When I started this column back in December I did not anticipate a single subject would dominate it so much, but as I wrote last week it would be silly not to address the latest coronavirus circumstances given that each new development so far has had a profound impact on share prices, economic growth forecasts, and so on.
So, today’s latest developments on the subject.
The British government has published a planning document in a press conferences hosted by the prime minister, Boris Johnson. Perhaps the most alarming thing contained therein is the predicted scenario in which up to 20% of the UK workforce could be off sick at the peak of the epidemic if the policy of ‘containment’ begins to fail. The government says it is prepared to limit the police’s remit to only the most serious crimes during such a period, in order to keep officers removed from the risk of being infected en masse and risking degradation of public order. Other measures being considered include restrictions on social gatherings, enforced home working, and the closure of schools.
The governor of the Bank of England thinks it will cause a ‘large shock’ to the economy, though he says it would likely be “ultimately temporary”. In comments to the House of Commons Treasury Committee, he said the disease is now “beyond the containment phase”, and thinks the effect on growth could last as long as six months. His comments are hot on the heels of those by the OECD which yesterday warned the global economy’s growth rate would slump to its slowest since 2009 due to the outbreak. Notably though, it only changed its forecast to 2.4% growth instead of the previously forecast 2.9%, which although significant on a global scale is hardly a global recession.
The Premier League is debating whether the season can be completed in light of the growing body of advice from public health officials and the government itself. Apparently it is considering the possibility of matches being played “behind closed doors” if there are government restrictions imposed on large gatherings of people. For instance, the upcoming England v Italy friendly, which is due to be played at Wembley at the end of this month, would attract large numbers of Italian fans at precisely the time when there are growing numbers of infections in the northern part of that country. Right now the government advice in the UK would allow the fixture to proceed but it may not stay this way as the circumstances change.
The situation in China, where it originated, seems to be stabilising as the rate of new infections dropped. It reported 125 new cases on Tuesday, which is the smallest number of new patients in one day at any time since January. Obviously it is speeding up elsewhere, with India, Germany and Iran all reported new cases, and the WHO describing the situation as “uncharted territory”, but it does bode well for the effectiveness of containment strategies if they are applied properly. China was perhaps the most powerful policy implementer, banning tens of millions of people from leaving the first few places where the disease was spreading, in Wuhan and Hubei province.