By Powerscourt on 26/09/2020
As we continue to digest the impact (or lack) of Rishi Sunak’s rescue measures, a stark warning came yesterday from the World Health Organisation. It estimates that global death toll from Covid-19 could double to 2 million before a successful vaccine is available and could even be higher if ‘without concrete international action’. New cases in the US topped 7 million (20% of the world’s total) and Europeans were urged to ensure that they’ve done enough to avoid the need for another wave of lockdowns, which may come too late, as UK, Spain and France imposed further restrictions and localised lockdowns this week in an attempt to control the infection.
In the UK, in a repeat of scenes at the beginning of the pandemic, Tesco has started rationing certain items to avoid panic buying as new coronavirus restrictions come into force including flour, pasta, anti-bacterial wipes and of course… toilet roll. The news comes as the UK broke a new record for the highest daily increase in coronavirus cases so far, with a rise of 6,634 in just 24 hours.
London was this morning added to the Covid watch list – allowing it to get extra support in testing and acting as a first step in potential additional lockdown restrictions being placed on the capital.
Efforts to develop a vaccine are bringing the international community closer together. There are c. 40 different coronavirus vaccines in clinical trials at present. The COVAX financing scheme designed to guarantee fast and equal access to the Covid-19 vaccine, registered 159 participating countries. Boris Johnson in his pre-recorded speech to the United Nations general assembly today is expected to pledge £500m in aid funding will go to the COVAX vaccines procurement pool. Crucially, China is still deciding on its participation in the scheme, but the WHO is keen for it to play a role in potentially supplying the vaccine to the scheme, which would be a further boost to the Chinese economy.
Despite this gloom, the outlook for the global economy in Q3 looks positive and is showing promising signs of a V-shaped recovery with GDP expected to reach its pre-crisis levels by H2 2021, according to analysis by global macro-research firm Fathom Consulting published by Reuters. By then, it will be too little, too late for one million young and low-skilled workers in the UK that economists predict will lose their jobs by the end of this year. Meantime, public sector borrowing in the UK reached £35.9 billion in August, £30.5 billion more than in August 2019 and the third highest borrowing in any month since records began in 1993.
Investors across the globe haven’t displayed much appetite for risk this week as concerns over the economic effect of a Covid-19 spike and the likelihood of another stimulus package for the US economy tightened with stocks around the globe falling 2%.
WHAT ARE COMPANIES SAYING?
Consumer & Retail
The supermarket chain has followed Morrisons in announcing that it is reintroducing purchase limits on high demand items such as toilet roll, dried pasta and flour and baby wipes in an effort to prevent panic-buying. The retailer said that the limits have been brought in “to ensure that everyone can keep buying what they need”. The move is a repeat of measure brought in by the big supermarkets in March when consumers first started to stockpile goods ahead of an impending lockdown. “We have good availability, with plenty of stock to go round,” said a Tesco spokesperson, “and we would encourage our customers to shop as normal.”
The UK bar chain is considering closing some of its venues as a result of the new restrictions introduced this week on hospitality businesses. The group currently runs 73 bars across the UK, but is reported to have hired the advisory firm AlixPartners to explore options after the government announced measures that will mean its sites have to close at 10pm for up to six months. In a statement on Friday, the chain said the options being considered included the potential closure of a number of its bars through a company voluntary arrangement.
Reuters reports that the Japanese car manufacturer has said that it will seek voluntary retirement from 500 – 600 employees, mostly in management, in an effort to cut costs. The company is expected to post a net loss of 360 billion yen in the year to March 2021, following a significant drop in sales due to the coronavirus pandemic. This is in addition to plans to cut 20% of fixed costs in two years by shrinking its workforce and production and closing unprofitable dealerships. The company plans to solicit voluntary retirement from management employees aged 45 years and over in Japan. The company declined to comment on the story.
The Chief Executive of the multinational aerospace company has warned that the ongoing closure of borders and grounding of flights represent a danger of long-term damage to society, the global economy and even peace. In an open letter, he said “aviation connects and unites people, cultures and businesses, providing the lifeline of international trade, supporting development, education and global economies” adding that “aviation safeguards global peace and stability. It underpins the multilateralism, diplomacy and conflict resolution that many have taken for granted in the latter part of the 20th century”. He also warned that a “prolonged economic malaise will leave governments and businesses on a weaker footing to address the most pressing issues”
The German engineering and technology company has developed a Covid-19 test which can reportedly deliver results in under 40 minutes, using a portable device. Partially funded by the German government, the company has suggested the test could be used at airport and sporting events, allowing people to wait for their results. The test uses polymerase chain reaction technology, which is widely considered to be the most accurate method of testing for the presence of coronavirus. Bosch said its test has a “sensitivity” — the ability to avoid false negatives — of 98 per cent, and a “specificity” — the ability to avoid false positives — of 100 per cent.
IN THE NEWS
1m more British workers set to lose jobs this year, warn economists – Financial Times
More than a quarter of UK under stricter rules – BBC News
10m people in London face local lockdown – The Times