Lockdown – Reflections at the end of week 46

As winter prepares to take another bite, the prospect of relief of our locked down winter dormancy has arrived. Infection numbers remain high but are falling and, buoyed by the speed of the vaccination programme and confidence in its effectiveness, the government has identified 8th March as the date when children can go back to school and a release of current restrictions can begin. There is caution in the announcement with warnings that freedoms will arrive slowly - this is fair enough given the previous poor record of over-promising and abiding concerns about further variants of the virus - but it does give us all something to look forward to.

The Bank of England has also been looking forward. Whilst its forecast is of a drop in GDP of a little over 4% for the locked down first quarter of 2021 is unwelcome but not surprising, it has forecast a rapid bounce back for the economy once lockdown conditions begin to be eased. It won’t be plain sailing - for example, it is likely that, in spite of economic recovery, unemployment will continue to rise as the furlough scheme unwinds. There is also some mention of negative interest rates as figures suggest that around £125bn has been put into savings accounts during the lockdown and, it seems, that figure will grow with savers expressing caution about going out and spending it.

What is clear is that any lasting economic recovery will make plain those areas of the economy which have undergone rapid and permanent change. High Street shopping is one clear example, but a range of other sectors, including hospitality, entertainment, travel and commercial letting are unlikely simply to go back to where they were 12 months ago. The chancellor has been notably quiet of late and it remains to be seen whether he feels that the vaccination programme’s effect against Covid is sufficiently assured for him to start to tackle the whole grisly business of repaying government debt in next month’s budget or that he has to kick the can further down the road towards autumn. He’ll be keen to do the former, but it wouldn’t be surprising if he is forced towards the latter. I suspect that any announcement on this will be made as late as it possibly can be.

I can’t let this week pass without mention of Captain Sir Tom Moore whose determination and philosophical brand of optimism lit up the nation and inspired many. It’s also interesting to reflect on the extraordinary workings of social media. When a 99 year old man living in a Bedfordshire village decided to do a sponsored walk to try to raise £1,000 for his local hospital, I defy anyone to have predicted that his efforts would so capture the nation’s attention and have the effect that we came to see. I would also question whether anyone could, hand on heart, say that they foresaw that we’d all have revisited the acquaintance with sea shanties of school music lessons which have seen a Scottish postman give up the day job and sign a record deal. Our phones and tablets, already highly influential in our lives before lockdown have increased their hold further. Your correspondent has, for example, been reluctantly dragged into the world of Whatsapp. They can be a force for good, or, as Donald Trump’s tweets and mental health professionals and charities will tell you, they can be a channel for the caustic and harmful. It will be interesting to see how our use of social media evolves as our ability to get out and about and to see people in the flesh returns.

I shouldn’t let the week pass without complimenting the government on the overall speed and effectiveness of its vaccination planning and roll out. Whilst there have been some hitches - surely inevitable in such a large programme - its success, supported by the early ordering of vaccines has been notable. One indirect testimonial to this has been the outbreak of politics-driven sour grapes from the EU this week, but the more important things are the high numbers of people who have been vaccinated already and the programme’s considerable momentum. In the interest of balance, I also feel compelled to mention Covid hotels and the so far unanswered question of why, if they’re perceived to be important enough to bother with, there have been such delays and confusion. I guess that if these things all went smoothly, we might start to get the uneasy feeling that we’d all gone to bed in the UK and woken up in Switzerland, but it’s hard to see how this one has proved to be so difficult.

Happily for me, this lockdown has not stopped professional sport, so I can spend the next couple of days huddled by the fire and obsessing about rugby and cricket. Whatever your interests, I hope you are able to find similar diversions for your weekend.

Ian Waine
Senior Partner