Sterling and FTSE fall as European borders close to the UK

The FTSE 100 fell 3 percent before recovering slightly, while the main German and French markets were nearly  3 per cent lower.

Sterling fell 0.9 per cent against the Euro and dropped 1.6 per cent against the dollar.

Travel restrictions hit airline stocks, with IAG, the British Airways owner down 8.6 per cent, EasyJet tumbling 9 per cent, Roll Royce falling 7 per cent, Air France-KLM also dropped shares 6 per cent as did planemaker Airbus.

Investors were concerned about another missed deadline in the stalled trade talks with the EU and renewed concern about Covid-19 in the UK. One major sticking point in the Brexit talks is access to the UK’s water for fishing,  as the UK fishing industry accounts for just 0.1 per cent of GDP. If a trade agreement is not reached by the end of the month, British firms will revert to trading with the EU under rules established by the World Trade Organisation (WTO), which will mean imports and exports to the EU would be subject to WTO-negotiated tariffs, essentially a tax on goods. Currency experts have warned the pound could fall to  $1.25 by the middle of next year If no trade agreement is agreed.

Coronavirus has hit over 77m confirmed cases since the outbreak began and 1.7m deaths, globally.