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Saturday 11th April 2020
Hi Friend,
Schools Could Be Open In Weeks ...
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| As U.K. case load peaks ...
In Denmark, day schools and nursery schools will open on April 15th. All other restrictions, including the closure of bars, restaurants, hair dressing salons and shopping centers will stay in place, until the middle of May.
In Austria, DIY shops and garden centres will reopen next week. Retail stores and hair dressing salons will be open, from the end of the month.
In Spain, the lock down is to be partially eased. Factory and construction workers are to restart work. Most shops and offices will stay closed for the moment.
In Sweden, schools, nurseries, bars, restaurants and sports clubs, all remain open. Social distancing is observed within reason. To date, there has been no dramatic surge in cases or fatalities.
In the UK, the government is preparing options for an exit plan over coming weeks. Public Health England suggested schools could reopen, as coronavirus restrictions begin to be lifted. Head teachers are said to be lobbying, to reopen schools before the summer holiday, subject to scientific advice.
Paul Cosford, the agency's medical director, said that easing the lockdown for the young was being considered. "The importance of children being in school is paramount".
For the moment, the government has made it clear, it is too soon to consider reopening schools. The priority is to maintain the clampdown until there is clear evidence of a slow down in cases and fatalities across the country. Professor Ferguson, from Imperial College, in a Radio 4 Today programme said. "It's going to be several weeks before we can definitely conclude anything about the rate of decline and hence when measure may be lifted."
The good news, as expected, the UK case load peaked last week. The garden centres could be allowed to re-open soon, if the good weather continues. The kids could be back in school 'ere too long. We continue to expect some social relaxation by the end of April, with a more extensive release by the end of May.
"We don't want these measures to continue longer than is absolutely necessary" Professor Ferguson explained, "the economic costs, social costs, personal costs and health costs are huge" and so they are ... the economic costs, in particular, are simply unsustainable for too long ...
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| | Lock down to cost Treasury ...
Reports this week, the lock down will cost the Treasury £2.4 billion per day as the shut down continues. The government has been shocked at the extent to which the social distancing measures have lead to a collapse in economic activity.
The Chamber of Commerce reported this week, 20% of their members intend to furlough all staff, two thirds said they would furlough between 75% to 100% of the workforce.
The
Resolution Foundation, has suggested the government plan to subsidise
wages could cost the Treasury £40 billion, every three months in which
the scheme operates.The Bank of England has extended the Treasury's overdraft limit to assist with funding.
Consumer confidence has plummeted. The unemployment rate is set to double. Car sales fell by over 40% last month, retail sales fell by 40% last week. Footfall in shopping centres and retail parks collapsed as traffic fell by over 80%. Construction output fell. The latest reports from IHS Markit's PMI dropped to 39.3 in March from 52.6 prior month.
We await with some concern the data on manufacturing and the service sector, the numbers will not make for great reading within The Treasury.
Capital Economics have suggested the economy could shrink by 15% in the second quarter. CEBR, the Centre For Economics and Business Research have suggested a 30% drop is possible. Using a relatively simple output and employment model by sector, it is pretty easy to arrive at a drop in output of 20% which would lead to a jump in unemployment to 20% without government intervention.
In the US, JP Morgan is forecasting a collapse in GDP levels by 40% in the second quarter. Over 16 million jobless claims have been filed in the last three weeks. The number could rise to 25 million in April with the unemployment rate rising to over 20%.
WeWork has warned it will be skipping some rents, McDonald's has warned of "difficulties" as sales fell by 20% last month. The World Trade Organisation has warned, global trade is heading for an ugly fall. Danny Blanchflower is warning of a second great depression.
Most economists expect a rapid recovery once social sanctions are lifted. The lock down cannot continue for too long. In the U.S. the President is subject to conflicting advice from scientists and economists. The option to reopen the USA on Mayday would appear to be a step too soon, even though the case load may have peaked in certain states already ...
That's all for this week. Have a great, safe, week-end, wash your hands and don't talk to strangers,
John
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