Hong Kong's leader Carrie Lam introduced on 8 February the most draconian Covid rule to date by banning private gatherings of more than two families.

The leader's news announcement coincided with a record 625 coronavirus cases on Tuesday, with cases on a rapid upward trajectory. There were 2,600 infections over the past two weeks compared with just two in December.

Lam said public gatherings would be limited to two people from four currently, while churches and hair salons would close from 10 February.

She also announced a ban on private gatherings of more than two families.

"The time has come for Hong Kong to take some tough measures," Lam told a news briefing, "We are adopting stringent measures to protect Hong Kong."

She added: "We will continue to adhere to the current strategy of trying to contain the spread of the virus, or what we call maintaining this dynamic zero regime.

"But when vaccination rates increase, when Omicron disappears and other things happen, then of course we will continue to revisit our strategy. But nothing will change our commitment to safeguard the life and the safety of the people of Hong Kong."

This set back follows Lam's more positive announcement on 27 January that the 21-day quarantine period most arrivals face, one of the world's most stringent timelines, would be cut to two weeks because the Omicron variant had a shorter incubation period.

International businesses have been sounding alarm bells of a talent drain as rival financial hubs are reopening.

In a draft report obtained in January by Bloomberg News, the European Chamber of Commerce warned businesses that the city could remain internationally isolated until 2024.

"We anticipate an exodus of foreigners, probably the largest that Hong Kong has ever seen, and one of the largest in absolute terms from any city in the region," the draft report said.