That’s all for today. A quick recap of the key points.

Global markets have suffered heavy losses on fears that a resurgence of Covid-19 cases will undermine the economic recovery.

Wall Street has suffered chunky falls, with the S&P 500 index falling 1.6% - its biggest drop in two months.

The Dow, which has a higher concentration of stocks that benefit from the reopening of economies, slid by 726 points, or 2.1% - its biggest percentage decline since last October.

Energy stocks, travel companies, industrial companies and banks were all hit by the selloff, and concerns that the Delta variant will lead to new shutdowns.

Crude oil prices have slumped by 7%, on the prospect of weaker demand - and higher output, after Opec+ agreed a production deal.

European markets suffered their biggest fall of 2021, with the pan-European Stoxx Europe 600 shedding 2.3%.

In London, the FTSE 100 also fell 2.3%, wiping £44bn off the blue-chip index as it fell to its lowest closing point in over three months.

In another sign of unease, the yield (or interest rate) on US 10-year Treasury notes fell to its lowest levels since February, as investors sought out safe havens assets.

The US dollar also benefited from this flight to safely, which knocked the pound down to around $1.367 tonight - for the first time since April.

Our main Covid-19 liveblog is here:

Goodnight. GW

The Dow Jones industrial Average has posted its worst day in nearly nine months,

Today’s 2.1% slide is the Dow’s biggest one-day drop since October 2020, as investors fear that rising Covid-19 infections will shunt the economic recovery off course.

Each of the 30 stocks on the heavyweight index fell, as pandemic anxiety sent investors ditching stocks and piling into safe-haven US government bonds.

Reuters says:

“Much of it is related to the Delta (variant),” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “There’s some concern too that maybe the economy is not going to open up as quickly as everyone thinks, and the big boom that everyone’s expecting is going to be more of a pop than a boom.”

“We’re woefully off of breakneck economic growth, and judging by the activity we’re seeing we’re overestimating a lot of the economic reports,” Nolte added.

The highly contagious COVID-19 Delta variant, now the dominant strain across the globe, has caused a surge in new infections and deaths, nearly exclusively among unvaccinated people.

“Global availability of the vaccine has been an issue from day one.” Nolte said. “That’s been out there for a long time. This is the latest iteration of that. We still have a long way to go.”

Ding ding. The NYSE closing bell has rung, with US stocks sharply lower as worries over the pandemic, global growth, and US-China relations all hit the market.

The S&P 500 index, which covers a broad swathe of US stocks, has tumbled by over 68 points, or 1.6%, to 4,258 points -- its biggest one-day fall in over two months (since May 12th).

The storied (although less representative) Dow Jones industrial average suffered a 726-point slump, down 2.1% to 33,962 points.

Boeing led the Dow Jones fallers, sliding 5%, followed by American Express (-4.2%), conglomerate Honeywell (-4.2%) and chemicals firm Dow Inc (-3.7%)/

And the tech-focused Nasdaq had a bruising day too, down 1.05% or 152 points at 14,275 points.

Stocks are being hammered harder on Wall Street too, where pandemic fears are also rife.

The Dow Jones industrial average is now down 880 points, or 2.5%, at 33,807 points - extending its earlier losses. Energy stock, financials and industrials are all being hit by growth worries.

CNBC says:

U.S. stocks fell aggressively Monday on concern a rebound in Covid cases would slow global economic growth. The selling picked up though early afternoon and the Dow Jones Industrial average was headed for its biggest drop of the year.

The Dow dropped 920 points, or 2.7%, exceeding a 2% decline in late January. The S&P 500 fell 2.1% with energy and industrial sectors as the worst performers. The tech-dominated Nasdaq Composite lost 1.5%. The small-cap Russell 2000 briefly dropped into correction territory, falling 10.7% from its 52-week high on March 15.

The 10-year Treasury yield fell to a new five-month low of 1.19%, exacerbating fears about the slowing economy. Crude oil dropped more than 6%.

