Johnson Says Time for Less Covid Fear as U.K. Lowers Alert Level
Comment of the Day

June 19 2020

Commentary by Eoin Treacy

Johnson Says Time for Less Covid Fear as U.K. Lowers Alert Level

This article by Stuart Biggs for Bloomberg may be of interest to subscribers. Here is a section:

Prime Minister Boris Johnson called for people to be “less apprehensive” about Covid-19 as the U.K.
lowered the pandemic alert level and he promised to get all students back to school by September.
The new Level 3 alert indicates the virus is no longer spreading exponentially after almost three months of lockdown, and the guidance allows for some relaxation of social-distancing

Johnson hinted the rule that people should stay 2 meters (6 feet, 7 inches) apart may be relaxed to 1 meter for pupils -- as Northern Ireland has done -- to help re-open schools in England. He also said the track and trace system, and a new treatment for the virus, means the pandemic is entering a new phase.

“We’ve got to start thinking about a world in which we are less apprehensive about this disease,” Johnson told broadcasters on Friday. “On the social-distancing measures, watch this space, we will be putting in place further changes as the science allows.”

Eoin Treacy's view

We have a lot more testing so the number of cases continues to rise. The protest movements that sprang up at the end of May and the end of lockdowns have also both contributed to the increasing pace of the spread of the coronavirus. The big question we all need to answer is does it matter?

I know I don’t want to get it. I can’t miss ten days of work to get over it. However, if that is the extent of the risk for most working age people, do we really need to shut down the economy? The fatality rate is now accepted to be about twice as bad as the seasonal flu. The public health risk of missed treatments is probably greater than the risk from the coronavirus. Nevertheless, the most at-risk groups will definitely still need to isolate themselves. In fact, there is probably an even greater need for isolation for at-risk groups today because the virus is now probably endemic.

Where I grew up in Ireland there was a tuberculosis isolation hospital. A family friend contracted the disease when I was a child and every one of her contacts had to be tested. With a clear risk to public health, isn’t there a rationale for keeping COVID-19 patients outside the conventional healthcare system entirely? Isolation of people who require intensive treatment would help restore confidence that a coherent strategy is being followed. Meanwhile, the threat is that because public fear is so high, more cases will result in less economic activity, even as the need for lockdowns abates.

That pretty much ensures the need for additional stimulus on both and monetary and fiscal basis will remain pressing for at least the remainder of the year. The Bank of England’s reticence to boost support is an outlier internationally and that is weighing on the Pound because of the threat it will slow the recovery.

Meanwhile the stock market’s performance is heavily skewed towards reliance on the continued supply of liquidity. We can continue to expect ebb and flow as the likelihood of additional stimulative measures are debated.

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