a virus spreading planes grounded trade
stalling and even sporting events
canceled inevitably markets are tumbling
but the sell-off
has turned into the worst week since the
global financial crisis more than a
decade ago smiles for the starting bell
in New York this share prices slumped
seconds later a week ago they were at an
all-time high in London the hundred
biggest companies are worth a staggering
210 billion pounds less then they were
just seven days ago I'd say this is
probably the most dramatic week I've
seen since my time here in the markets
that bad yeah
what trading floors in London say
they're witnessing is worldwide
contagion well we've really seen
investor panic gripping to markets
across the world we've seen the biggest
points drop in the Dow in its history
we've seen three trillion dollars wiped
off global markets within a week and
it's not just the equity markets this is
extended into other markets of well as
well we've seen a major slump in the oil
markets it's now in correction territory
correction territory trader talk for a
drop of 10% and she's talking about oil
one of the world's most in-demand
commodities the last time markets
behaved like this the 2008 financial
crisis this is another Black Swan event
something that no one could have
predicted and that's why we're seeing a
lot of panic in the markets and the risk
is that that does extend into a
recession and there are no reassuring
words coming from global institutions we
are likely to downgrade our growth
projections for the world
in Geneva he should be setting up not
stripping down but the Motor Show has
been cancelled 600,000 visitors and
hundreds of car manufacturers told stay
at home fear as much as the effects of
the virus is stalling trade and tourism
and sending the markets in to retreat
there's only so far stocks and shares
can slide before the question gets asked
did governments and central banks need
to kick in and take some action in the
US there's already speculation that the
Federal Reserve might be getting ready
to cut interest rates possible pressure
then for the Bank of England to follow
suit but interest rates are already very
low so low there's not much further for
them to go so how much of an effect will
any more cuts actually have rates are
zero or negative in some countries so
they don't have much room for maneuver
yet market expects central banks to come
out cut rates and reassure investors
that everything is fine but the kind of
policy that will be more helpful and
more effective in this situation is
fiscal policy more targeted measures to
help those companies those areas that
are mostly affected those targeted
measures in China include extending
large state loans to companies to keep
them afloat
tonight the government here said they
are well prepared for any effect
coronavirus may have on the UK economy
investors appear less confident though
and neither have a crystal ball while
the first British death the first cases
in Northern Ireland and Wales Boris
Johnson has said tonight the coronavirus
is the government's top priority
he said he discussed the UK's
preparedness with the health secretary
and the chief medical officer but he
won't be chairing an emergency cobra
meeting until Monday the reach of the
virus is spreading fast with nearly 60
countries reporting cases the World
Health Organization says it could reach
most if not all countries today Nigeria
New Zealand Lithuania Mexico and Iceland
all reported their first cases now most
the people have died at the infection
have been in mainland China with nearly
3,000 deaths outside China Iran South
and Italy have had the most victims here
20 people have now been diagnosed with
the illness four more in the past 24
hours here's our health correspondent
Victoria MacDonald in the aftermath of
the corona virus epidemic whenever
vetters experts will look to what
happened on the diamond Princess cruise
ship and ask what lessons could be
learned so far six people who were on
board have died including one Briton who
has not yet been named while more than
700 passengers and crew contracted
coffered 19 there have been scathing
reports about the quarantine measures of
officials sent to investigators it was
docked in Yokohama themselves falling
ill and of inadequate testing but there
will be lessons learned across the globe
today the World Health Organization said
49 countries have now reported cases our
epidemiologists have been monitoring
these developments continuously and we
have now increased our assessment of the
risk of spread and the risk of impact of
corvid 19 to bury high at global level
this is a message from the w-h-o that
says wake up get ready this virus may be
on its way and you have a duty to your
citizens and to the world to be ready
perhaps a message to to Iran where there
is concern that the numbers infected and
dying are far greater than officially
claimed they have now closed the
parliament and then the Shia holy city
of calm the center of the outbreak
they're using what one source told us
were chemical defense vehicles from the
iran-iraq war of the 1980s this time to
disinfect against this virulent virus
until this moment taking into account
the previous day's numbers 388 people
have been confirmed to have covered 19
in the country unfortunately 34 people
have died from this disease as of today
noon
some sources however have told us that
the death toll is far higher and that is
worrying already 97 cases have been
exported from Iran to 11 countries in
the UK where 19 people have now been
confirmed with the disease there have
been warnings that if the situation
worsens mass gatherings may have to be
canceled or schools closed in any
pandemic preparation the government has
broken fine line between protecting the
public and the social consequences so
