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A significant delay or disruption in vaccine distribution is one of the most “substantial” risks to the economic outlook, Kansas City Federal Reserve president Esther George said on Tuesday. Ms George expressed optimism about the continued recovery and said “there is considerable scope for a snapback” once the US is past the pandemic.
Ireland has tightened pandemic travel rules for the second time in six days, requiring people visiting from all countries to present evidence of a negative Covid-19 test within 72 hours before arriving. The move on Tuesday by Micheál Martin’s government widens the scope of its decision last week to impose similar restrictions on people arriving from the UK and South Africa.
US crude production will keep falling in 2021, as the fallout from the worst oil price collapse in decades following the Covid-19 crisis continues to punish the country’s once-rampant shale patch, according to new federal forecasts. The US Energy Information Administration said crude supply would drop to 11.1m barrels a day this year, after averaging 11.3m b/d in 2020.
Brazil's health officials said a Chinese coronavirus vaccine has shown an efficacy rate of just 50 per cent, significantly lower than levels originally indicated. Scientists from a leading biomedical research body released the new figure on Tuesday, following criticism over a lack of transparency in earlier results from trials of the CoronaVac jab in the country.
A masked shopper browses inside a Vons supermarket in San Diego
US supermarket chain Albertsons boosted its full-year outlook and reported better than expected third-quarter results as people continued to dine at home and shop online amid a coronavirus resurgence. The company, which also owns Safeway and Vons, said revenues rose 9 per cent from a year ago to $15.4bn in the quarter ending December 5, just ahead of analysts expectations.
India has procured 16.5m vaccine doses days ahead of the start of its nationwide inoculation campaign, officials said on Tuesday. Health ministry officials said 11m doses of Covishield, the AstraZeneca vaccine manufactured by the Serum Institute of India, were bought for Rs200 ($2.70) each, and 5.5m of Covaxin, the shot developed by Bharat Biotech, for Rs206 a dose.
Valneva is in advanced talks with the EU about supplying up to 60m doses of its Covid-19 vaccine, as the bloc seeks to bat off criticism that its immunisation programme has been slow to begin and get into gear. The French biotech company said on Tuesday that it was in advanced discussions with the commission, indicating that a deal was close to being signed.
Zoom, the video communications company that has prospered during the pandemic, is to raise $1.5bn in a share issue. The company, whose products have been used for everything from business meetings to online quizzes over the past year, said on Monday that the fundraising could also be expanded by $225m. Zoom’s shares have risen by 356 per cent over the past year.
Switzerland approves Moderna vaccine
George Russell in Hong Kong
The Swiss drug regulator on Tuesday approved the Moderna Covid-19 vaccination for general use in adults.
The federal government has ordered about 7.5m doses.
“In the next few days an initial delivery of 200,000 doses will be made to the Armed Forces Pharmacy, which will distribute the vaccine to the cantons,” the federal council said in a statement.
Together with the Pfizer/BioNTech vaccine approved by Swissmedic on December 19 2020, about 500,000 doses of vaccine are now available for use in Switzerland.
“The first priority will be to vaccinate especially vulnerable people,” the council said.
UK’s Sunak vows to keep key sectors open
FT reporters in London
UK chancellor Rishi Sunak is fiercely resisting any tightening of the lockdown in sectors such as the housing market, construction and manufacturing, despite pressure on ministers to go further to tackle Covid-19.
Mr Sunak’s allies said it would be “ludicrous” to close factories and building sites, arguing that both settings are “safe” when operated in a Covid-19-secure way. He also wants to keep the housing market functioning during the pandemic.
Yet prime minister Boris Johnson is being warned by scientific advisers that the current lockdown does not go far enough and that he should tighten restrictions further within days.
Read more here
US to require pre-flight tests for foreign visitors
CDC recommends passengers undergo a test three to five days after landing
Hannah Kuchler in New York
International air passengers trying to enter the US must present a recent negative Covid-19 test, according to a new rule from the Centers for Disease Control and Prevention.
Visitors will have to show a negative test result from the last three days to the airline — or documentation that proves they have recovered from the disease — before boarding.
After landing, the CDC recommends they do a test three to five days later and remain home for seven days.
Robert Redfield, CDC director, said: “Testing does not eliminate all risk but when combined with a period of staying at home and everyday precautions like wearing masks and social distancing, it can make travel safer, healthier, and more responsible.”
The rule will go into effect on January 26.
Equities waver as Covid-19 crisis intensifies
FT reporters in London and New York
US stocks wavered on Tuesday, alongside global equities, as investors weighed the worsening coronavirus pandemic against the prospect of more fiscal stimulus in the world’s largest economy.
Wall Street’s benchmark S&P 500 index closed flat for the day, while the tech-heavy Nasdaq Composite notched gains of 0.3 per cent.
In Europe, stocks had a mixed session, with the region-wide Stoxx 600 closing up just 0.1 per cent. Germany’s Xetra Dax slipped by the same magnitude and London’s FTSE 100 dropped 0.7 per cent.
The performance of energy and financial stocks — which performed particularly badly in 2020 — were rare bright spots on both sides of the Atlantic, boosted by expectations that the sectors would benefit from more fiscal support and an economic rebound.
Juliette Cohen, a strategist at CPR Asset Management, said equities were “taking a breath” following strong gains at the start of the year.
She did not anticipate a correction, as equities would be supported by further fiscal stimulus in the US — which would encourage the sector rotation from growth stocks such as technology to value sectors including energy and financials.
Read more here
New York Mets ground to host ‘mega-vaccination’ site
George Russell in Hong Kong
The New York Mets baseball team will host a so-called “mega-vaccination site” — with the capacity to inoculate up to 7,000 people a day — at their home ground, officials said on Tuesday.
The Citi Field site in the Queens borough will be open 24 hours a day and be run by City Health + Hospitals, mayor Bill de Blasio told reporters.
“This is going to be fantastic,” he said. “This is going to help so many people to get vaccinated.”