“You have two concerns coming together... concerns about market technicals and concerns about growth,” Mohamed El-Erian, chief economic adviser of Allianz and former co-CEO of Pimco, told CNBC’s “Squawk Box” before Monday’s opening bell. “That’s what all the asset classes are telling you.”

European stock markets also suffered sharp losses, as anxiety over the Delta variant gripped investors.

The pan-European Stoxx 600 tumbled by 2.3% to its lowest close in two months, with Germany’s DAX and France’s CAC both down over 2.5%.

Italy’s FTSE MIB was the worst performer, sliding by 3.34%.

‘Freedom Day’ has fallen flat, points out Michael Hewson of CMC Markets:

Today was supposed to be a landmark day where the UK economy finally shook off the handbrake of Covid-19 restrictions. Instead of a story of vaccine success it has turned out to be, not only a political shambles, but a big market sell-off over concern about the effect rising hospitalisations, along with big increases in the numbers of people self-isolating will have on the recovery story.

Over the weekend the UK government did its best impression of shooting itself in the foot over its isolation policies, while Delta variant cases have been rising sharply, sparking concern that hospitalisations could rise to a level that might overwhelm the NHS.

Rising virus concerns have rippled out across global markets, he adds:

The main concern appears to be that rising infection rates, along with an increase in self-isolation levels, as a result of being pinged by NHS Track and Trace, could stymie the recovery that has been in place since March.

A lot of hospitality venues are already having to close due to a shortage of staff who are isolating as a consequence of being pinged by the app.

Today’s selloff has wiped around £44bn off the value of the FTSE 100 index today, as investors ditched shares on fears over the Covid-19 pandemic.

Another £9.6bn was knocked off the value of the smaller FTSE 250 index, as Freedom Day proved to be a painful one for investors.

Britain’s blue-chip FTSE 100 index has posted its biggest one-day fall in two months, as fears over the Covid-19 pandemic hit markets.

The FTSE 100 has marked so-called ‘Freedom Day’ by tumbling by nearly 164 points, or 2.34%, to finish at 6844.4 points.

That’s its worst one-day drop since 11th May, and its lowest closing point since early April.

Travel stocks, hospitality firms, miners and banks were all hit by renewed worries about the pandemic.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, says” strong undercurrents of Covid uncertainty” washed through the financial markets:

Far from giving investors a jolt of confidence, Freedom Day has seen it evaporate, as sharply rising infection rates disrupt businesses across the UK. From retail to manufacturing and hospitality, the warnings are coming thick and fast that mandatory isolation is leading to reduced business operating hours, a drag on sales and a reduction of output. Amidst concerns that soaring infection rates could derail the recovery are worries about inflation heating up, and the knock on effect of rising interest rates combined with the roll back of mass bond buying programmes.

ITV finished as the biggest faller, down 6.6%, on concerns that an economic slowdown would hurt advertising budgets.

British Airways parent company, IAG, shed 5.2% while jet engine maker/servicer Rolls-Royce slumped 6.5% on fears that the summer holiday season will be a washout.

Streeter says:

The confusion surrounding quarantine and testing rules for international travel is also leading to fresh jitters about recovery for the aviation and tourism industries.

Optimism which had been on the horizon just a few weeks ago has again been obscured by dark clouds, especially with the snap decision to enforce a 10 day quarantine for arrivals from France. With the rules for teenagers also unclear, many families, once hopeful for a holiday, are now putting away their suitcases, settling for a summer of staycations and day trips.

Oil giant BP ended down 4.7%, with crude prices sliding today, while UK-focused Lloyds Banking Group dropped by 4.85%.

Retailers also had a bad day, with Primark owner Associated British Foods down 4%, Next down 3.4% and JD Sports off 1.9%

Streeter warns that there’s nervousness about the risk of restrictions being reimposed:

With some scientists warning that infections could reach 200,000 a day by September, there is now a feeling that the UK could be staring at a fresh Autumn lockdown.

