FTSE 100 falls 3% despite Sunak’s rescue package

FTSE 100 falls 3% despite Sunak’s rescue package
Chancellor of the exchequer Rishi Sunak

The FTSE 100 slumped by more than 3 per cent this morning (March 18), despite the government unveiling a package of measures to protect business from the impact of the coronavirus crisis.

The UK's blue chip index tumbled 3.7 per cent since markets opened at 8am as the share prices of companies affected by the spreading pandemic continue to drop.

This is despite chancellor of the exchequer Rishi Sunak announcing spending of £350bn to boost the economy yesterday (March 17), saying he would do "whatever it takes" to support the UK through the crisis.

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He announced an "unprecedented" package of government-backed loans and guarantees for businesses, worth £330bn or 15 per cent of the UK's GDP.

The chancellor also said the government action was "sufficient" for businesses such as pubs, clubs and theatres to make claims on their insurance.

For smaller business in that sector which did not have insurance, he said he would provide cash grants of £25,000 per business.

Other measures included a three-month mortgage holiday for consumers who needed it and an extension of the year-long business rates holiday — announced in the Budget last week — to all businesses in the leisure and hospitality sector.

There was no mention of measures for renters, self-employed or those in the so-called gig economy, but he said in the coming days he would go "much further" to support people's financial security.

Mr Sunak said the government would make an announcement to specifically help protect renters "in the coming days".

The funds announced dwarfed the £30bn of government funds announced at the Budget last week.

The spreading coronavirus crisis has caused global markets to tumble as governments across the world shut down borders, locked down domestic travel and closed sports and leisure facilities.

Since February 24 the FTSE 100 has fallen by 26 per cent while the S&P 500 has dropped by 27 per cent over the same period. The Euro Stoxx 50 is down 30 per cent.

Volatile market conditions have seen indices suffer their biggest daily dives in more than 30 years this month.

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