Economic fears as European nations mull fresh coronavirus restrictions

In our weekly Market Monday insights, Prosperity Investment Management examines the latest developments across the globe's biggest financial markets - providing you with all the latest information you need to know.

A stark rise in coronavirus infections across Europe has left nations on the cusp of a fresh set of restrictions - leading to fears over an initial hit to the economy.

As the continent enters the winter period, several European countries have seen an alarming rise in the number of coronavirus infections being reported. Beginning on Monday, Austria has imposed strict stay-at-home orders on unvaccinated citizens in two regions with a view to extending the mandate across the country.

The Netherlands has also imposed a three-week, partial lockdown. Bars, restaurants and essential retail stores must close at 20:00 whilst non-essential retail and services must close at 18:00. Sports events must be held behind closed doors once again, staff are encouraged to work from home and indoor gatherings are limited to four people.

UK economic growth slowed to a 1.3% rate in the three months to the end of September, down from 5.5% in the second quarter and below the 1.5% forecast by the Bank of England. Shortages of goods and components and rising coronavirus cases impacted activity. However, the monthly rate of expansion in September was 0.6% - an improvement from 0.2% in August - due to increased health care activity, although data for previous months were revised lower.

Following their convincing election win, Japan’s Liberal Democratic Party plan to compile an economic stimulus package of about JPY 30 trillion (approximately $265bn USD) which is said to include JPY 100,000 (approx. $880 USD) in cash handouts to children aged 18 or younger and a restart of the Go To Travel subsidy programme to promote domestic tourism. The package will also include wage hikes for care workers, nursery school staff, and nurses. The government is seeking to pass a supplementary budget by the end of the year to fund the package while some measures will also be financed by a budget for the next fiscal year starting in April.