Primark has only just bounced back from the Covid shock and fresh closures would seriously derail its recovery.’’

Investors are continuing to pile into the safety of US government bonds, driving the yield on benchmark US Treasuries down below 1.2% for the first time since February.

That indicates they are more worried about a global slowdown, as the Delta variant of Covid-19 spreads.

Crude oil has plunged by over 5%, extending its earlier losses.

This has pulled Brent crude down to $69.59 per barrel, the lowest since early June.

Fears over the pandemic, growth worries, and the Opec+ agreement to increase output are all hitting the oil price.

Fawad Razaqzada, analyst at Think Markets, explains:

Crude oil has unsurprisingly sold off on the back of the weekend news from the OPEC+ group.

Although their new agreement means short-term uncertainty has been lifted, the fact that baseline production levels were raised means more oil supply will be coming back than expected, and at a time when rising Delta variant of covid is raising question markets about the sustainability of demand.

Hospitality firms such as pubs and restaurants were already struggling to find enough staff before they were hit by “pingdemic” absences caused by employees being told to isolate by NHS test and trace, according to official figures.

Revenues were still below 70% pre-pandemic levels at the end of May, according to data from the Office for National Statistics released on Monday, with pubs and nightclubs faring even worse.

The sector is recovering from the lows it experienced in lockdown but the figures suggest the rebound could be slowed by the difficulty that businesses still face in finding staff to fill a rising number of open positions.

There were an estimated 102,000 job vacancies in hospitality between April and June, nearly five and a half times higher than the 19,000 recorded in December to February, and more than 20% higher than pre-pandemic levels.

The ONS has tweeted the key points too:

Risk appetite has vanished today, says Edward Moya of OANDA, as fears over the pandemic erupt again.

Risk aversion is firmly in place as the Delta Covid variant spread is triggering a flight to safety as global economic concerns intensify. Global investors are growing anxious and selling stocks, commodities, and even cryptocurrencies to buy US Treasuries.

With coronavirus surging across both advanced and developing nations, the bond market is delivering a one-way trade, lower global bond yields. Equities were ripe for a pullback given Wall Street was in agreement that this is ‘as good as it gets’ for peak earnings, economic growth, monetary stimulus, and shortly fiscal support. It is hard to hold risky assets over the short-term now that we have past peak everything.

The news that the US and allies are blaming individuals tied to the Chinese government for the Microsoft Exchange hack are also weighing on markets, he adds:

The laundry list of issues between the world’s two largest economies continues to grow and likely suggests we won’t see calm waters anytime soon. US-China tensions saw telecom and cybersecurity issues jumped ahead of both trade tariffs and living up to the phase-one trade deal. Human rights issues, China’s tech crackdown, and handling of Hong Kong are also contributing to US-China tensions.

Panic selling of risky assets could happen if a back-and-forth of harsh tones becomes a recurring theme between the US and China.

The global selloff that began in Asia-Pacific markets and rippled through London and other European markets has now reached New York.

Wall Street has opened in the red, as worries about global growth and a resurgence of Covid-19 cases pull US indices away from their recent record highs.

Travel, leisure and energy stocks are among the big fallers, following rising concerns about the pandemic and the drop in crude oil prices.

In early trading:

• Dow Jones industrial Average: down 504 points or 1.45% at 34,183 points
• S&P 500: down 57 points or 1.3% at 4,269 points
  
• Nasdaq Composite: down 181 points or 1.25% at 14,246

It’s difficult to have a conversation with anyone in the U.K. without a debate as to whether the U.K. is correct to lift all legal covid restrictions today with cases surging through the population, says Jim Reid of Deutsche Bank:

He told clients that the world will watch the UK’s move with great interest:

Those for suggest that with all the vulnerable groups fully vaccinated and every adult having been offered at least one jab then we have to start learning to live with the virus and the summer is the best place to start. To delay would only postpone cases and risks the peak occurring in winter when the health service is usually more stretched. Mental health considerations also come into the equation as does the still relatively low death rate.

