More European countries return to work, EU relaxes on lockdown restrictions
European counties like Australia and Italy reopened thousands of shops, sending more people back to work and realizing on COVID restrictions. Yahoo Finance’s Tom Belger breaks down the latest developments.
Video Transcript
JULIE HYMAN: And this as we are also talking about reopenings around the globe. We also just got the headline that Italy has just reported a day over day increase in coronavirus cases of nearly 2,972. The good news is that is the smallest increase in a month's time.
Our Tom Belger is joining us from the UK now to talk us through what is happening in Europe in terms of reopening-- rolling reopening, so to speak. Tom.
TOM BELGER: Hi, there. Yeah, it feels like a new phase in the pandemic in Europe, at least several countries now starting to lift the lid on their lockdowns. That's broadly pushed up stocks today.
If we start with Spain, they have one of Europe's strictest lockdowns. But they've now let construction workers and manufacturing workers go back to work. Austria, they're letting large shops reopen from today. And even Italy, as you mentioned, they're not letting bookshops and children's clothes shops, interestingly, reopen their doors from today.
There's also some other factors there playing on the markets. Boyd, it seems by Chinese export data, was less bad than feared. So the Europe wide stocks 50 and STOXX 600, they're both more than half a percent higher today.
The big question, though, as it seems to be in the US, is, is this too soon, or when should the exit strategy be? 90%, the WHO said, of cases in the world right now are in the US and Europe. That's quite a statistic. And the EU is warning states they have to coordinate because otherwise, you might risk a situation where, as seemingly with China now, that most of the new cases even seem to be coming not from domestic cases, but from abroad.
It's just worth saying lastly not everywhere has seen stocks gain. In London, the FTSE's down, I think it's by 0.9% just a few moments ago. That seems to be because there's no end in sight to the lockdown. We've seen the ministers in government in recent days, indications that they're not planning to end the lockdown for several weeks at least or even start talking about it for some weeks.
We've also had some pretty bleak economic data out today. We found out yesterday Britain's finance minister Rishi Sunak was apparently warning the cabinet that British GDP could take a 30% hit in the second quarter.
And today, an official watchdog has borne that out. It's published its own forecast, which maybe was the one he was referring to. That says if the lockdown lasts more than three months, we could see a 35% hit to UK GDP in the second quarter. Unemployment, it says, could more than double to 10%.
And by my calculations, that would be a 27-year high. Really devastating numbers that are no surprise then, really, that some government ministers really do fear the long-term damage of the lockdown itself, let alone the illness. And quite a few of them are said to be pushing now within the cabinet for an easing as soon as possible. Back to you.
JULIE HYMAN: So a similar situation to what's going on in the United States, it seems. Tom--
