Market rally fades as England, Scotland plunged into fresh lockdowns – business live

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Monday’s market rally, which lifted major European indexes and sent the FTSE 100 up nearly 3% in the first trading session of 2021, has been cut short.

A surge in Covid cases and concerns that health services could be overwhelmed have prompted fresh national lockdown measures in Scotland and England. While England’s measures will become legally binding on Wednesday, the prime minister Boris Johnson has asked people to start following the restrictions from Tuesday night onwards.

It means most businesses will close their doors, including all non-essential retailers, hair and nail salons, gyms and leisure centres. Pubs will also no longer be allowed to offer takeaway alcohol.

UK business lobby groups are now calling for more government support, including further tax relief, VAT deferral, cash grants and an extension of the low-interest bounce back loan programme for small businesses.

Cabinet Office minister Michael Gove said this morning that the government will review the restrictions on 15 February, with hopes of progressively lifting restrictions after that.

In the meantime, futures for major European indexes including the FTSE 100 are pointing to a negative start for equity markets on Tuesday morning:

US equities also tumbled overnight amid concerns over a surge in Covid cases and uncertainty over the outcome of a dual senate race in Georgia that will determine whether Republicans or Democrats control the upper house. The S&P 500 plunged nearly 1.5% while the Dow fell 1.2%. The Nasdaq also dropped 1.5%.

Asian trading has been mixed, with China’s Shanghai Composite up 0.7%, Hong Kong’s Heng Seng up 0.6% and Japan’s Nikkei down 0.3%.

The agenda

• 8.55am GMT: German unemployment (December)
• 9.00am GMT: SMMT new car registrations (December