Those against will suggest that fully reopening now after the recent surge in cases could soon lead to high hospitalisations and genuinely risk pressurising the health service. They would also argue that new variants could emerge with such a wide prevalence of cases and could also create huge numbers of long covid cases and more deaths than should occur.

Anyway, the world will be watching the U.K. experiment with huge interest. It could show a pathway back towards normality or it could be a warning to even heavily vaccinated countries that Covid will be a problem for a decent length of time still.

Ricardo Evangelista, senior analyst at ActivTrades, says the markets are anxious, as the pound slides to three-month lows.

The pound is coming under pressure, heading for lows not seen since April, despite the arrival of the so-called ‘Freedom Day’ which marks the ending of almost all COVID-related restrictions.

Investors are showing nervousness at a time when the country is averaging close to 50,000 new cases a day, fearing that the relaxation of all rules now may eventually lead to negative social and economic outcomes.

Bill Blain, markets strategist at Shard Capital, is concerned that the UK health secretary has now caught Covid-19:

It is worrying Sajid Javid, the nominated Adult in the Room overseeing Boris’ cabinet while providing much needed common sense, has apparently come down with Covid – despite being double vaxxed.

Blain adds that the markets remain “as contradictory as ever”:

On one hand there is the reflation trade, expectations of a gold-plated earning season, and the apparent resolution of OPEC disagreements to stabilise oil prices is stock positive.

On the other, data watching analysts are saying the economic recovery has already stalled, the likelihood is for lower-for-longer rates, thus bonds have rallied.

Hmm… rising inflation and slowing economy..? 1976 all over again and the word is stagflation. Time to put the Sex Pistols on the record machine..?

After a painful morning for traders, London’s blue-chip stock index is sinking to a new two-month low.

The FTSE 100 is currently down 160 points or 2.3% at 6848 points, its lowest since 13th May.

Broadcaster ITV is now the top faller, down 5.2%. It suffered a slump in advertising in the first lockdown, and had been expecting a strong recovery in ad spending as the pandemic receded.

It’s followed by airline IAG (-5%), Rolls-Royce (-4.7%) and Ocado (-4.6%) following its order disruption, with mining companies, energy firms, banks and retailers also lower.

The UK stock market is certainly not in a celebrating mood as England lifts its Covid-19 restrictions, says Russ Mould, investment director at AJ Bell.

“Many of the stocks leading the UK stock market downwards are related to travel and leisure, suggesting that investors are extremely worried that we’ve lifted restrictions too soon and that another lockdown could be a month or two round the corner.

“Covid is spreading fast again and the airlines, restaurants and leisure companies may not get the strong summer trading they’ve long hoped for.

Scientists have warned that the rise in Covid-19 cases could force the country into a lockdown later this year, as rising numbers of infections look likely to continue until autumn.

The fact Cineworld (-4.9%), Carnival (-7.5%) and Restaurant Group (-6.7%) are sharply down on the FTSE 250 index “implies that investors think the reopening trade is now a dud”, Mould explains.

“Lots of people have been vaccinated and assumed they had become invincible. Reality is now striking as many of these individuals get a wake-up call by catching Covid or being pinged and told to isolate.

“Pictures from UK airports would suggest some increase in flying but certainly nowhere near the levels one might have expected a few months ago. Then, everyone was talking about their big plans to celebrate once Freedom Day came around, and now it’s proved to be a damp squib.

“The big concern for the market is whether we going to see a slowdown in the global economic recovery, and this could be the overriding force which results in a bad period for equities in the weeks ahead.

Budget airlines easyJet (-6.3%) and Wizz Air (-5%) are also in the FTSE 250 fallers, along with WH Smiths (which operates shops at airports and railways stations) and Sports Direct owner Frasers (-5.3%).

