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The FTSE 100 fell 2 percent within minutes after opening on Monday morning as UK stock markets woke to news of a deepening crisis in key ports supplying fresh food and other vital imports. .
In London, 33 billion pounds sterling was erased from the index of the shares of 100 leading companies, while the pound fell almost 2 percent against the dollar after France closed the border to all accompanied freight.
The Paris announcement came in response to warnings of a new variant of Covid-19, believed to be more transmissible, that is spreading rapidly in south-east England. France’s move caused the Eurotunnel and Dover ferry ports to close for 48 hours starting Sunday night.
Stock prices are suffering in part due to fears that tougher lockdown measures will be needed for months if the new variant of the coronavirus is confirmed to spread more easily than previous strains.
British Airways owner International Consolidated Airlines Group failed the most, down 16%, while Lloyds Banking Group fell 6%.
The FTSE 250 was down 1.8 percent to 19,753 in early trading. Against the dollar, the pound was down 1.8 percent to $ 1.327 and against the euro, the pound was down 1.5 percent to 1.086 euros.
While the border remains open in one direction, allowing goods to enter the UK from France, figures from the food and logistics industry warned that the flow of trucks could stop because drivers are unable to return from the other side and they will fear being stranded in the UK for Christmas and beyond.
Queues of thousands of French-bound trucks had already formed last week on the motorways leading to the Eurotunnel in Kent as businesses piled up before Brexit during the Christmas rush.
Tailbacks are expected to lengthen Monday as the stagnation intensifies. On Sunday night Kent Police began implementing Operation Stack, a plan that calls for trucks to park along the M20 at a time when trade across the Canal is disrupted.
Ian Wright, executive director of the Food and Drink Federation, said France’s travel ban could cause “serious disruption to the UK’s supply of fresh Christmas food and UK food and drink exports.”
“Continental truckers will not want to travel here if they have a real fear of being stranded. The government must urgently persuade the French government to exempt the cargo accompanied by its ban.”
Grant Shapps, the transportation secretary, tried to quell fears about the disruption, noting that while about 6,000 trucks would not cross the Canal on Monday, 32,000 containers would continue to make the trip.
“Very often there are interruptions on this short route and they just don’t realize it,” the minister said.
“In the very short term, for a day or two, this doesn’t have a particularly big impact.”
Trade bodies in the logistics industry urged buyers not to panic and tried to assure them that the racks would remain stocked. Shane Brennan, CEO of the Cold Chain Federation, which represents food storage and transportation companies, called on the government to quickly resolve the crisis and ensure the well-being of hundreds of drivers on the roads who may be stranded.
“This will cause them, their families and their employers great anxiety as they will have no idea when or how they will get home. We urge the authorities on all sides to consider their welfare above all else in the next few hours, ”he said.
Boris Johnson will chair a meeting of the government’s emergency Cobra civil contingencies committee on Monday to address the “constant flow of cargo in and out of the UK,” a spokesman for Number 10 said.