He said eligible people including “75 and over, first responder, essential worker, educator, school staff, grocery store workers ... obviously, all the folks in the medical field” could make an appointment.
He said the Lower Manhattan vaccination site would open Tuesday, and others would follow.
Officials vow tight curbs on Australian Open
George Russell in Hong Kong
The Australian state of Victoria has pledged the tightest quarantine measures possible for the Australian Open tennis tournament in Melbourne, which begins on February 8.
State police minister Lisa Neville said on Tuesday the 128 players and their support staff would be allowed out for five hours a day for training “to reduce the risk of serious injury”.
Three hotels have been added to the Covid-19 quarantine programme to accommodate the Australian Open overseas contingent, Grand Hyatt, Pullman Albert Park and View Melbourne.
The first overseas players and staff are due to arrive on Thursday.
Ms Neville said additional staff have been brought on to manage the infection control needs of the tournament.
“This includes 615 resident support officers at hotels, 210 event support officers at the training sites, and 296 Covid marshals who will monitor players and support people as they are transported to and from quarantine hotels.”
The event, which attracted more than 800,000 spectators in 2020, is expected to be played in front of sharply reduced crowds this year.
“This year’s Australian Open will be unlike any other,” said Ms Neville. “We’ve left no stone unturned when it comes to keeping this event safe.”
Texas death toll surpasses 30,000
Peter Wells in New York
Texas has joined New York and California with a coronavirus death toll of more than 30,000, with authorities also revealing that hospitalisations had topped 14,000 for the first time.
The state’s health department attributed a further 286 deaths to coronavirus, up from 56 on Monday and about on par with the state's daily average over the past week.
A single-day record increase of 393 fatalities was reported on January 7. That took the overall death toll in Texas to 30,219.
Earlier on Tuesday, California’s health department revealed the state’s death toll hit 30,513 and had also surpassed the grim milestone of 30,000. Only New York has attributed more deaths to coronavirus during the pandemic.
The Lone Star State also passed another milestone, with the health department revealing the number of people currently in hospitals with coronavirus rose to a record 14,218 from 13,397 on Monday.
Counties reported a combined 22,110 new confirmed cases over the past 24 hours. That is the third-biggest one-day increase in infections on record, according to health department data.
In addition to those cases, authorities said 637 older cases stemming from commercial laboratories were also added to the overall state total, which sits at more than 1.75m and is about 1m infections shy of top-ranked California.
Philippines braces for new surge after celebration
George Russell in Hong Kong
The Philippines is bracing for a new surge in Covid-19 infections after thousands of people celebrated a religious festival last weekend in defiance of curbs on gatherings.
Tens of thousands of Roman Catholic pilgrims gathered in Manila on January 9 to pay homage to the Black Nazarene statue of Jesus Christ.
Known by its Spanish term, Traslacion, the annual procession in Manila normally attracts more than 1m devotees. Government and church leaders had asked worshippers to stay at home but many ignored the pleas.
Health undersecretary Maria Rosario Vergeire said on Tuesday that officials had already noticed a rise in the number of cases in the past four days, compared with the seven-day moving average during the holidays.
“This has to be interpreted cautiously,” she said. “During the holiday period, the laboratory output decreased by as much as 30 per cent so ... this might have some effect on the number of reported cases.”
Dr Vergeire said at least three weeks were needed to see if the Traslacion celebration had any impact on the number of Covid-19 cases.
On Tuesday, officials logged 1,524 new confirmed Covid-19 cases, which brought the overall national tally to 491,258.
US orders more Regeneron antibody cocktail doses
An employee takes a reading at the Regeneron lab in Tarrytown, New York
Hannah Kuchler in New York
The US government has ordered 1.25m additional doses of the Regeneron antibody cocktail, the manufacturer said on Tuesday.
The doses are being supplied under the Food and Drug Administration’s emergency use authorisation provisions.
Regeneron, a cocktail of casirivimab and imdevimab, is restricted to use on high-risk patients with mild to moderate Covid-19, in order to reduce the risk of progression to severe conditions necessitating hospitalisation.
Robert Kadlec, assistant secretary at the health department, said distribution would focus on areas of the country hardest hit by the pandemic.
“With Covid-19 cases continuing to rise, treating people with mild or moderate infections can help prevent hospitalisations, which will reduce the burden on healthcare systems,” he said.
Regeneron Pharmaceuticals, which makes the treatment, said the US would provide these doses at no cost to patients, although healthcare facilities may charge fees.
Regeneron, based in Tarrytown, north of New York City, has supplied 1.5m doses of the antibody cocktail.
Shares in Regeneron gained 2.8 per cent to $520 in after-hours trading.
Asia-Pacific stocks take a breather
Alice Woodhouse in Hong Kong
Asia-Pacific equities took a breather on Wednesday, following flat US stocks, as concerns over the economic impact of high case counts came up against expectations for more fiscal stimulus.
Japan’s Topix fell 0.2 per cent, the Kospi in South Korea was flat and the S&P/ASX 200 in Australia dipped 0.2 per cent
In the US on Tuesday, the S&P 500 closed flat and the tech-heavy Nasdaq Composite added 0.3 per cent.
Fears over the economic hit from high coronavirus infections were offset by expectations for stimulus by the incoming Biden administration.
S&P 500 futures were flat.
US looks to expand access to vaccines as rollout lags
Hannah Kuchler and Matthew Rocco in New York
The US government will release more Covid-19 doses that had been held in reserve and intends to cut the allotment of jabs to states that have not been administering them fast enough, as it tries to overcome a sluggish start to the distribution.
Alex Azar, health and human services secretary, accused some states of being “heavy handed” and micromanaging distribution, and urged them to open up vaccination to everyone over 65 and with underlying conditions that make them vulnerable to Covid-19, as is recommended under new guidance from the US Centers for Disease Control and Prevention.
So far, more than 25m doses have been distributed nationally but only 9m have been given, according to data from the CDC. The new stage of distribution will see shots given at mass vaccination sites and in retail pharmacies.
