00
Close
UK Manufacturing Output Records Fourth Straight Month of Growth
UK Condemns Russian Torture of Ukrainian Prisoners and Recruitment of Foreign Nationals
Long-Lost Royal Navy Warship HMS Tiger Found in English Channel After 118 Years
Northern Ireland Finance Minister Seeks Urgent Treasury Talks Over Regional Budget Pressures
UK Government Targets Subscription Traps and Misleading Discounts in New Consumer Rules
Alleged Cartel Boss Daniel Kinahan Extradited From Dubai to Face Criminal Charges
AI Chatbots Challenge Traditional News Consumption and Raise Job Concerns
Andy Burnham Government Promises Crackdown on Exploitative Business Practices
UK University Funding Model Faces Growing Pressure From Unsustainable Student Debt
Government Urged to Subsidise Energy Bills for Vulnerable UK Households
UK Military Spending Plans Threaten to Deepen Infrastructure Funding Gap
Israeli Government Rejects US Peace Framework for Gaza
New Labour Government Signals Closer Economic and Strategic Ties With European Union
Amber Heat-Health Alerts Issued Across England as Temperatures Threaten 36 Degrees
UK Economy Expected to Grow Despite Energy and Supply Chain Shock From Iran Conflict
Foreign Social Media Accounts Drove Disinformation During Belfast and Southampton Riots
Record Number of Migrants Cross English Channel in Single Vessel as Smugglers Deploy Mega-Dinghies
Russia’s A7 Builds a State-Linked Payments Network Beyond Western Sanctions
Reports of Mark Zuckerberg-Linked Superyacht Declining Rescue Assistance Draw Maritime Scrutiny
Preserving Three Banksy Artworks in London Has Cost Taxpayers Nearly £150,000
Four Ugandan Athletes Disappear From Delegation After UK Sporting Events
French Authorities Report Channel Interventions as Cross-Border Migration Dispute Continues
Home Office Admits Error in Settled Status Case Involving Long-Term Italian Resident
Unite Calls for Independent Review of UK Budget Watchdog's Fiscal Forecasting Rules
Thinktank Calls for £175 Annual Energy Bill Cut for Low-Income Households
Foreign-Linked Social Media Accounts Amplified Recent Unrest in Belfast and Southampton, Analysis Finds
London Mayor Sadiq Khan Orders Westminster to Drop Proposed Soho and West End Hospitality Ban
Royal Navy Deployments to Monitor Russian Activity in UK Waters Rise 25 Percent
UK Economy Expected to Grow 0.4 Percent in Second Quarter Despite Geopolitical Pressures
Andy Burnham Launches Cost-of-Living Measures Targeting Subscription Traps and Misleading Discounts
Hyper-Realistic Reborn Dolls Draw Collectors Seeking Comfort and Craft
Gen Z Cuts Back on Dating as a Night Out Nears $200
Patients Turn to Artificial Intelligence for Therapy as Psychiatrists Warn of Privacy and Clinical Risks
Couples Embrace ‘Sleep Divorce’ to Protect Rest and Reduce Tension
Meta Ordered to Pay $567 Million and Change Facebook and Instagram Safeguards for Children
Up to only 10 Months in Prison for Swedish Officer’s Murderer Sparks Anger
Success: Nvidia Turned Gaming Chips Into the Engine of the AI Boom
Jorge Messi, Lionel Messi’s Father and Longtime Agent, Dies at 68
AI’s Next Bottleneck Is Power, Not Just Nvidia Chips
Advertising trick: Pepsi’s Harrier Jet Commercial Led to a $700,000 Court Fight
Meta Raises AI Spending Target to as Much as $145bn Despite Pressure Over Returns
Danube Drought Exposes Nazi Wrecks and Pushes Central Europe’s Power System to the Brink
Joe Biden’s Cancer Has Spread Beyond His Bones, Hunter Biden Says
Air Traffic Control Outage Grounded Flights Across the Midwest
Why 2027 Could Be a Strong Year for Stocks—and Why the Forecast Is Fragile
Why Markets May Look Quiet in August After Big Tech Earnings
Partial Solar Eclipse Expected to Draw Interest Across Southwestern UK
UK Graduate Job Postings Fall 7% as Entry-Level Opportunities Remain Scarce
UK Private Sector Returns to Growth as July Activity Reaches Highest Level Since April
UK Summer Drought and Wildfires Raise Pressure for Stronger Environmental Measures
×