During the first quarter of this year, the world experienced something that it could never have been prepared for. The novel COVID-19 virus was discovered in Wuhan, China, and it quickly spread throughout the world resulting in an almost global lockdown lasting several months. While the pandemic is still very much active with many countries experiencing a second wave, governments have had to forge ahead with reopening to ensure the survival of their economies.

Source: Pexels

In the UK, the government led by Conservative Boris Johnson was slow to act, according to critics. With the British economy already in uncharted waters following its exit from the European Union in January, the COVID-19 crisis added further turmoil to the situation. Businesses, employees, and stock trading in the UK were all affected.

SMEs in Trouble

Some of those that were worse affected are small to medium enterprises which account for 50% of the total revenue generated in the country. In addition to this, they employ some 44% of the British labour force.

The impact of the pandemic on the performance of SMEs and business owners' confidence in the economy is drastic. Some 80% of SMEs surveyed said their revenue was stable or growing during 2019. Now, the same number say that their income is declining, and they have the added concern of defaulting on loans, having to let employees go, and being unable to sustain their supply chains.

Many have postponed expansion and growth projects that were previously in the pipeline and there is uncertainty about the ability to retain staff going forward. This has also meant that those considering launching on the stock market have been unable to do so, further impacting possibilities for UK stock trading.

Big Names Too

Write for us.

We're always on the lookout for talented writers and welcome submissions. Please send your opinion piece or pitch to: editor@commentcentral.co.uk

It's not just SMEs that have felt the pressure over the last few months. Big names such as Starbucks have announced closures and job losses throughout the county, Boots has announced the loss of 4,000 jobs, and John Lewis will close eight of its stores nationwide.

Of course, this also had a knock-on effect on the UK stock market and stock trading in the UK. March saw some of the biggest daily drops in the entire history of the FTSE making the UK one of the worst-impacted global stock marketplaces. Additionally, the FTSE All-Share Index had a return rate of just -25.1% in the first quarter of the year, performing far worse than the US S&P and the MSCI Europe.

Source: Pexels

Stock trading in the UK was thrown into disarray as the uncertainty around the pandemic, its duration, and possible lockdown measures circulated in the media. With drastic falls in share and stock value, compounded by an unprecedented situation that changed daily, investors didn't know how to react.

But it's not been all bad news. Some analysts are predicting that the markets will recover quickly from COVID-19 and will adapt to the new way of doing things. There are those that believe we will experience a short economic downturn followed by a quick return, and others than think recovery will take a bit longer.

Of course, it could be that there is no short-term recovery and it could take years or even decades to recover, but this seems unlikely in terms of consensus.

3 votes

Sign-up for free to stay up to date with the latest political news, analysis and insight from the Comment Central team.

By entering your email address you are agreeing to Comment Central’s privacy policy