Powerscourt Coronavirus Briefing – 28 August 2020

Donald Trump made an apparently huge promise to the (virtual) Republican National Convention on Thursday evening when he said: “We are delivering life-saving therapies, and will produce a vaccine before the end of the year, or maybe even sooner,”

The thing is, he might be right. There are dozens of vaccine trials and many millions of doses are already being manufactured for rapid deployment if approved in the coming months. Look out for lots of booster talk from Mr Trump.

It cannot come soon enough for city centre retailers, service providers and landlords. As behavioural economists would have it, “nudging” should be more effective than ordering in seeking to change human behaviour. But nobody seems to have told the British public, who are still stubbornly reluctant to go back into their physical offices despite the entreaties of the Prime Minister.

Now the UK government is launching a major publicity campaign to encourage people to go back to work. A media blitz – to be launched at the end of next week after schools in England have reopened – will emphasise the positive social element of working in an office and stress that offices are safe.

Senior members of the Conservative party are reported to be increasingly concerned about job losses which result from lack of footfall into ancillary businesses in major financial centres, such as sandwich shops, gyms and dry cleaners, and frustrated at the expense of operating near-empty transport services.

And a rift has developed at the top of the party as to whether or not to push people to return to physical offices. The health secretary, Matt Hancock, is said to be more concerned with how effectively they are working than where they are working, putting him at odds with the Chancellor, Rishi Sunak, who is concerned about the knock-on impact on the wider economy.

Two days ago, Carolyn Fairbairn, the head of the Confederation of British Industry, warned of a significant economic impact from the increasing trend towards remote working, with financial districts becoming “ghost towns”.

It’s a difficult time to be winning this argument though. On Thursday, the UK recorded 1,522 new coronavirus cases, the highest number since mid-June and next week millions of schoolchildren will go back amid continued anxiety from teachers and parents about their safety.

It won’t have escaped ministers’ notice that South Korea is now tightening restrictions, including closing many private schools, due to a virus resurgence.

India suffered more than 1,000 coronavirus deaths for a second day in a row on Thursday, while the detection of new cases hit an all-time high of 76,826, highlighting that the country is rapidly becoming the epicentre of the virus.

Meanwhile on Thursday, a tale of two companies shows the way coronavirus has bifurcated the economy, with traditional engineering and manufacturing-based companies still reeling while technology-based firms build ascendancy.

Rolls Royce on Thursday unveiled plans to shore up its balance sheet with a £2 billion asset sale as it swung to a record pretax half year loss of £5.4 billion.

But the tech (ish) IPO is back. The Hut Group, an online fast moving consumer goods (FMCG) retailer, is aiming for a valuation of £4.5billion in what will be the largest London listing this year.

Asian markets were lower overnight after reports that Japanese Prime Minister Shinzo Abe will resign for health reasons today.

WHAT ARE COMPANIES SAYING?