UK Stocks Decline as Brexit and Covid Surge Loom

Stocks took a tumble on Monday amid concerns of a new coronavirus mutation which is causing widespread lockdowns in Great Britain. The surge threatens to crush recent optimism among investors that economic growth is on the horizon with the rollout of COVID-19 vaccines beginning in western nations.

The pan-European STOXX index plummeted by 2.6% on Monday, while Wall Street’s S&P Index plunged 1.7%. Both markets had expected a rebound in the leisure travel industry as well as economic re-openings, which fell drastically following news of the COVID-19 variant, which reportedly has a 70% higher transmission rate. The uncertainty of how the new coronavirus strain will affect economic recovery is causing fear across markets around the world, with many nations placing travel restrictions on England, Wales and Scotland.

The British pound sterling also dropped nearly 2% on Monday following news of Brexit trade talks stalling ahead of a December 31 deadline to finalize a deal. Prime Minister Boris Johnson said the UK is committed to completing the transition out of the European Union; however, differences remain regarding fishery terms.