Read more here
Victoria sets date for Australian Grand Prix
George Russell in Hong Kong
Melbourne will host the Formula 1 Australian Grand Prix on November 21, the Victorian state government announced on Tuesday, after the pandemic delayed the race scheduled for March.
The four-day Grand Prix event would be “subject to prevailing public health conditions”, said sports minister Martin Pakula.
“The move means there will be a greater chance of welcoming fans from Victoria, interstate and around the world,” Mr Pakula said.
Quarantine and other aspects of the Grand Prix would “be considered in due course”, he added.
US daily death toll passes 4,000 for second time
Peter Wells in New York
The US on Tuesday reported more than 4,000 coronavirus fatalities in a single day for only the second time and as the death tolls in the country's two most populous states surpassed 30,000.
State authorities attributed a further 4,056 deaths to coronavirus, a daily tally second only to the 4,081 fatalities reported on January 7, according to Covid Tracking Project data.
Over the past week, 23,119 deaths in the US have been attributed to coronavirus, a record for a seven-day period and averaging out at about 3,303 a day.
The overall death toll for the US stands at over 371,000, more than any other country.
On Tuesday, the health departments of California and Texas, which rank first and second among US states by population, revealed their death tolls had surpassed 30,000, climbing to 30,513 and 30,219, respectively.
Only New York, with 32,007 fatalities — the majority of which occurred during the early stage of the pandemic — has more.
Chris McLaurin, a Walgreens pharmacist, jabs Lakandra McNealy, an aged-care home worker, with the Pfizer-BioNTech vaccine in Jackson, Mississippi
Arizona (335), Alabama (226), Mississippi (98) and Wyoming (33) reported record one-day increases in deaths.
The number of people currently in US hospitals with coronavirus ticked back above 130,000 for the first time in three days to 131,326.
On January 7, a record 132,464 people were reported to be in hospital.
Arizona, Georgia, South Carolina, Virginia and president-elect Joe Biden’s home state of Delaware reported record hospitalisations, as did Texas, which crossed the 14,000 threshold for the first time.
States reported a further 213,885 infections over the past 24 hours, according to CTP data, up from 193,857 on Monday and compared with an average over the past week of 244,519 cases a day.
India and China vaccine makers probe effects on variant
George Russell in Hong Kong
Pharmaceutical companies in India and China are investigating whether their vaccines are effective against a variant of SARS-CoV-2, the virus that causes Covid-19, rapidly circulating around the world, the magazine Nature reported on Tuesday.
Vaccines made by Beijing-based Sinovac and India’s Bharat Biotech are whole-virus vaccines that could perform better against new variants than those made around the virus’s spike protein, such as the Pfizer/BioNtech, Moderna and the University of Oxford/AstraZeneca products, Nature reported.
Nivedita Gupta, a virologist at the Indian Council of Medical Research, told Nature that scientists are testing whether antibodies found in the blood of people vaccinated with Covaxin, made by Bharat Biotech, are effective at blocking the B.1.1.7 variant that emerged in the UK and has reached India
The results are expected later this month, she said.
US-based Pfizer and Moderna have said they are testing mutations in the B.1.1.7 variant and in one that originated in South Africa, called 501Y.V2, to see whether they weaken the performance of their vaccines, Nature reported.
NBA cancels games due to Covid-19 protocols
George Russell in Hong Kong
The US National Basketball Association has postponed two games scheduled for Wednesday due to coronavirus-related reasons.
Because of testing and contact tracing within the Boston Celtics, the team does not have the required eight available players to proceed with the game against the Orlando Magic, the NBA said on Tuesday.
The Utah Jazz-Washington Wizards game was also postponed due to the Wizards falling short of players due to Covid-19 protocols.
South Korea sheds most jobs in more than 20 years
Song Jung-a in Seoul
South Korea lost the most jobs in December in more than two decades as business slashed hiring amid stronger social restrictions sparked by the resurgence of coronavirus.
The service sector bore the brunt of the job losses, Statistics Korea data showed.
The country shed 628,000 jobs in December, the most since February 1999 in the wake of the Asian financial crisis, according to the agency.
It also marked a tenth straight monthly drop. The country lost 218,000 jobs last year, the largest decline since 1998.
“For the whole year, the face-to-face service sectors suffered larger job losses and temporary workers, young adults and those in their 30s took a beating,” said Jeong Dong-myeong, a senior official at the agency.
Restaurants, hotels and retailers were hit hardest as the government curtailed business hours for most retailers while karaoke bars and clubs were closed to contain the latest wave of virus infections.
A man makes dumplings during a snowfall in Seoul on Tuesday
The jobless rate jumped to 4.1 per cent last month, the highest since January 2010 in the wake of the global financial crisis, with the youth unemployment rate hitting 8.1 per cent.
Finance minister Hong Nam-Ki on Wednesday expressed “deep” concerns about job losses and said the government will take additional measures if needed to support the job market.
Earlier this month, the government began to provide millions of small merchants with cash handouts worth Won4.6tn ($4.2bn) before the lunar new year holiday next month.
The Korean economy is slowly recovering on strong exports of technology products but the electronics boom is not broadening out to other sectors.
The job market outlook depends on how successfully health authorities can contain the latest virus outbreaks, economists said.
South Korea reported 562 new cases on Wednesday, raising the total caseload to 70,212, according to the Korea Disease Control and Prevention Agency.
Another 20 deaths were announced, increasing the national toll to 1,185.
UAE vaccinations top 1.25m people
George Russell in Hong Kong
The United Arab Emirates has vaccinated more than 1.25m of its 9.6m people, health officials said on Tuesday, giving it the second highest proportion of inoculated residents after Israel.
The Ministry of Health and Prevention said that 108,401 more people have received the China-made CoronaVac injections, bringing the total to 1,275,652.
UAE health authorities have launched a national campaign to encourage people to get vaccinated, especially the elderly, and those with chronic diseases.
