12. Weekly Newsletter
The Bank of England (BoE) has warned that the UK’s economic outlook is “unusually uncertain” even with the rapid vaccine rollout. A focus on how the pandemic evolves in the coming months will be a top priority and the maintained interest rates at 0.1% for March has highlighted this lack of clarity. Some analysts have also noted that the BoE may be reluctant to raise interest rates as their own finances may be hit due to their existing ‘borrowing’ scheme. However, the governor of the BoE revealed last week that he expected the economy to “get back at the end of this year where it was at the end of July”.
OBR forecasts for the year show pleasing signs for the recovery as unemployment predictions for 2021 suggest a peak of 6.5%– down from the 11.9% previously announced. Furthermore, business optimism is at a 12-year high as previous challenges, such as a no-deal Brexit, can no longer be considered threats to trade. Other key data points show that birth rates are at the lowest levels ever recorded, London has had its first population decline in a century and 2021 will be the first year with a majority of energy being generated from renewable sources.
The UK’s vaccine rollout continues to lead in the continent and there are now more vaccinated adults than non-vaccinated for the first time. Across the entire UK population this equates to almost 45% of all residents and totals 28m vaccinations. All those aged 50+ are currently invited to book their first vaccination with a record 844,285 being inoculated on Sunday alone. However, the NHS has been warned of a 5m dose shortfall (from a 10m dose order) due to exports of the Oxford/AstraZeneca vaccine being restricted by the Indian government and thus could reduce upcoming vaccination figures.
Official data presently shows the number of cases in Britain are still falling but at a slower rate due to the nation slowly reopening. Following a peak 7-day average infection rate of near 60,000, per day, during January these figures now sit at just over 5,000- with COVID-attributed deaths below 100 per day. On the 29th of March: outdoor sports/leisure and outdoor parent and child groups (with up to 15 parents) can resume. The more dramatic date is the 12th of April: whereby, non-essential retail, beer gardens, zoos, theme parks, indoor leisure and camp sites can restart.
Government Carbon Emissions
During 2020, carbon emissions in the UK fell 13% in comparison to the year previous- a figure only beaten by France (-15%). However, 2021 is likely to see a rebound in the nations carbon footprint as travel and industry resumes. To counter this, and build for the long-term, the Government is launching a scheme to cut industrial emissions with £1bn of funding. The specifics of this 170-page plan forecast a two-thirds decline in just 15 years by supporting firms to waste less energy, invest in underground carbon storage and develop low-carbon technologies (such as LED lighting and insulation).
The news comes as the UK, which is targeting carbon neutrality for 2050, is on track to host the UN Climate Change Conference in Glasgow later in the year; although, this has raised the political profile of a new Cumbrian coal mine to a national level and now subjects it to a Government-led review. Public appetite for environmentally-friendly spending is high and, for instance, following a year with a 28-year low for new car sales: fully electric car sales increased 180% to 108,205 in 2020 (6.6% of the market). Whereas, diesel car sales fell 55.0% for the year and follows a steep declining trend due to a negative public image. The Government will also be banning the sale of new combustion-engine vehicles for 2030 which will only further support the electric car market.