More than £33bn has been wiped off the FTSE 100 within minutes of opening, dropping more than 2% over fears of a no-deal Brexit and new coronavirus restrictions.
Talks on a post-Brexit trade deal could continue into next week, following no breakthrough in another weekend of negotiations, while Covid rules have been tightened in Scotland, England and Wales.
A growing number of countries have put restrictions on travel from the UK – including banning flights – in an attempt to stop a mutant strain of coronavirus crossing their borders.
The situation has led to the First Minister urging the Prime Minister to extend the Brexit transition period – citing “the various implications” of the strain.
Asked if the Brexit transition period would be looked at, UK transport secretary Grant Shapps said there would “absolutely not” be an extension.
He told BBC Breakfast: “I think the one thing which could actually add fuel to the fire would be ending something that everyone’s known is ending for a very long time, which is the end of the transition period which completes on the 31st December, so absolutely not, no.”
The European Parliament had said the talks needed to be concluded by Sunday evening if it was to ratify any deal before the current Brexit transition ends on December 31.
However, if there were to be a deal, under EU rules it could be provisionally signed off by leaders of the 27-member bloc with ratification delayed until 2021.
If there is no deal by December 31, the UK will leave the single market and customs union and begin trading with the EU on World Trade Organisation terms – with the imposition of tariffs potentially leading to higher prices in shops.