Months of “frenzied buyer activity” have driven the average asking price for a home in Britain to a new high, according to property website Rightmove this morning.

The property portal said it expected figures from HMRC due later this week to show that June was the busiest month on record for sales, with buyers rushing to complete before stamp duty rules change in parts of the United Kingdom.

Rightmove, which lists properties of 90% of estate agents, said the first six months of the year had been the busiest it had recorded since 2000, pushing up the average price of homes coming on to the market in England, Wales and Scotland to £338,447 – an increase of £21,389, or 6.7%, since the beginning of 2021....

BoE deputy governor Sir Dave Ramsden recently told us that the Bank was carefully monitoring Britain’s booming housing market, for signs that inflationary pressures were picking up....

Bank of England policymaker Jonathan Haskel has warned it would be risky to rein in the Bank’s stimulus package soon.

On an online webinar at the University of Liverpool Management School, Haskel says interest rates should not be raised at this point, as there is so much uncertainty over the future.

Haskel, a member of the Monetary Policy Committee that sets interest rates and the QE bond-buying stimulus programme, says:

For the foreseeable future, in my view, tight policy isn’t the right policy.

Haskel also explains that the economy will be less damaged in the long term than the Bank feared. This is because fewer jobs have been lost, and companies have invested more in their businesses than forecast at the start of the crisis.

And he also suggests that much of the inflationary pressures will be temporary, so it would be risky to tighten policy too soon.

Haskel says:

The immense support for the economy over the pandemic looks like it might have averted deep scarring. The anticipation of an improved future might well feed into demand today and so add to inflationary pressure. But much of inflation will be high temporarily due to the low base from which prices are rising. In addition the economy is fully not recovered yet and faces two headwinds over the coming months: the highly transmissible Delta variant and a tightening of the fiscal stance.

Against this backdrop, risk-management considerations lean against a pre-emptive tightening of monetary policy until we can be more sure the economy is recovering in a manner consistent with the sustained achievement of the inflation target. For now, tight policy is not the right policy.

Last week, MPC member Michael Saunders and deputy governor Sir Dave Ramsden both suggested that the Bank could rein in its stimulus measures sooner than previously expected due to growing inflation pressure.

Here are the five main points from Haskel’s speech:

1. During the pandemic, investment, like in all recessions, has fallen. But that fall was concentrated in buildings and structures. Investment in intangibles, such as R&D and software, has stayed comparatively strong. This significantly reduces the risk of future scarring.
   
   
2. The prospect of a shift in the way we work through increased working from home and, perhaps more importantly, the acceleration of digitalisation offers further scope for supply-side optimism.
   
   
3. The labour market outlook has improved considerably in 2021 and the measures of labour market mismatch are falling.
   
   
4. The anticipation of improved supply brings demand forward now and might add to inflationary pressure.
   
   
5. In the immediate term, the risk of a pre-emptive monetary tightening curtailing the recovery continues to outweigh the risk of a temporary period of above-target inflation. For the foreseeable future, in my view, tight policy isn’t the right policy.

Shares in Ocado have hit their lowest level in over a year, after a fire at a fulfilment centre in south-east London on Friday.

Ocado are down 3.3% this morning at £17.45, their weakest since early May 2020, as the disruption forces the company to cancel orders.

The BBC explains:

Ocado has cancelled thousands of orders after a fire at a fulfilment centre in south-east London on Friday.

The online grocer said the blaze started when three of the robots that help pick its groceries collided at the Erith site.

About 800 staff had to be evacuated and firefighters worked through the night to contain the incident.

It is the second fire involving robots at Ocado. Its Andover facility burned down in 2019 after an electrical fault.

Ocado’s shares had surged during the pandemic last year, due to high demand for home deliveries and the boom in technology stocks.

But they’ve been under pressure this year as lockdown restrictions were eased, and are down 23% since the start of 2021

The selloff is gathering pace in London.

After two hour’s jittery trading, the FTSE is down 130 points or almost 1.9% at 6877 points - still a two-month low.