the London Underground
adults feel sometimes lied
the NHS is preparing and details are
slowly being released but in an
extraordinary interview the MP for City
and Westminster today revealed that
contingency plans in London include
opening a morgue in Hyde Park intense
noticeably absent has been the Prime
Minister until today when perhaps
responding to criticism he first called
an emergency cobra meeting though not
until Monday and then tonight asked
about the death from the diamond
princess he said this I think it was we
were following the best medical advice
and I obviously I'm we regret any we
very much regret the loss of life of the
individual concern but you know we think
that the best thing to do is not to move
people around too much in the current
situation not to repatriate unless you
can be absolutely sure that there isn't
going to be a spread and a contagion to
this country so that's the the principle
that were adopting evidence from China
shows that those most at risk of dying
from this virus are men over the age of
80 with pre-existing health conditions
that is also the case that 80 percent of
people will have mild or no symptoms and
can recover at home and the hope though
increasingly fragile is that this
epidemic can still be contained well we
heard about the impact that all of this
is having on the markets so joining me
now from South West London is Lord
O'Neill former chief economist with
Goldman Sachs he served as the
commercial secretary to the Treasury in
David Cameron's government and published
a book superbugs and arms race against
bacteria Lord O'Neill global shares who
had their worst week since the financial
crisis our investors right to be scared
do you think well if they just spend the
last 10 minutes listening to your
discussion as I have I guess that plenty
of reasons to be scared it's it's
obviously a very troubling and complex
situation
I think before Sony answer anymore I
think it's important to remember that
from a global economics perspective this
came out of extremely unfortunate time
because we were just in December January
seeing some signs of vague stabilization
of the world economy after what had been
a somewhat worrying weakening throughout
2019 with China already at the heart of
that weakening and some countries that
are economically so successful at
benefitting from China's rise such as
Germany here in Europe or Japan in Asia
South Korea as well already suffering
from that so this this from an economic
perspective is particularly unfortunate
and of course as I'm sure you've touched
on in previous discussions China today
is five times the share of global GDP
that it was when we had SARS 17 years
ago so so should the World Bank the IMF
is step in to try and avert a global
recession and ease a global recession
now inevitable in your view so I would
imagine there must have been some very
interesting phone calls going on between
gee so-called g20 Sherpas which is the
the officials of the leading 20
economies around the world about being
ready to act it's not clear to me and I
heard one of your previous speakers it's
not clear to me what cutting interest
rates would do in the slightest for a
situation like this and indeed partly
linked to other challenges of our time
er but particularly issues to do with
the equality and both actual and
perceptions of it further measures on
interest rates or so-called quantitative
easing I don't think would be
particularly sensible or helpful in my
view social bonds providing liquidity
but well our our financial leaders
around the world so slightly powerless
in the face of this a rather unknown
threat so I think I think that can
provide a lot of liquidity to make sure
financial markets function properly and
in some countries that central bank can
play a role to help
make sure that the landing support might
be there but well I hope that this would
accelerate what in some countries
including the UK appears to be a growing
recognition that they can have a more
activist fiscal policy particularly in
terms of investment spending and I think
whether it be here Germany or China to
name just three really important places
the case for having a more aggressive
domestic fiscal policy response is very
clear to me and I hope that's what now
happens so governments piling in and
investing more by borrowing more I would
say that the case for that is is really
stronger one of the other aspects of
what's happening in the markets this
week is a is a further dramatic drop in
long-term bond yields so governments can
borrow what are historically
extraordinary low rates for a very long
term into the future and so if the were
a time to do things like that to invest
in infrastructure many of the topical
things that you have on your program
every other night and and other ones as
well this is this is a particularly
opportune time to perhaps even be more
ambitious about those things than they
might have been thinking just two or
three weeks ago in my view you had your
hands on the levers of power in
government from the outside now looking
in do you think the government has a
grip of this crisis do you think it
looks like they do well it's it's it's
very difficult to to to try and pretend
to have a expert view on anything like
this particular if you're not an
invention specialist but what I would
say in their defense so far I look at
all sorts of numbers about this every
day so far the infection rate in the UK
is still very low relative to countries
that we might regard as our peers for
example in France it's I think this is
close if not more than twice as many
recorded infections Germany even more
than that
so so far we seem to be doing okay and I
think as it's been discussed also
earlier where the the center of the
spread here has been it has been
indicated and recognized pretty quickly