Abu Dhabi Health Services Company, a private healthcare network, opened two vaccination centres in the emirate and one in adjacent Dubai.
The three centres have a combined daily capacity of 9,000 jabs, the ministry said.
Indonesia president vaccinated in national first
Indonesian president Joko Widodo receives the country’s first jab
George Russell in Hong Kong
Indonesian leader Joko Widodo on Wednesday received the country’s first Covid-19 vaccination at the presidential palace, local media reported.
The president, known as Jokowi, received the jab of the Chinese-made CoronaVac vaccine in his left arm, the Jakarta daily Kompas reported.
“It doesn’t hurt at all,” the president said at the vaccination, which was broadcast nationally. He then thanked the doctor who injected him.
Cabinet members will also be inoculated on Wednesday, Kompas said.
On Monday, Indonesia gave the CoronaVac vaccine, made by Beijing-based Sinovac Biotech, its first emergency use approval outside China.
Interim data from a late-stage clinical trial conducted in Indonesia showed its efficacy rate at 65.3 per cent, Kompas said.
About 1.48m health workers will be inoculated starting this week, the health ministry said.
More than 560,000 people are expected to be vaccinated in January, with the remainder getting the jab in February.
Mexico sets new daily fatalities record
Jude Webber in Mexico City
Mexico hit a new daily Covid-19 death record with 1,314 new fatalities confirmed on Tuesday.
Mexico City, one of the hardest hit areas, had 92 per cent of its general hospital beds occupied and 88 per cent of beds with ventilators were full, according to the health ministry.
Overall, Mexico confirmed 135,682 deaths and 1,556,028 cases, according to official data. Excess death figures, however, point to a far higher toll.
Despite the rising numbers, Mexican officials have given reassuring messages that the vaccine roll-out to all of the country’s 32 states can now begin.
Infections in a number of states are rising sharply and hospitalisations and intubations are at record levels.
Mexico has detected cases of the virulent B.1.1.7 strain that has ravaged the UK.
Earlier, Hugo López-Gatell, the deputy health minister and coronavirus tsar, defended Mexico’s policy of not closing itself to flights from countries infected with the strain.
“The new variant is a source of concern because it might be more transmissible, but that is still under debate,” he said.
“Mostly we think that no, strains or one strain that is constituted of more than 23 genetic mutations does not have a greater capacity to cause damage … we don’t need any control in particular,” he added.
Australian experts sceptical over Oxford vaccine
Jamie Smyth in Sydney
Australian scientists have called on the government to review its Covid-19 immunisation strategy over concerns that the University of Oxford/AstraZeneca vaccine was not effective enough to generate herd immunity.
Several immunologists and the opposition Labor party said on Wednesday that Canberra should seek additional supplies of the BioNTech/Pfizer and Moderna vaccines, which trials show have higher efficacy — a measure of prevention of infection or severe disease — than the Oxford/AstraZeneca product.
Some health experts are also advocating for a “pause” in the roll out of the Oxford-AstraZeneca vaccine next month. The proposal prompted a lively debate among scientists but has been rejected by Canberra.
“Until we get more data that shows that AstraZeneca is as good as the others, the scientific and medical risk that you take is that you won’t get herd immunity,” said Andrew Miller, president of the Australian Medical Association in Western Australia.
“The political risk is that you will get a good vaccine for the rich and a not so good vaccine for the poor”
Dr Miller said Canberra should halt the planned roll out of Oxford-AstraZeneca and source vaccines with the highest efficacy.
Australia has largely reined in the virus so, unlike the UK or US, it can wait and source the best vaccines available to build public confidence, said Dr Miller.
The country’s chief medical officer, Paul Kelly, defended the choice in a television interview on Wednesday.
“Now, AstraZeneca is one of the mainstays, if not the mainstay of the global response in terms of vaccination,” Dr Kelly told The Today Show. “AstraZeneca is, on the evidence we have so far, a safe and effective vaccine.”
ICU staff in England report mental health issues
Alice Woodhouse in Hong Kong
Almost half of healthcare staff working in English intensive care units during the pandemic have reported symptoms of post-traumatic stress disorder, anxiety or depression as the health crisis piles pressure on staff, according to a report.
Results of an anonymised online survey of healthcare professionals published in the journal Occupational Medicine, found 45 per cent reported symptoms consistent with a diagnosis for at least one mental health issue.
The survey found 40 per cent met the threshold for PTSD, 6 per cent appeared to have severe depression, with 11 per cent reporting symptoms related to severe anxiety and 7 per cent for problem drinking.
“[The] probable PTSD rate we report (40 per cent) was around nine times that found within the general population and more than double that found in recent combat veterans,” the study found.
High patient numbers, reduced nurse to patient ratios, ad-hoc ICU facilities, and staff sickness during the first surge of Covid-19 added to the existing stress on ICU staff, the study said.
Nursing staff were more likely to report higher levels of distress than doctors or other clinical staff, with 19 per cent reporting thoughts of self-harm or suicide.
“While further work is needed to better understand the real level of clinical need amongst ICU staff, these results indicate the need for a national strategy to protect the mental health, and decrease the risk of functional impairment, of ICU staff whilst they carry out their essential work during Covid-19,” the study concluded.
More than 700 people responded to the survey during June to July. Of those responses, 40 per cent were doctors, 49 per cent nurses while 10 per cent other healthcare staff.
Despite the challenges faced by ICU staff, 46 per cent reported “good wellbeing”.
China discourages travel in bid to curb outbreak
A man is given a nucleic acid test for Covid-19 in Shijiazhuang, Hebei province
Yuan Yang in Beijing
China has locked down three cities and asked residents of Beijing, Shanghai and Guangdong province not to leave for the annual Spring Festival holiday, enacting the widest controls the country has had since the initial Covid-19 outbreak last year.
About 23m residents of the northern cities of Shijiazhuang, Xingtai and Lanfang, in Hebei province neighbouring Beijing, are unable to leave their cities.
