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“Jab by jab this life-saving programme, unparalleled in our history, is getting us back to the things we love”

Good news came over the weekend as a significant vaccination milestone was surpassed. Tipping over the marker, after over 700,000 jabs were administered on Saturday alone, the UK has now delivered over 60 million vaccinations, first and second doses combined.

Data shows that around 72% of UK adults have now had a first dose, with 44% having received both doses. The Prime Minister tweeted, “Jab by jab this life-saving programme, unparalleled in our history, is getting us back to the things we love… Please get both your vaccines when it’s your turn.”

Further positive news came over the weekend, as Public Health England research has identified that the AstraZeneca and Pfizer vaccines are highly effective against the Indian variant after two doses. Matt Hancock said receiving the second dose was “absolutely vital” and that he felt “increasingly confident” the final stage of easing restrictions in England could take place on 21 June.

After the government published advice for eight areas in England with high case numbers of the Indian variant, it was confirmed on Tuesday that the guidance is to be updated for Kirklees, Blackburn with Darwen, Bedford, Bolton, Burnley, Hounslow, Leicester and North Tyneside to clarify there are ‘no local lockdowns.’ From Monday, people in Northern Ireland have been able to return to indoor hospitality venues and meet up to six people from two households indoors. In Wales, family and friends can now visit loved ones in care homes, with Minister Mark Drakeford saying the “changes would improve the quality of life for residents and their families.” In Scotland, Nicola Sturgeon has urged people not to “lose heart” as cases increase, albeit from a very low base. Glasgow remains in level three, with restrictions to be reviewed later this week.   

Biohub launched

On Monday, the World Health Organization (WHO) and the Swiss Confederation announced plans for a global BioHub facility, to serve as a centre to enhance the rapid sharing of viruses and other pathogens between partners and laboratories globally. Dr Tedros Adhanom Ghebreyesus, WHO Director-General said, “this is an important step towards facilitating this flow of information.”

UK inflation rate more than doubles in April

The latest inflation figures for the UK were released by the Office for National Statistics (ONS) last week, showing a jump to 1.5% in April from 0.7% in March. Prices have been driven higher due to a rise in energy and clothing costs, resulting in inflation climbing at its fastest rate since March 2020. April’s inflation rise had been predicted by economists due to the easing of lockdown restrictions, but there are concerns that soaring inflation could push central banks to raise interest rates.

Further ONS data released on Friday, showed retail sales jumped 9.2% in April, due to the reopening of non-essential shops last month, which saw clothing sales increasing by 70% compared to March.

CBI advises ‘Seize the Moment’    

The Confederation of British Industry (CBI) has launched a ‘landmark’ economic plan for the next decade entitled ‘Seize the Moment’, urging both business and government to bury the Brexit hatchet and focus on building a fairer, greener economy. The CBI said it was ready to play a more proactive role in transforming the economy and it sees this year as a ‘once-in-a-generation opportunity to unite and agree to transform the UK economy.’

US stocks climb as unemployment falls

American firms are cutting fewer jobs as the economy strengthens, with new claims for unemployment benefit from US workers falling to a new pandemic low of 444,000, down from 478,000 in the previous week, the lowest since 14 March 2020. The positive job market news resulted in all major US equity indices climbing last Thursday. US stocks continued to climb on Monday as stocks benefiting from the economic reopening led the advance.

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Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

“I do not believe on present evidence that we need to delay our roadmap”

Despite concerns growing over the spread of the Indian variant, as clusters of the B.1.617.2 continue to be discovered across the UK, at a Downing Street briefing last Friday, Boris Johnson confirmed the planned phase three easements would proceed on 17 May, “I do not believe on present evidence that we need to delay our roadmap, but I have to level with you that this could be a serious disruption to our progress and could make it more difficult to move to step four in June.”

In areas where the variant is spreading, eligible people are being urged to get vaccinated and the army have been deployed to implement mass and surge testing. In Scotland on Friday, First Minister Nicola Sturgeon announced that Glasgow and Moray will remain under level three restrictions for at least another week, after initial research suggested an outbreak in the south side of Glasgow was being driven by the Indian variant.

As lockdown rules ease in England, Wales and most of Scotland, people are now able to hug loved ones, socialise indoors in limited numbers, and visit pubs and restaurants inside, amongst other activities. The ban on foreign travel has been lifted and replaced with the traffic light system, although people in Wales have been asked to only travel for essential purposes from 17 May. In Scotland, Nicola Sturgeon has urged people to “err on the side of caution and to staycation this summer.” In Northern Ireland, lockdown rules are scheduled to be reviewed later this week.

UK economy gathers momentum

Data released shows the UK economy contracted by 1.5% in Q1 2021, following growth of 1.3% in Q4 2020. As lockdown restrictions began to ease, robust retail spending boosted economic activity in March, with the economy estimated to have grown by 2.1%, the fastest monthly growth since August 2020. There are various expectations that the economy is set to strongly rebound this year. Chief Economist at the Institute of Directors, Tej Parikh, predicted the UK economy was now on course for a bumper bounce-back this year, “The first quarter should mark the low point for the economy in 2021. The lockdown and added costs of navigating new trading terms with the EU, limited many businesses’ trading activities at the start of the year.”

