The UK should expect an economic downgrade if the coronavirus crisis continues to wreak havoc across the world. Mark Carney made the astonishing prediction in one of his last interviews as the governor of the Bank of England. The alarming warning came a day after the Dow Jones industrial average suffered its worst one-day fall.

Fears over the spread of coronavirus had prompted the record plunge in the US stock market.

Analysts warned the outbreak could wreak economic havoc on a scale similar to the 2008 financial crisis.

Mr Carney told Sky News that supply chains were “getting tight” and there were fewer tourists on UK streets.

He said the Bank of England had already detected a fall in activity that could imply a downgrade – but it was too early to tell how badly the country would be affected.

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Mr Carney added that the Bank was constantly monitoring UK banks to ensure they remain in good health so there is no risk of COVID-19 triggering a financial crisis.

The Bank of England governor explained: “What we are picking up with some of our bigger companies and companies around the world is that supply chains are getting a little tight. That’s lower activity.

“There’s less tourism – as you can see on our streets here in the UK. That’s lower activity as well.

“We would expect world growth would be lower than it otherwise would be, and that has a knock-on effect on the UK.

“We’re not picking that up yet at all in the European and UK economic indicators, but if the world is slower then the UK, a very open economy, will have an impact.”

He added: “It’s too early to tell what it means for the UK, or its magnitude.

“But the most important thing is to make sure the system is functioning. We’re very confident about that, and we’re on top of it.”

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Thursday’s slump in financial markets came as the affected countries stepped up efforts to contain the virus by banning travel, closing schools and postponing major sporting events and business conferences.

Affected countries including China, Italy and Japan account for 30 percent of global output, sparking fears of a global financial crisis. 

The coronavirus, which has killed nearly 2,800 people worldwide, is putting Europe’s £15 trillion economy at risk. 

However, EU officials earlier this week rejected calls to suspend the Schengen agreement, which eliminated border checks in a 26-country region, saying such closures would do little to curb the epidemic.

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