Last week, more than 10 local governments around the country asked residents not to travel unless it was “necessary”.
The lockdown measures are aimed at controlling the outbreak in Hebei.
The government is also concerned about transmission during the Spring Festival break, which would usually be the world’s largest annual mass migration, as city workers return to their family homes in the provinces.
Croydon bankruptcy offers cautionary tale
William Wallis in Lewes
An investment spree billed as an income generator to protect frontline services in a cash-strapped London borough has provided a cautionary tale about the perils of over-reach as local authorities across Britain face mounting financial and social pressures.
Twice in the past two months, the Labour-run council in Croydon, on London’s southern fringes, has issued a Section 114 notice — announcing de facto bankruptcy — after failing to fulfil a legal duty to balance its books.
It is the second council forced into this position — after Northamptonshire in 2018 — although local governments across England have struggled with dwindling financing, exacerbated by the pandemic.
Read more here
Russia plans to test Sputnik V vaccine on children
The Russian institute that developed the Sputnik V vaccine plans to seek permission to conduct trials on children, official media reported on Tuesday.
Gamaleya Scientific Research Institute of Epidemiology and Microbiology director Alexander Gintsburg told the Tass news agency that he hoped trials would begin in April or May.
He said trials on adults are not yet completed.
On Monday, Russia’s health ministry gave Gamaleya approval to begin clinical trials of Sputnik Light, a shorter-term vaccine that would be easier to make in large quantities.
Tass said 150 volunteers would take part in the trials.
Trust in governments slides as pandemic drags on
Andrew Edgecliffe-Johnson in New York
Governments have squandered the surge in public trust they saw early in the Covid-19 pandemic, imperilling their chances of persuading their populations to get vaccinated, according to a 28-country survey showing that scepticism of official guidance is growing around the world.
Governments from Canada to South Korea enjoyed a spike in public trust between last January and May, the 33,000-person Edelman Trust Barometer found, but most of this has since evaporated as the health and economic crises caused by the coronavirus worsened.
Businesses, non-governmental organisations and media outlets have also lost public confidence in most big markets, with China showing the steepest falls.
Read more here
Turkey to launch mass inoculation with CoronaVac
Shoppers wear masks in a busy street in Ankara on Tuesday
Turkish authorities plan to complete tests on the Chinese-made CoronaVac vaccine on Wednesday before a mass vaccination programme, state media reported.
Beijing-based Sinovac Biotech sent 3m doses to Turkey, which arrived on December 30, the Anadolu news agency reported on Tuesday.
The Turkish Medicines and Medical Devices Agency has been evaluating the vaccine since then, and it is expected to receive an emergency use authorisation as soon as Thursday.
Health care workers, people aged 65 and above, and adults living in crowded places such as shelters will be vaccinated first.
Citizens will have to make an online appointment to receive the jabs, administered in two doses with a 28-day interval.
Canada’s Couche-Tard in Carrefour takeover talks
Leila Abboud in Paris, Ortenca Aliaj in New York and Kaye Wiggins in London
Canadian convenience store group Alimentation Couche-Tard has approached France’s Carrefour about a takeover in a deal that would combine two retail groups jointly worth more than $50bn.
The talks were at an early stage, the companies said on Tuesday night in separate statements. The Canadian group, which has a market value of $37bn, has long grown through acquisitions.
In 2019, Couche-Tard sought to buy Caltex Australia in a $5.8bn deal but walked away last April as the coronavirus pandemic took hold.
Read more here
William Hill expects to suffer loss due to betting shop closures
William Hill, the UK bookmaker, has said that shop closures and lockdown restrictions caused a steep drop in revenues even as its online operations were boosted by an uptick in gamblers placing bets at home.
The group said on Wednesday that overall revenues for 2020 would be £1.3bn, 16 per cent below 2019, and that it expected a £30m loss due to the challenges of trading its 1,414 high street betting shops during the pandemic.
However, its online revenues increased 5 per cent in the UK and 12 per cent in its other markets after it launched the Swedish sportsbook Mr Green in two new regions. Similar to many rivals, William Hill has also benefited from an increase in online betting once sport returned with gamblers increasingly turned to betting apps to relieve lockdown boredom.
In November, the group's shareholders accepted a takeover offer for the company from the casino giant Caesar's Entertainment, its joint venture partner in the US, valuing it at £2.9bn.
William Hill said that it expected the deal to complete "possibly as early as March 2021" and that its net revenues from its US operations had increased by almost a third.
Ulrik Bengtsson, William Hill's chief executive, said that 2020 had been "a year like no other" and that the offer from Caesar's "recognises the substantial progress we have made as well as the opportunities and challenges ahead of us".
Lidl hauls in strong UK Christmas sales
UK sales at discounter Lidl rose 17.9 per cent in the four-weeks to December 27, beating its compatriot Aldi and capping a year of market share gains.
There was a notable 24.8 per cent increase in basket size at the German-owned company, helped by the recent launch of a loyalty app that offers incentives based on spending.
In common with other food retailers, it benefited from the closure of pubs and restaurants in many areas of the UK during December. And like peers, the company saw strong sales of its premium range, with "Deluxe" sales up 22 per cent in the year.
Christian Härtnagel, chief executive of Lidl in the UK, said the company remained committed to its expansion and investment plans. It has committed to open around 50 stores a year for the next few years.
While Aldi, whose Christmas sales rose 10.6 per cent, has experimented with grocery delivery and click-and-collect services this year, Lidl has remained purely a store-based operation.
Despite this, it has taken market share this year and on Kantar's latest figures it is now slightly larger than the Coop, with 6.1 per cent of the UK market.
Persimmon's weekly sales slow as stamp duty holiday effects wane
Property sales in the UK are showing signs of slowing down as the turbocharging effects of a government tax reprieve begin to wear off, according to one of the UK’s leading housebuilders.
Persimmon said on Wednesday that its weekly sales had settled to “more normalised level from the elevated rate seen over the summer months".
