Economy

Coronavirus is already impacting the UK economy, Bank of England's Carney says

Key Points
  • The British economy, which relies to a large extent on tourism revenues and manufacturing, is already seeing the impact, Mark Carney told Sky News.
  • Data out earlier this month showed that the British economy stagnated at the end of 2019. Car production figures were particularly downbeat in that period, seeing a 1.9% contraction.
Mark Carney, the outgoing Governor of the Bank of England.
Matt Dunham | WPA Pool | Getty Images

The United Kingdom is already seeing an economic impact from the coronavirus outbreak, the outgoing Bank of England governor told Sky News.

The outbreak of the new coronavirus, which is believed to have originated in the Chinese city of Wuhan, has spread worldwide and is raising concerns about the global economy. Chinese exports have been affected with many people in quarantine and some plants shutting down. People in other corners of the world are also worried about travelling abroad and airline stocks have been pummelled amid the wider market turmoil.

The British economy, which relies to a large extent on tourism revenues and manufacturing, is already seeing the impact, Mark Carney told Sky News.

"What we are picking up with some of our bigger companies and companies around the world, that is spreading out through the co-called supply chains. So, when they use parts and components to produce goods or, for example, for Jaguar Land Rover in the Midlands, you know, things are getting a little tight," he said.

Data out earlier this month showed that the British economy stagnated at the end of 2019. Car production figures were particularly downbeat in that period, seeing a 1.9% contraction.

Carney, who's due to leave the Bank of England next month, also noted other examples such as a decline in tourism.

"We see it in our streets here in the United Kingdom. That is lower activity as well," he said.

Ongoing fears over the economic impact of the coronavirus have led to a sharp market sell-off worldwide. However, the head of the European Central Bank (ECB) has played down any imminent action as a result of the virus.

"It is a fast-developing phenomenon which requires that we monitor very carefully," Christine Lagarde told the Financial Times Thursday, while adding that it's not yet having a lasting impact on inflation.

Read more on Sky News' website here.

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We are monitoring coronavirus closely, BoE's Carney says