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UK To Lift Most Covid Curbs Despite Warnings and Surge in Cases

The UK officially confirms almost all coronavirus restrictions will be lifted next week. The move ignited a wave of criticism both from doctors and economists.

SageFX - Jul, 13, 21

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Principal Points

  • The UK officially confirms almost all coronavirus restrictions will be lifted next week
  • The move ignited a wave of criticism both from doctors and economists

The UK government on Monday confirmed plans to lift almost all Covid-19 restrictions in England on July 19. The announcement came amid soaring cases and warnings by health experts that the threat to the nation remains.

Prime Minister Boris Johnson decided to ease the remaining measures as he urged the people to exercise “extreme caution” in their daily lives. A move that was interpreted as a shift of responsibility from the government to individuals and companies who should do their best to tackle the rapid spread of the virus.

“It is vital that we proceed now with caution, and I cannot say this powerfully or emphatically enough – this pandemic is not over,” Mr. Johnson said yesterday in his speech. “This disease, coronavirus, continues to carry risks for you and your family. We cannot simply revert instantly on Monday 19 July to life as it was before Covid.”

The reopening happens while the UK is amid a significant Delta surge. Compared with the average a week ago, the seven-day rate of confirmed cases has jumped 69% to 32,600 on Monday. Health Secretary Sajid Javid said yesterday confirmed infections could reach as high as 100,000 a day in the coming weeks.

The decision to drop restrictions drew criticism from doctors who warn that the quick rise in cases could overburden the National Health Service. Economists, on the other hand, argue that the premature reopening could lead to a dip in consumer confidence over the next few weeks as people take a cautious approach to the perceived threat to public safety once restrictions drop.

Delta Strain Impacts Europe

The step toward easing restrictions almost completely in the UK comes against the backdrop of a Delta virus wave that is sweeping across Europe. The Netherlands and France reimposed tightening controls to curb the spread.

Meanwhile, the UK stock market was held back on Monday due to the increased uncertainty over the outlook for the economic recovery. The FTSE100 was pressured near the flatline during the entire session yesterday and ended up barely positive, up 0.05%.

Other European bourses, however, sprinted to all-time highs. Germany’s DAX reached a fresh intraday record of 15,806.90 and closed the day right under, at 15,790.51. The pan-continental Stoxx Europe 600 advanced to a new record as the index gained 0.69% to finish the session at 460.83.

On monetary policy, the European Central Bank is set to meet in Frankfurt next week to discuss implementing a new strategy that includes an exact time when to unwind part of the pandemic stimulus. The ECB also set a new inflation target of 2% in the first change to the central bank’s monetary policy since 2003.

The decision when to start scaling back the monetary support that has buoyed the financial markets in Europe for over a year will be crucial to the economic health of the bloc. Since the start of the pandemic,

the European Central Bank has been using a €1.85tn Pandemic Emergency Purchase Program (PEPP) aimed to support banks, businesses, households, and individuals during the coronavirus crisis.

In US stock market action, US futures on Tuesday point to a mixed open after major indexes extended their Friday gains and closed at new records on Monday. Later today, investors will closely watch the inflation data to get a sense of whether inflation pressures are coming down. In addition, Federal Reserve Chairman Jerome Powell is set to deliver a speech on the economy, employment, and inflation.