The company, in common with other housebuilders, had earlier seen a surge in sales on the back of the stamp duty holiday and the release of pent-up demand after restrictions on the housing market were lifted in May.
The increased demand meant Persimmon gained a forward sales pipeline of £1.7bn as of December 31, which is 25 per cent higher than at the same point a year earlier. The group generated 2020 revenue of £3.33bn, from £3.65bn a year earlier.
But a resurgence in coronavirus cases and changes to the government’s Help to Buy scheme, which will see regional price caps imposed and limit the scheme to first time buyers, have slowed down trade. The end of the stamp duty holiday in March is also likely to have an impact, said the company.
“Recent events have served to further demonstrate the continuing near term uncertainties arising from the Covid-19 pandemic,” said Dean Finch, the company’s chief executive. "However, we believe that the longer term fundamentals of the UK housing market remain resilient."
Pharma lobby warns against extending Covid jabs times
Donato Paolo Mancini
The pharmaceutical industry has warned against straying from tried-and-tested dosing intervals for Covid-19 vaccines, saying doing so risks public confidence in the shots.
The main pharmaceutical lobby groups in the US and Europe on Wednesday said they supported “adhering to the dosing that has been assessed in clinical trials” and that “emerging discussions regarding dosing strategies” may not be supported by drug labels or published data.
Any changes in dosing and inoculation schedules “should follow the science and be based on a transparent deliberation of the available data”, the International and European Federations of Pharmaceutical Manufacturers & Associations and US industry groups BIO and PhRMA said in a joint statement.
The UK has opted to extend the dosing regimen for the two approved vaccines it is currently deploying against coronavirus — those made by BioNTech/Pfizer and Oxford/AstraZeneca — to 12 weeks, igniting a fierce scientific debate and attracting criticism from manufacturers.
Other countries, including Germany and Denmark, have either opted for the same approach or expressed interest in pursuing it, though at a maximum of six weeks between the first and follow-up shot.
But US agencies have argued against spacing the doses out, with health secretary Alex Azar on Tuesday calling it “reckless” and the Food and Drug Administration warning it is “counter-productive”.
Read more here.
Asos UK sales up more than a third as rivals close stores
Online fashion retailer Asos expects full-year profit to be at the top end of market expectations, with the additional costs of coping with Covid-19 more than offset by savings in other areas, particularly in lower return rates.
Group sales rose 23 per cent to £1.3bn in the four months to December, with the UK showing particularly strong growth at 36 per cent as lockdowns forced store-based rivals such as Primark, H&M and Zara to close.
Nick Beighton, chief executive, said the company was maintaining a cautious outlook for the second half of its financial year, given that its customers, usually in their 20s, are disproportionately likely to suffer the economic effects of the pandemic.
“However, the strength of our performance gives us confidence in our continued progress towards capturing the global opportunity ahead,” he added.
Return rates have become more moderate as sales have switched from “going-out wear” to athleisure and casual clothing. This will lead to a £40m benefit in the first half of the year, the company said.
But it warned there would be a £15m full-year profit impact from tariffs on clothing imported from third countries into the UK and then re-exported to EU markets.
Just Eat's orders climb 57% on booming demand for home deliveries
Just Eat Takeaway.com benefited from the food delivery boom during Europe's lockdowns, saying that quarterly orders rose more than a half.
The Amsterdam-based group increased orders 57 per cent year-on-year in the fourth quarter to €179.8m. The total value of orders placed through its apps grew 64 per cent to €4bn, as restaurants and diners were forced to go online.
JET, which operates its online marketplace for local takeaway restaurants in the UK and Europe, Canada and Australia, said in Wednesday’s trading update that revenue rose more than 60 per cent compared with the same period a year ago, to between €720m-740m.
“The fourth quarter of 2020 marks our third consecutive quarter of order growth acceleration,” said Jitse Groen, chief executive of Just Eat Takeaway.com.
JET said that availability of hundreds of McDonald’s and Greggs outlets boosted its performance in the UK. It has also launched Scoober, its rival to Deliveroo and Uber Eats which offers restaurants access to a network of couriers if they do not already have their own delivery staff, in London and Paris. These deliveries still make up a minority of its total orders but grew 163 per cent to 55m.
The group's acquisition of US delivery app Grubhub has received shareholder and regulatory approvals and is on schedule to close in the first half of 2021, Just Eat said.
UK health secretary shuns specifying timeline to ease lockdown
Matt Hancock, the UK health secretary, sidestepped any suggestions of a public government commitment to a specific timeline to lift lockdown restrictions based on achieving the immunisation of the most vulnerable tranches of the population.
“I haven’t put a timescale on it,” said Mr Hancock on Sky News when questioned about easing restrictions on March 8, as mooted by some Conservative members of parliament.
The UK has given 2.3m people doses of coronavirus vaccines but it is aiming to vaccinate about 14m people by February 15, to cover the four main priority groups, including the over-70s, doctors and care workers.
That has prompted Tory MPs to call for easing of restrictions after a three-week lag that will give time to ensure Covid-19 immunisation is built up.
Mr Hancock clarified that the February 15 vaccination target meant that people would be offered a slot to receive a jab on or before that date, as opposed to simply receiving a letter of invitation by then.
Supply chain disruption forces UK Honda plant to close next week
Honda's Swindon plant will close for four days next week because of parts shortages, the latest disruption to hit the facility.
The company told employees on Wednesday that "some production activities will not run Monday 18 to Thursday 21 January due to Covid-related supply issues".
Honda's plant closure next week is due to the global shortage of semiconductors that has forced carmakers from Volkswagen to Nissan to cut production across the world.
The Japanese carmaker is reliant on deliveries of parts from its home market, which have been affected by shipping congestion related to the pandemic. It was forced to close for several days in December.
Several UK plants are currently closed, including BMW's Mini factory in Oxford, in planned maintenance shutdowns from Christmas.
