Ian McConnell: Parallels in these warnings to speculators and food-hoarders as coronavirus crisis grows

The email followed a week of distressing news on the coronavirus pandemic from around the globe, notably Italy. It came hard on the heels of major measures from Chancellor Rishi Sunak in his Budget, amid precipitous falls on global stock markets triggered by fears and huge uncertainty over the outbreak.

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Mr Coupe wrote: “Please think before you buy and only buy what you and your family need. If we all do this then we can make sure we have enough for everyone. And please help elderly and vulnerable friends, family and neighbours with their shopping if you can.”

This message seemed to strike exactly the right tone at this frightening time.

This is a pandemic with an awful human cost, as the experience of China and South Korea, the current situation in Italy, and outbreaks and developing crises in other countries around the globe show.

The fact that Mr Sunak had to come back on Tuesday with far-greater measures than outlined in last week’s Budget, with the UK Government having now unveiled a £350 billion financial aid package, highlights the scale of the economic challenge ahead.

The extent of the challenge facing households, businesses and the economy was also underlined yesterday when the Bank of England cut UK base rates even further. Having reduced them by a half-point to match their previous record low of 0.25% only last week, it cut them to 0.1% yesterday. Base rates did not fall this low even in the wake of the global financial crisis.

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From a public health perspective, the focus is on saving lives. And this is absolutely the priority.

Amid the awful human cost, governments around the world are also having to try to minimise the impact of the outbreak on people’s livelihoods. This action is crucial from a medium and long-term perspective, as well as being essential during the crisis.

This is a time for people to have maximum consideration for each other, as well as effective government action.

Crucially, such behaviour will limit the death toll. It can also mitigate the ultimate damage to people’s livelihoods.

Sainsbury and other supermarket chains have in recent days had to take major steps to try to ensure a stable situation by imploring people to behave responsibly.

They have also had to introduce a degree of rationing as toilet roll and dried pasta, to name just a couple of product lines, have flown off the shelves.

Much of this will be people buying what they need but there are some signs that panic-buying and hoarding are making things worse.

It was impossible not to see a parallel between the entreaties of Mr Coupe and a message this week from newly installed Bank of England Governor Andrew Bailey.

Mr Bailey’s appeal also appeared to be centred around behaving responsibly for the greater good, and was aimed at short-term speculators in financial markets.

Taking a view on such speculative behaviour would hardly, for very good reason, be at the forefront of many people’s minds as they worry about friends and relatives amid the unfolding horror of the coronavirus pandemic. Nor should it be.

Nevertheless, Mr Bailey is absolutely right to highlight the damage being done by such behaviour in financial markets at a time like this.

Mr Bailey directed his comments at short-sellers, who aim to make gains by speculating on the decline in the price of a share or other security. In essence, such traders sell shares or other securities they do not yet own at the market price in the hope of buying them at a later time after the price has fallen to satisfy the bargain. Such activity, which can involve borrowing securities to sell, generally exacerbates falls in share prices.

He urged people engaging in this activity to “just stop”.

Mr Bailey said: “Anybody who says, ‘I can make a load of money by shorting’ which might not be frankly in the interest of the economy, the interest of the people, just stop doing what you’re doing.”

Financial markets as a whole are based on cold assessments of the value of things. There is no emotion in this.

However, financial-market activity, even in these high-tech days, is conducted or at least led by individuals.

From the viewpoint of many millions of people’s livelihoods, both in the immediate storm of the coronavirus crisis but more importantly when the dust settles, short-term market speculation by short-sellers to make a quick buck looks to be damaging.

Governments and central banks around the globe are throwing a lot of money at trying to steady the ship, and the last thing they or any of us need is for people in financial markets to be deliberately rocking it for a quick gain.

Financial markets are, of course, all about making money.

This is not an argument against financial markets functioning in the way in which they do in usual circumstances (although the issue of short-term speculation is often a valid subject for debate).

It is just that you would hope financial-market players would recognise these are not normal times.

Millions of people’s lives have been blighted for many years by the economic damage which followed the global financial crisis. In the UK, the post-crisis measures included a severe and counter-productive austerity programme, through which millions of people who had nothing to do with the global financial crisis ended up paying the price for it.

On a separate note in terms of people’s livelihoods, it was also good to hear Mr Bailey declare that companies thinking of job losses during the coronavirus crisis should consider the support available to them first.

The new Bank Governor urged firms to “stop, look at what’s available, come and talk to us [or] the government before you take that position”.

While the focus must absolutely be on minimising the immediate human cost of the Covid-19 outbreak, it is important that people work together to mitigate the economic damage. This applies to employers in businesses of all sizes, financial market-players and communities at large. There is no visibility on the depth or duration of the economic damage at this stage. But what is for sure is that the situation will not be helped by disruption from financial-market speculators with their eye on quick, easy money and a lack of regard for the greater good.

We are, sadly, only at the start of what is going to be a very grim period indeed.

There are plenty of signs of cooperation and concern for others amid this developing tragedy.

In the context of financial-market turbulence and empty supermarket shelves, it is right that Mr Coupe and Mr Bailey should endeavour to appeal to people’s better nature.

We must hope that people take on board their messages, for the greater good.