20. Weekly Newsletter

UK’s 17th May Reopening

On Monday, 17th May, the restrictions on businesses and venues in England were reduced as part of ‘Step 3’ in the Government’s roadmap out of lockdown plan. All restaurants, pubs, social clubs, cafes, hotels, group exercises, casinos, cinemas, museums, stately/historic homes, theatres and many others were able to resume to almost complete normality. PM Johnson thanked the nation for their sacrifices and declared “your efforts have so visibly paid off”.

Initial reports suggest that restaurants and pubs had a strong start to the indoor re-opening but, because of the rain, the High Streets did not experience the same uptick in demand. Additionally, Scotland has seen a reintroduction of regional disparities in lockdown lifting with Glasgow and Moray being held back as a result of rising case numbers. This has the led to The Times running with today’s front page warning that the entire UK may face the return of the ‘tier’ system for 2021.

COVID Update

Over 4.4m people in the UK have tested positive for COVID but the average daily increase, which has remained low recently, may be rising across England. A total of around 127,600 deaths have been attributed to the virus and the daily increase sits in the single digits. Nationally, 37m people (70% of adults) have received their first vaccine and over 20m of these patients have also received their second dose. This brings the total number of inoculations carried out, by the private sector and National Health Service, to around 57 million.

After months of international travel being restricted: the UK Government on Monday (17th May) allowed travel to it’s ‘green list’ of countries which will not require quarantining upon return. Portugal, Gibraltar and Israel feature among the approved 12 countries/dependencies. However, the next phase of restrictions being loosened, scheduled for 21st June, is at risk due to the rapid rise of the COVID ‘Indian variant’ in the north of England. The current data suggests the vaccine is proving successful with this variant but case numbers continue to rise with numbers doubling in just a week.

Economic Outlook

The chief economist and executive director of monetary analysis at the Bank of England, Andy Haldane, has predicted that this year the UK is “is set to grow at its fastest pace since the Second World War”. This would outperform figures for the US and is backed by the current British unemployment which has improved to just 4.9% in the month of April. If true, Haldane described this “tennis ball bounce” in the economy as then being “top of the G7 growth league table”. Overall, the Bank of England are anticipating a 7.25% growth in GDP for the year.

In Q1 of 2021 the UK experienced a 1.5% decline in GDP due to the nationwide lockdown but March surprised analysts with 2.1% growth. The month saw 1.9% month-on-month growth in services, a 2.1% increase in manufacturing output, construction up 5.8% and retail salves volumes rising 5.4%. This means the economy is still 5.9% below pre-pandemic levels but is set of a promising V-shaped recovery. Haldane also estimated that inflation levels could be above the 2% target and thus voted for the Bank of England to scale back quantitative easing.

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