As the shares of airlines, hotel groups and pub chains plummeted, many commercial bodies have called on the government to clarify its plans and ensure that companies are not cut financially.
Hannah Essex, co-executive director of the British Chambers of Commerce (BCC), said: “Uncertainty and speculation around future national restrictions will undermine business and consumer confidence at a difficult time for the economy.
“While protecting public health must be the priority, the government must do everything in its power to avoid further national lockdowns that will cripple businesses.
She said any obligation for companies to shut down or reduce their capacity through no fault of their own should be accompanied by a “full support package.”
Expectations of new restrictions came after Health Secretary Matt Hancock refused to rule out a two-week nationwide lockdown as a ‘last line of defense’, hitting the shares of some of the UK’s biggest companies .
British Airways owner IAG was the biggest loser on the FTSE 100, down almost 15%, while easyJet fell 9% and aircraft engine maker Rolls-Royce lost 5%.
Advertising companies such as JD Wetherspoons and Mitchells & Butlers, as well as hotel groups Intercontinental and Whitbread have also lost ground as shopkeepers fear the threat of closures.
Shares of NatWest, formerly known as RBS, fell below £ 1 for the first time since the pandemic took hold, while Lloyds Banking Group fell 3%. Both are considered indicators of the health of the UK economy.
The hospitality sector has been particularly affected by coronavirus prevention measures.
A quarter of the licensed premises have yet to reopen after the first lockdown, and businesses have released grim predictions about the effect of any new curbs.
UK hospitality manager Kate Nicholls said the industry was “on the cutting edge”. Unverified rumors of lockdowns and curfews were hitting consumer confidence, she added.
“If lockdowns or restrictions are necessary, they must be carefully worded and backed by government support, to minimize damage to businesses,” she said. “Even relatively minor changes, like a business having to close at 10pm rather than 11pm, have a huge impact.”
Her counterpart from the British Beer and Pubs Association, Emma McClarkin, said: “To stop completely, even for a short time, would be a monumental task, would have a huge impact on livelihoods and would have an astronomical cost to the business. ”
The BBPA is calling for an extension of the holiday regime for hotel companies, as well as an extension of the VAT reduction, a holiday in business rates and a reduction in beer duties.
Michael Kill, chief executive of the Night Time Industries Association (NTIA), urged ministers to be cautious in targeting hotel businesses, including struggling pubs, clubs and bars, with Covid-19 borders.
“Curfews are devastating for our industry,” he said. “We are concerned that the narrative around hospitality is partially responsible for what is happening. There have been returning schools and universities, illegal parties, households, all of which have contributed in different ways.
“If we finish at 10 p.m., eventually we’ll find people looking for that extra time, whether it’s an illegal event or the continuation of the party in a home.”