Rolls-Royce are now the top faller, down 4.1%. Its aerospace business, which services planes as well as selling new engines, will suffer if travel demand remains subdued.

Mining giants are also in the top fallers, hit by concerns that slowing growth means less demand for commodities such as iron ore, copper, coal and nickel.

Glencore and Anglo American are both down around 3.6% this morning, with oil giant BP down 3.2% following the Opec+ deal to boost supplies.

Richard Hunter, head of markets at interactive investor, explains:

“Investors have moved risk averse for the moment, as a number of persistent concerns weigh on sentiment.

In the US for example, the stubborn presence of the Delta variant has led to some switching from growth stocks, such as big tech into defensives, such as healthcare and utilities, as various levels of lockdown continue in many parts of Asia, threatening to defer the global economic recovery.

Meanwhile, consumer confidence fell in July on inflation concerns, while this week will provide the first part of an acid test on the domestic corporate story. With expectations extremely high and with some predicting the strongest growth rate since the tail end of the great financial crisis in 2009, there is perhaps more scope for disappointment rather than positive surprise.

These economic concerns are hitting the UK market too:

The likes of the oil and mining sectors are under pressure within the premier index on fears of slowing growth. At the same time, stocks caught in the reopening trade such as the travel sector continue to be volatile even after the easing of some international restrictions, as time begins to run down on a potential 2021 return to widespread tourism.

Oil has hit its lowest level in a month, after the Opec group and its allies reached an agreement to boost output.

The deal means oil production will continue to rise over the next few months, with output at the end of 2021 roughly two million barrels per day higher than today.

This will continue to unwind some of the production curbs introduced early in the pandemic, ending a dispute that had worried the markets (as oil supplies would remain too tight, or Opec’s agreement might blow up).

Negotiations had floundered earlier this month, after the UAE pushed to be allowed to pump more within the rules. Now, higher output quotas have also been agreed for several members - the UAE, Saudi Arabia, Russia, Kuwait and Iraq.

The prospect of higher output, and worries about global growth, have pushed Brent crude down by over 2.5% to $71.59 per barrel, the lowest since mid-June.

Copper, a handy gauge of the economic outlook, has dropped this morning as surging Covid-19 cases threaten the economic recovery.

The jump in the US dollar, as nervous investors seek a safe haven, is also pushing down commodity prices.

Reuters has the details:

Three-month copper on the London Metal Exchange (LME) fell 0.6% to $9,367 a tonne by 0719 GMT, while the most-traded August copper contract on the Shanghai Futures Exchange ended 0.7% down at 68,740 yuan ($10,610.02) a tonne.

“Those who would seek to push metals higher stood aside today as Asian equities are all down,” Malcolm Freeman, a director at UK brokerage Kingdom Futures, said in a note.

“The world of equities is still being unnerved by the Covid Delta spread and the fears that recovery will not be as quick and simple as might have been hoped for at first.”

More here: Copper falls as virus worries unnerve investors

There’s no reopening bounce in the City either - with shares falling sharply at the start of trading.

The FTSE 100 index of blue-chip shares has tumbled by 90 points, or over 1.25%, to 6917 points - its lowest level since mid-May.

Almost every stock on the index is lower in early trading.

Hospitality and travel stocks are among the big fallers, hit by concerns over the pandemic.

IAG, which owns British Airways, is down 4.6%, along with jet engine manufacturer and servicer Rolls-Royce (-4.3%), Intercontinental Hotels (-3.3%), commercial property developer British Land (-3.1%) and catering firm Compass (-3%).

Concerns over rapidly rising global Delta variant cases, as well as a slowing economic outlook, are hitting markets, says Michael Hewson of CMC Markets:

There was a great deal of optimism over the summer reopening, however as we look ahead to the rest of the year and look at how Delta variant infections are rising, some of that optimism is dissipating.

The pound has fallen to a three-month low against the US dollar.