Hancock highlights vaccine supplies as main challenge in UK rollout
Vaccine supplies will increase in the coming weeks, health secretary Matt Hancock said on Wednesday, as the government races to offer Covid-19 jabs to the UK's 14m most vulnerable people by February 15.
The NHS has the capacity to deliver vaccines across the country, but the “rate limiting factor” remains the supplies, Mr Hancock told BBC Radio 4’s Today programme.
“The challenge is that we need to get the supply in," he said. "The supply will increase over the next couple of weeks and that means that the very rapid rate that we are going at at the moment will continue to accelerate over the next couple of weeks.”
His comments follow reports that some doctors' surgeries have been told to stop administering the vaccine, as the government attempts to spread out the supply of vaccines evenly.
The health secretary added that overall deliveries were on track but added that the exact number of doses available each day is subject to change.
“We have got as much as we are expecting," he said. “So it is being delivered on track according to the supply schedules but the exact numbers per day and per week do move around because each batch has to be tested.”
Brompton pedals faster to keep up with soaring global bike demand
Demand for Brompton’s folding bicycles has outstripped its ability to supply a thriving cycling market around the world after a surge in new riders during the Covid-19 lockdown.
The bike maker will embark on an investment drive to meet soaring demand, according to Will Butler-Adams, Brompton’s managing director and major shareholder.
He said the 500-strong, London-based company would recruit more than 100 people this year as it increased production and invested in electric versions of the foldable bike much loved by commuters.
“We have decided we are going for it,” he told the Financial Times, outlining plans to increase sales in markets in the EU that he was confident would be unaffected by the UK leaving the European single market. “It's a once in a generation opportunity. We are recruiting like flipping mad.”
Turnover rose by more than a third in its 2020 financial year ending in March to £57m, according to accounts filed at Companies House on Tuesday, with pre-tax profits jumping by two-thirds to £6m.
Read more here.
European stocks steady as pandemic woes set up US stimulus hopes
European equity markets were muted on Wednesday as investors weighed the worsening coronavirus pandemic against prospects of more fiscal stimulus in the US.
The Stoxx 600 benchmark and the UK’s FTSE 100 were 0.2 per cent higher in early trading, following a similarly lacklustre session on Wall Street overnight.
This came after the Dutch government extended the Netherlands' coronavirus lockdown by three weeks and Chancellor Angela Merkel warned Germany’s strict measures may last at least another eight weeks.
The inoculation rollout has been slow in France, where an anti-vaccine movement is gaining ground, while Germany’s political parties are rowing over Berlin’s decision to delegate procurement of the shots to the European Commission.
US President-elect Joe Biden has pledged to press ahead with extra stimulus for the world’s biggest economy. Analysts at Goldman Sachs forecast he will add $750bn to a $900bn economic relief package agreed by US lawmakers late last year.
This has raised expectations of economic growth that could feed through to inflation, prompting a sell-off of US government bonds since the start of the year. Yields have reached their highest since March, in turn lifting the dollar.
But this so-called reflation trade struggled on Wednesday, with the yield on the 10-year US Treasury bond falling 0.02 percentage points to 1.12 per cent as investors bought back in to the debt. The dollar, as measured against a basket of currencies, was narrowly higher.
Japan extends Tokyo's state of emergency as infections rise
Robin Harding in Tokyo
Japan has extended its state of emergency from the Tokyo area to another seven prefectures covering the cities of Osaka, Kyoto, Kobe, Fukuoka and Nagoya as cases of Covid-19 continue to rise.
“In addition to the acceleration of infections in the Tokyo area at the end of last year, since the start of 2021 case numbers have increased rapidly in central Japan and the Kansai region, and I feel a strong sense of crisis,” said prime minister Yoshihide Suga.
“We judge that we need to take measures before the virus spreads from the large cities to the whole country,” Mr Suga said. Japan has been reporting about 6,000 new cases of Covid-19 every day, with a sharp acceleration since the start of the year.
Under the state of emergency, the public will be asked to work from home where possible and restaurants will be asked to close by 8pm. Japan’s government believes that eating and drinking in groups is the biggest cause of new cases and so targeting restaurants will be an effective way to slow down the spread of the disease.
Japan also announced a complete closure of the border to non-Japanese nationals, including business visitors from China and South Korea, who had been allowed in under a scheme to restart travel.
Prefectures covered by the state of emergency are Osaka, Hyogo, Kyoto, Aichi, Gifu, Fukuoka and Tochigi, in addition to Tokyo, Saitama, Chiba and Kanagawa where a declaration was already in force.
UK pension contributions fell as pandemic spread
Pension contributions by UK workers slumped by a tenth as the first wave of the pandemic spread, according to figures that for the first time expose the toll of the virus on retirement saving.
Employee contributions to newer-style "defined contribution" plans fell by 11 per cent from £1.7bn to £1.5bn between the first and second quarters of last year, according to new data from the Office for National Statistics.
At the same time, contributions made by employers to workers' DC pension plans fell 5 per cent from £3.9bn to £3.7bn.
The UK's first pandemic lockdown, which led to widespread business closures, was implemented in March and remained in place into the second quarter which began in April.
The data also showed that growth in membership of private sector DC workplace pension schemes slowed in the second quarter of last year with 23m members by the end of June 2020, the same number as at the end of March, compared with 22.4m at the end of September 2019.
The ONS said this “may be because of the impact of the coronavirus pandemic on the labour market", but it advised caution in interpreting the results.
“These figures show us that, unless economic fortunes reverse soon, the impact of the pandemic may not just be felt in the immediate term but also in decades to come, when today’s younger workers retire with potentially less than they need, because they were unable to contribute enough to a pension during their working lives, " said Becky O’Connor, head of pensions and savings with Interactive Investor, an investment platform provider.
"Even without the pandemic, the risk of retiring without enough to last is real for workers in today’s defined contribution schemes if they are only paying in the minimum amount.”