I miss this balance between China
scammers all or make sure we're prepared
is is what they have to keep reviewing
every day and so far I think they're
doing the best they can but it's
obviously a very unpredictable and
worrying time for everybody
Lord O'Neill thanks very much for
joining us well we did ask the
Department of Health and public health
England for an interview but no one was
available from either of those bodies I
have though been speaking to Anna subra
the former MP who lost her seat at the
last election and was a minister in the
Department of Health itself I began by
asking her about whether she was
surprised that the Prime Minister hadn't
yet chaired a meeting of Cobra about the
corona virus I wish I could say that I
was surprised but I'm afraid I think
this is absolutely in the character of
Boris Johnson and I think he has a
pitiful understanding of the realities
of how people are looking at this
problem how they need guidance how we
need to make sure that our NHS is
prepared and he needed and she could
have got a grip on this and his
government should have done the same
some considerable time ago the
government says that you know weekly
meetings of Cobra have been happening
they just haven't involved the prime
minister and that public health England
is meeting with the relevant departments
so they're saying a lot is going on
behind the scenes and perhaps to do more
in public would panic people wouldn't it
no it's not about doing things in public
do forgive me it's about making sure
that you handle what is undoubtedly a
very serious situation Cobra is the most
as I know I have been involved with
Cobra when I was a Health Minister and
when I was a business minister what it
does is it brings the people that should
be brought together at the most senior
level it literally either sits them
around the telephone or at the same
table and it gets a grip of the
situation and it sorts out the messaging
and one of the really important things
in this whole circumstances is the lack
of good community
with people so the too many people are
panicked they are worried and they need
to be given good sensible easily
accessible facts and advice and then
that begins to calm everything down at
the same time as you're making sure that
all the other pieces of the jigsaw that
you need to get in place the NHS social
services all those things are being done
should the government have moved to
repatriate the British citizens on board
the Diamond Princess cruise ship earlier
do you think of course he should
and what about Tenerife and what is
happening there in the area where I live
in the East Midlands we have schools who
are providing conflicting information to
parents and when people start to get
that information as they do on the
internet through social media sites then
with all sorts of other information and
misinformation understandably people
don't know what to believe and they are
worried and they are planning and a
super easy speaking to me earlier well
president Raman has predicted that one
day the coronavirus will disappear
claiming it's like a miracle but other
US officials have warned the country
should prepare for significant
disruption to everyday life so let's go
live now to our Washington correspondent
she won candy
Siobhan explain please well Kathy you
only have to look at the screens here
the red screens to understand what's
going on Americans have clearly gone
into panic mode investors are listening
to the news of new fresh viral outbreaks
around the world and they're listening
to companies like Apple Microsoft and
Amazon who are warning that demand is
falling that supply chains are already
beginning to clog up and that will hurt
their profits and if it does that will
affect the health not just of the US
economy Kathy but the whole of the
global economy and that is why we're
seeing the Dow Jones and other big stock
markets here continuing to tumble today
they are on course of course for their
worst weekly performance since 2008 of
course the man who woke up this morning
probably choking on his cornflakes when
he saw the red screens was Donald Trump
we know that he has staked this
sess of his future reelection campaign
on the strength the health of the
American economy so if that begins to
falter so too could his campaign
particularly if there is a sense that he
and his administration simply have not
done enough to combat the threat of the
virus soon as I enough which is what
he's been criticized here for that is
why he has taken to Twitter today to
criticize the Democrats for trying to
politicize he says the virus story and
it's why his chief of staff Mick
Mulvaney speaking at a conference today
just outside DC tried to suggest that
journalists were only covering the story
of this global virus outbreak because of
the damage they thought it could do to
President Trump
let's hear what he had to say the reason
you're skipping so they're using so much
attention to it today is that they think
this is gonna be what brings down the
president that's what this is all about
I got a note today from a from a from a
reporter said what are you gonna do
today to calm the market so I'm like
really what I might do today calm the
markets is tell people to turn their
televisions off for 24 hours well
administration and he there you could
hear clearly trying to play things down
but the disease experts here are still
continuing to say that further outbreak
is inevitable as for a vaccine
scientists here are saying yes that the
work is underway but it will take at
least a year to a year and a half Cathy
before that vaccine will be able to be
used for widespread inoculations and
that is another thing that the markets
here really do not like that there is no
sense of an end to this crisis Sean
thanks very much