Sterling has dropped by half a cent to $1.372, its lowest since April, as concerns over the pandemic hit the currency - on the morning that restrictions are lifted in England.

The pound has also dipped 0.2% against the euro to a one-week low of €1.1636.

Jeffrey Halley of OANDA says concerns over the wisdom of reopening while Covid-19 cases are surging could weigh on the pound:

The reopening is occurring as delta-variant cases explode in the UK, and I expect nerves over whether this is the dumbest post-pandemic policy decision ever to cap gains in Sterling this week.

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

Rising concerns about the Covid-19 pandemic are weighing on the markets, on the day England lifts its remaining coronavirus restriction despite warnings that the move could allow new variants to emerge.

Stocks have dropped in Asia-Pacific markets, with Japan’s Nikkei dropping 1.25% and Hong Kong’s Hang Seng down 1.6% in late trading. The increase in Delta-variant cases is threatening to stymie the global recovery, as lockdown restrictions and curbs are reintroduced in in some Asia-Pacific countries.

Thailand, for example, reported its fourth consecutive day of rising infections today (11,784), as it country struggles to tackle its worst outbreak to date.

And in Australia, a lockdown has been extended in the state of Victoria as authorities try to control an outbreak of the “wildly infectious” Delta coronavirus variant.

Concerns over rising inflation - and the possibility of central banks’ tightening monetary policy too early - is also jangling investors’ nerves, after the US CPI index hit a 13-year high last month, and UK inflation headed further over target.

As Reuters explains

Economists at Bank of America have downgraded their forecasts for U.S. economic growth to 6.5% this year, from 7% previously, but maintained their 5.5% forecast for next year.

“As for inflation, the bad news is it’s likely to remain elevated near term,” they said in a note, pointing to their latest read from their proprietary inflation meter which remains high.

“The good news is...we are likely near the peak, at least for the next few months, as base effects are less favourable and shortage pressures rotate away from goods towards services.”

Kyle Rodda of IG says investors are growing concerned about economic fundamentals, after a strong recovery driven ‘extraordinary’ stimulus measures and optimism over vaccines:

There are clear signals that the markets feel a little unsettled about the global economic outlook. Of course, this isn’t to suggest that a rapid or imminent crash is upon us. But that perhaps after 6-9 months of unbridled optimism, underpinned by extraordinary stimulus and the vaccine roll-out, perhaps the best part of the economic expansion has been seen already, and the tippy-top of the cycle is foreseeable and has been priced-in.

Maybe it’s a misattribution, and perhaps it is due to what may prove to be temporary factors tied back to the spread of the Delta-variant. Nevertheless, the price signals are there for a growth slow down, with market participants currently being forced to mull the question “what next?”.

European markets are heading for a soft open too, with the FTSE 100 expected to fall:

The lifting of nearly all England’s remaining legal restrictions today could help businesses recover from the turmoil of the last 16 months, although soaring infections mean many customers and firms remain fearful.

And the Confederation of British Industry which represents British businesses, has warned of crippling staff shortages caused by people being told to self-isolate by the NHS test-and-trace app.

This so-called ‘pingdemic’ threatens to close supermarkets and bring car production lines to a halt, they warn.

The CBI said double-jabbed people should be able to escape the 10-day quarantine now, while others could return to work after a test.

The CBI president, Karan Bilimoria, said:

“With restrictions being lifted and cases rapidly increasing, we urgently need a surefooted approach from government.

“Building and maintaining confidence is key to securing the economic recovery. Mask-wearing in enclosed spaces, especially transport, will help create confidence for both staff and customers, as will clarity around the future availability of free testing for employees.”

The agenda

• 10am BST: Eurozone construction output for May
• 11am BST: German Bundesbank’s monthly report
• 11am BST: Bank of England policymaker Jonathan Haskel speech on ‘scaring in the economy’, at the University of Liverpool School of Management
• 3pm BST: US NAHB housing market index