GT Voice: World must prepare as UK economic woes spill over
Published: Dec 21, 2020 09:03 PM

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As a new mutation of the coronavirus in Britain reportedly rages out of control, the country is now facing a bigger health crisis than the no-deal Brexit.

The list of countries including Britain's European neighbors that have imposed bans on travel from the UK is growing, amid alarm caused by the new variant of coronavirus that can spread 70 percent faster. 

Infection cases have spiked in Britain, even though it remains unknown if it was linked to the new variant. Public Health England announced 35,928 new cases on Sunday, almost double the figure seen a week ago.

Meanwhile, with the clock ticking on Britain's transition out of the EU by the end of the year, talks remain deadlocked over a Brexit trade deal between the two sides. British businesses have been told to step up preparation for the potential chaos as a result of the UK leaving the EU on December 31, without a trade deal in hand.

If there had been any possibility that the British government would have gone all out to reach a last-minute deal with the EU, the chances are narrowing after the fast-spreading variant was identified and set off alarms across the continent.

The double challenges of a worsening epidemic and a no-deal Brexit have driven the UK to the corner. With more chaotic development to be expected, there is no sign of any light at the end of the tunnel for Britain. 

The UK imposed strict restrictions in London and throughout southeast England, but it remains to be seen whether the stricter lockdown measures could be fully implemented, and to what extent they could effectively prevent the spread of the potentially more contagious variant of the coronavirus.

The prospects for a breakthrough in the talks over a Brexit deal look grim. Officials have come up with various options to avoid the worst-scenario situation. UK Cabinet Office Minister Michael Gove said Britain and the EU can agree on a series of "mini unilateral" deals to ease the chaos in the case of a no-deal Brexit.

Others like the Scottish First Minister Nicola Sturgeon are calling for the Johnson government to seek for an agreement to extend the Brexit transition time. Even if there were an extension, it would still be hard for Britain and the EU to agree on a common set of principles. After all, they've already had years to get it right. 

At the time, the 2016 Brexit referendum sent global financial markets into turmoil. The world needs to be vigilant whether there will be a repeat of the shockwave across the world economy.

The deteriorating coronavirus crisis and a no-deal Brexit are bound to hurt Britain's foreign trade and financial market performance, dealing a heavy blow to the UK economy. Since London remains one of the world's leading financial hubs and its links to the global financial market remain strong under the protection of the UK government, it is essential for all other countries to keep a close eye on the spillover risk of the UK's economic consequences, and the crisis' potential impact on global financial stability.
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