However, there are concerns about the long-term damage caused by the pandemic. Head of Economics at the British Chambers of Commerce, Suren Thiru commented, “The first quarter decline should be followed by a robust rebound in the second quarter, as the effects of the release of pent-up demand, as restrictions ease and the strong vaccine rollout, are fully felt. However, with the longer-term economic damage caused by coronavirus likely to increasingly weigh on activity as government support winds down, the recovery may be slower than many, including the Bank of England, currently predict.” 

Last week, Bank of England Economist Andy Haldane said the UK economy is set to grow at its fastest pace since the Second World War, overtaking the US, he summarised, “A year from now, it is realistic to expect UK growth to be in double-digits, activity to be comfortably above pre-COVID levels and unemployment to be falling. Such a tennis ball bounce in the UK economy would put it at the top of the G7 growth league table.”

In other economic news, the latest employment data released this week from the Office for National Statistics (ONS), shows that the unemployment rate in the UK reduced to 4.8% in the three months to March, down from 4.9% in February.

US inflation surges – markets react

Last week, the US Labor Department released a report outlining a surge in inflation in April, as the economic recovery picked up. Consumer prices increased by 4.2% in the 12 months through to April, up from 2.6% in March, marking the biggest increase since September 2008. Stock markets reacted negatively as concerns intensified that higher inflation could lead the US central bank to raise interest rates more quickly than expected. Markets have since rebounded as these concerns subside, and investors focus on the reopening of economies following restrictions.

Here to help

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.

“This unlocking amounts to a very considerable step on the road back to normality”

On Monday, the Prime Minister confirmed that the next stage of easing measures will go ahead as intended on 17 May. People in England will be able to resume numerous activities, including hugging loved ones, meeting six people or two households indoors, dining inside restaurants and visiting indoor entertainment venues such as cinemas and museums. The Prime Minister commented, “This unlocking amounts to a very considerable step on the road back to normality and I am confident we will be able to go further.”

Transport Secretary Grant Shapps made a much-anticipated announcement over the resumption of international travel last week. He confirmed that the ‘Stay in the UK’ regulation will lift on 17 May, meaning leisure travel from England will no longer be illegal. Strict border control measures will be in place and different levels of restrictions will be applied to individuals returning to England from countries based on a traffic light system. In total, 12 countries and territories have been added to the green list, including Portugal and Gibraltar. The lists will be reviewed every three weeks.

Most of mainland Scotland will move to level two restrictions from 17 May and international travel will be in line with the rules in England.

Election news

Last week, election news dominated. In England, local elections took place, with the Conservatives making significant gains, adding 13 councils. The Conservatives won the Hartlepool by-election, with a resounding majority, proving a real blow to the Labour Party, which has held the seat since 1964. Labour Party leader Sir Kier Starmer expressed his bitter disappointment in losing eight councils and has since embarked on a restructure of the party. In the Welsh Parliamentary election, Labour remains in power for another five years and in Scotland, the SNP will form the next Scottish government, but have fallen short of a majority by one seat.

The Queen’s speech

On Tuesday, the Queen outlined the government’s priorities for the year ahead, as she officially reopened Parliament. In a ten minute speech in the House of Lords, she highlighted 30 laws that ministers intend to pass in the coming year, saying the government would “deliver a national recovery from the pandemic that makes the United Kingdom stronger, healthier and more prosperous than before.”

BoE forecasts stronger growth

Last Thursday, the Bank of England (BoE) announced that its Monetary Policy Committee had unanimously voted to maintain base rates at an all-time low of 0.1%. In addition, the Bank increased its UK economic growth forecast to 7.25% for 2021, a significant upgrade from February’s estimate of 5.0%. This higher figure, which would represent the fastest annual rate of growth in over 70 years, appears to all but eliminate any possibility of negative rates this year, with economists predicting base rates could now begin rising during 2022.

The growth upgrade largely reflects the rapid vaccine rollout, which the Bank said will boost consumer confidence and will pave the way for a mini-spending boom as lockdown restrictions continue to ease. However, BoE Governor Andrew Bailey did strike a note of caution, likening any recovery to “more of a bounce back” than a boom. Mr Bailey added, “Let’s not get carried away. It takes us back, by the end of this year, to the level of output that we had essentially at the end of 2019. That’s two years passed with no growth in the economy.”

More positive economic news

Data released in the past seven days has provided further evidence of an impending strong UK recovery. The closely-watched IHS Markit/CIPS Purchasing Managers’ Index (PMI) for the service sector, for instance, rose to 61.0 in April, up from 56.3 in March, representing the fastest rate of expansion in more than seven years, which IHS Markit Economics Director Tim Moore put down to “a surge of pent-up demand… following the loosening of pandemic restrictions.”

The IHS Markit/CIPS Construction PMI also added to signs of a strengthening economy. While April’s headline figure of 61.6 was marginally down from March’s six-and-a-half year high of 61.7, the survey’s gauge of new orders reached its highest level since September 2014. Meanwhile, a survey of recruitment consultants conducted by KPMG/REC found that demand for workers in the UK is currently rising at the fastest rate in 23 years.

Full-time office return unlikely

Last week provided further evidence that most employers are not intending to bring staff back to the office on a full-time basis. A BBC survey covering 50 of the UK’s largest employers found that 43 have now decided to embrace a mix of home and office working. An Institute of Directors poll suggests almost two-thirds of firms intend to introduce a hybrid model, with staff working remotely for one to four days per week, while one in ten will allow employees to work from home entirely.

Here to help

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.