The big news this week is the Governments ‘plan’ for starting to move out of the strict lockdown we’ve experienced for the last seven weeks.
The UK Government’s Covid-19 recovery strategy
On Sunday 10th May 2020, the Prime Minister gave a recorded address to the nation. Whilst perhaps a little short on clarity, Boris Johnsons words did at least summarise the Government’s intention to move to a second phase of the crisis.
A strategy paper, released on Monday 11th May, provided more detail. This document sets out a broad strategy for the UK to emerge from strict lockdown into a world where COVID-19 will likely continue to circulate until a vaccine can be developed and mass produced. Unfortunately, it is unlikely there will be a quick return to normality (a new normal perhaps). The Government has also made it clear that it is not possible to make drastic changes as that could lead to a second wave of the virus. It does, however, set out a cautious roadmap to ease existing measures.
During ‘phase 2’ people will need to minimise the spread of the disease through continuing good hygiene practices, social distancing, isolation for symptomatic people and shielding for vulnerable groups. However, the Government has introduced a range of adjustments to current social distancing controls which will be enacted in ‘steps’, the timing of which will depend on the progression or otherwise of the virus.
Step 1 (from Wednesday 13th May)
• Continue to work from home if you can. Otherwise, people are now allowed to travel to work. Workplaces will be expected to follow guidelines to reduce the risk of transmission.
• Schools remain closed for most children but paid childcare can restart.
• People can spend more time outdoors, exercise as much as they want and drive to outdoor spaces irrespective of distance, subject to continuing social distancing.
• Guidance includes the wearing of a face-covering in enclosed spaces where social distancing is not always possible.
• Clinically vulnerable people should continue shielding.
Step 2 (no earlier than 1st June)
• Phased return for some schoolchildren (majority not likely to return until September).
• Opening non-essential retail (not hospitality).
• Cultural and sporting events to restart behind closed doors, for broadcast.
• Potential expansion of societal groups (e.g. family bubbles).
Step 3 (no earlier than 4th July)
The ambition here is to open at least some of the remaining businesses, such as personal care, hospitality, public places and leisure facilities.
Should the easing of restrictions result in higher transmission (the reproduction rate), then previous restrictions may need to be re-imposed. If you’re interested in the details, you can find the plan here: https://www.gov.uk/government/publications/our-plan-to-rebuild-the-uk-governments-covid-19-recovery-strategy
The UK market barely reacted to the release of the Government’s plan, as it had been well signposted in advance. It is also not dissimilar to many of the plans released throughout Europe in previous weeks.
Markets, whilst remaining volatile to news flow, haven’t made much headway since the initial rally petered out in late March. It would appear as though the monetary and fiscal support provided by governments and central banks has put a floor under markets for the time being. Given the unprecedented nature of this crisis, it would not be a surprise if we have a period of relative equilibrium as investors weigh up the awful short-term economic and corporate data against the potential for a gradually improving situation as economies move out of strict lockdown. There remains a risk that a second wave of infections or a slower than expected economic recovery could result in further market weakness down the road.
Not only does a crisis bring out the best (and sometimes worst) of people but it also generates a lot of creativity; celebrities providing activities for children (Joe Wicks’ PE lessons on YouTube), musicians performing online and comedians providing podcasts, for example. But my favourite has to be sports reporter Andrew Cotter commentating on his dogs on Twitter (@MrAndrewCotter).
As always, if you have any concerns or questions about your plans, please don’t hesitate to get in touch.