Small multiples diagram shows that hospital admissions are increasing again in large parts of Europe

Covid restrictions in Italy and the UK are adding to Europe’s worries

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Latest news

The speed of Covid’s comeback leads to an urgent effort to understand why

Italy became the youngest European country on Monday to announce new restrictions on citizens as Covid-19 cases rise across the continent.

The stricter rules will be introduced regionally, Prime Minister Giuseppe Conte told parliament. Italy’s restrictions follow a weekend announcement by UK Prime Minister Boris Johnson for a new national lockdown in England.

The new measures to be introduced in Italy The rapid spread of the corona virus in the country is to be stopped from Wednesday. These include night curfews, distance learning for middle schools, restrictions on public transport, and restrictions on traveling between areas of high infection.

Business leader in England responded with dismay at the new restrictions, which will come into effect Thursday and will last at least four weeks. The new national lockdown will close all non-essential retail stores, severely restrict travel restrictions, and close pubs and restaurants as the number of confirmed coronavirus cases rapidly grows across the country.

Mr Johnson told Parliament Monday that there was “no alternative” to a national lockdown, claiming that without action, the NHS must turn sick people away for the first time because “our hospitals are out of space”. However, the prime minister is facing a backlash from his own MPs for deciding to put in place the new lockdown.

Chancellor Angela Merkel said earlier in the day German There would be no major New Year parties this year as a month-long lockdown went into effect. The lockdown, which also includes the closure of restaurants, gyms and theaters, is necessary to protect the German health system, said Ms. Merkel. Currently, more than 2,000 people are being treated for Covid-19 in German intensive care units, twice as many as 10 days ago.

The speed and extent of the comeback of Covid-19 in Europe has led to an urgent effort to understand why this happened and what can be done about it.

Denmark belongs to a group of countries that are at the lower end of infection rates in Europe, but Copenhagen is still trying to avoid an exponential increase in the number of cases.

“The most important [factor] is the opening of [educational] At the same time, you relaxed some of these protections, ”said Flemming Konradsen of the University of Copenhagen’s global health department. “The unifying feature is that we have relaxed very much. We had enough Covid-19. . . I think people moved on. “

The new wave of lockdowns in Europe sparked a series of downgrades in growth forecasts for the euro area. According to 18 economists polled by the Financial Times, the eurozone economy is expected to contract 2.3 percent in the fourth quarter of this year, a performance worse than forecast before the new restrictions were announced.

Markets

Oil prices fell to its lowest level in nearly six months on Monday as renewed lockdowns in Europe hurt the economic outlook for the global economy. Brent crude, the international benchmark, fell nearly 5 percent at one point to $ 35.74 a barrel. West Texas Intermediate, the US marker, fell as much as 6 percent to $ 33.64 a barrel before reducing some of those losses. Analysts cut their price forecasts on Friday after oil suffered its worst week since May.

The bar chart of the difference between reported EPS and analyst estimates (%) shows that US companies reported stronger than expected quarterly earnings

America Third quarter earnings season is less optimistic than forecasted by Wall Street analysts. Better-than-expected sales of mega-cap stocks like Facebook and Apple drove the surge, but consumer groups like Procter & Gamble also performed better than expected in the summer as demand for staples like Bounty paper towels and Ariel laundry detergents spiked and Fairy dish soap.

Leisure dominates UK Junk Bond Market has taken another blow following the announcement of a second lockdown in England, reflecting the strain on debt-laden pubs, gyms and restaurants as revenue dries up. Yields on bonds of several UK high street names like the pub group that runs the pub chain Slug and Lettuce and restaurant owner Wagamama have now hit double digits, underscoring the pain that awaits a slump in profits in a typically busy environment is before Christmas time.

Companies

A major U.S. mall owner went bankrupt after buyers left their properties during the pandemic. CBL & AssociatesThe company, with more than 100 properties in 26 states, is trying to convince creditors to scrape $ 1.5 billion in debt through a Chapter 11 restructuring. CBL’s largest tenants include retailers who have filed for bankruptcy in recent months, including JCPenney and Ann Taylor owner Ascena Retail.

Corporations have warned of hundreds of millions of pounds in lost business over the coming weeks as they struggled to estimate the cost of the new lockdown in England. Associated British FoodThe company, which owns high street chain Primark, said it would lose £ 375 million in sales after the UK government said all non-essential stores in England would have to close for at least four weeks from November 5th. Bookmaker GVC The result would be between £ 37 million and £ 43 million plus the insurer Hiscox said there could be an additional $ 30 million to $ 40 million in claims for canceled events if the Covid-19 restrictions persist into next year.

Graphic with sales growth in fast-moving consumer goods (change in% compared to the previous year)

Big at the beginning of the year Consumer brands tried to get out of a bleak time. A slowdown in demand from emerging markets had created a source of expansion and startups had seized the opportunity to connect with younger consumers. But since the pandemic, “trusted brands” have regained ground as shoppers turn to sanitary products and processed foods. A key question for multinational corporations, who typically plan strategically three years in advance, is how permanent behavioral changes will prove to be in the context of pandemics.

Global economy

The world is in one global liquidity trapthe IMF’s chief economist writes in the FT, and we must agree on appropriate measures to get out. The central banks have responded to the pandemic with measures that were essential to meet the liquidity needs of companies and households and to preserve jobs, writes Gita Gopinath. However, these measures are limited in their ability to stimulate demand. “Vulnerable but viable businesses need support, an issue that fiscal policy is much better at addressing,” she says.

The world’s best-equipped military believes it can defeat any enemy, but is fighting a new enemy: the number of Covid-19 infections exceeded 50,000 in the US armed forces Last month. The disease has disrupted military routines, writes Katrina Manson, US foreign and defense correspondent for the FT. “You could hear the coughing and sneezing even at night. Some people have complained to the drill sergeants about this, ”said a trainee in a military barracks.

Amid the coronavirus pandemic China is becoming the engine of global growth, writes John Plender. The Chinese government bond market, the second largest in the world, offers positive real interest income after taking inflation into account, which is no longer the case with US government bonds or major European bond markets. At the same time, the Chinese stock market is the only one outside the US that offers serious exposure to big tech. Western policymakers need to foster stable financial interdependence with China to ensure retirement income for their elderly population.

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In response to that, I expect to become redundant. How do I prepare myself? FT reader Another engineer wrote:

Sometimes redundancy can be a bit like spinning through a washing machine. . . Focus on seeking advice from those with frontline experience. The reality is that it is difficult, but it can also be transformative.

The most necessary

Travel has relied on paper documents for decades. But when we go back to mass aviation, how comfortable will we feel when we hand ours over Passports when checking in, boarding and entering the country? asks Michael Skapinker. And how comfortable do the people feel that we give them? The travel industry should use the current lull to reinvent itself. “Our largely paper-based travel systems are not up to the task, not only because they require excessive manipulation, but because they contain limited information,” he writes.

Last thought

The courtyard in the Castello di Reschio
The courtyard in the Castello di Reschio © Philip Vile

Reschio is one of the most ambitious rehabilitation projects in central Italy. The 1,500 hectare estate with wooded hills, dotted with atmospheric ruins, lies on the border between Umbria and Tuscany and is almost completely untouched by the post-industrial world. Antonio Bolza and his son Benedikt have been renovating the site since 1994 and will open their long-awaited Hotel Castello di Reschio next April, housed in an 11th century castle.