Irish factory surge boosts eurozone industrial output
Martin Arnold in Frankfurt
A major surge in Irish industrial production boosted overall factory output in the eurozone by 2.5 per cent in November, underlining how manufacturing continued to rebound late last year even after several countries tightened coronavirus restrictions.
Economists had only expected industrial production in the bloc to rise 0.2 per cent in November from the previous month. Most of the extra growth in eurozone industrial production was due to a 53 per cent surge in Ireland, according to data released by Eurostat on Wednesday.
Eurostat did not explain what caused the massive surge in Irish factory output, but it may have been related to stockpiling in preparation for the end of the Brexit transition period at the end of last year.
The higher-than-expected growth, which mostly came from increased capital goods production, meant that eurozone industrial production had rebounded to within only 0.6 per cent of its levels of a year ago in November.
More infectious coronavirus variants will emerge, disease expert predicts
Clive Cookson in London and Michael Pooler in São Paulo
Highly contagious new variants of coronavirus will emerge more frequently and spur further infection waves such as those threatening to overwhelm hospitals in the UK and South Africa, one of the world’s leading infectious disease experts has warned.
Salim Abdool Karim, chairman of South Africa’s Covid-19 ministerial advisory committee, also said it was too early to know the extent to which existing vaccines would provide immunity to the new variants.
Scientists around the world have been alarmed by the rapid spread of the new 501.v2 variant first detected in South Africa and the equally infectious B.1.1.7 variant that has led to a surge in cases in the UK. Other variants have emerged recently in Brazil and Japan.
Prof Abdool Karim, the epidemiologist who led South Africa’s fight against HIV/Aids, explained that viruses evolved as they infected people with partial immunity in order to escape recognition by their antibodies.
“We’re going to see this occur more commonly now than in 2020, as we vaccinate and as more people are infected,” he said in an interview with the Financial Times.
The epidemiological finding of increased transmissibility was supported by “biological evidence showing the 501.v2 variant binds more readily and more strongly to human cells”, added Prof Abdool Karim.
Read more here.
UK prime minister pledges 24/7 vaccine centres as soon as possible
Boris Johnson promised to open special vaccine centres that will operate 24 hours a day, seven days a week, “as soon as we can” in an attempt to hit the ambitious target of vaccinating 14m of the UK’s most vulnerable citizens by mid-February.
“We’ll be going to 24/7 as soon as we can,” the UK prime minister said on Wednesday during weekly questions in parliament. The health secretary will provide more details in due course, he added.
Matt Hancock said on BBC Breakfast earlier on Wednesday that the government was "absolutely up for doing that". However he cast doubts that setting up the round-the-clock centres would be a "major factor" in speeding up the vaccine campaign since "most people want to get vaccinated in the daytime".
Mr Johnson confirmed that 2.4m people had received 2.8m coronavirus jabs.
Opposition leader clashes with UK prime minister over rise in deaths
Keir Starmer attacked Boris Johnson for his Covid-19 policies at the weekly prime minister’s questions, blaming the UK government for the fact that 17,000 people had died with the virus in under a month.
Sir Keir, the opposition leader, said that the prime minister had – at the last PMQs on December 16 – insisted there was no need for a national lockdown or tighter Christmas restrictions.
“Since then, since that last PMQs, 17,000 people have died of Covid; 60,000 people have been admitted to hospital; and there's been over a million new cases,” the Labour party leader said. “How did the prime minister get it so wrong. And why was he so slow?”
But Mr Johnson said that it was not until two days later on December 18 that the government learnt about the new, more infectious, variant of the Covid-19 virus.
Sir Keir said that on December 16 it had been clear that the indicators had all been “in the wrong direction” and that previous measures had not been strong enough.
“The prime minister sat on his hands for over two weeks, we're now seeing in the daily figures, the tragic consequences of that delay,” he told the House of Commons.
Mr Johnson responded to say that he had put much of the country into the “much, much tougher measures” of Tier 4 before plunging the entire country in a national lockdown at the start of last week.
“I do recall that on the day that we went into a national lockdown and sadly we were obliged to to shut the schools, even on that day, the Labour party was advocating keeping schools open,” he said.
Sir Keir said it was “obvious” that stronger restrictions would be needed within days. Mr Johnson said he would not rule out stronger curbs if necessary – but said he must take account of the “serious damage” to mental health and livelihoods.
UK extends ban on mortgage repossessions
A UK ban on mortgage repossessions is being extended until the end of March to protect borrowers hit by the latest coronavirus lockdown - but cars and other goods bought on credit may once again be seized by lenders from February.
In an update to its Covid-19 support measures on Wednesday, the Financial Conduct Authority acknowledged that banks and other mortgage lenders would need to continue helping homeowners struggling with repayments when the current guidelines expire on January 31.
Previously, the regulator had said that lenders must not enforce repossessions before that date other than in exceptional circumstances, such as a homeowner wishing to hand back keys. It is now proposing that firms must not enforce repossessions before April 1.
The move “takes account of the worsening coronavirus situation and the government’s tighter coronavirus-related restrictions which mean that consumers could experience significant harm if forced to move home”, the FCA said. It also reflects government bans on tenant evictions in some countries that can prevent lenders from repossessing property.
However, previous guidance to lenders stopping them from terminating consumer credit agreements and repossessing goods or vehicles will not continue beyond the end of this month. Repossessions will be allowed to resume after January 31 if lenders comply with government health regulations on social distancing and shielding.
“Our proposed approach reflects the different risks and harms that customers with goods or vehicles on credit are likely to face compared to those who are at risk of losing their home,” the FCA explained.
Scotland tightens coronavirus restrictions
Mure Dickie in Edinburgh
Nicola Sturgeon, Scotland’s first minister, on Wednesday announced new restrictions on “click and collect” retail services and businesses offering takeaway food and drink, saying tougher action was needed to keep the new coronavirus variant under control.
The Covid-19 variant first detected in England last year now accounted for 60 per cent of new cases in Scotland, Ms Sturgeon told the Scottish parliament.
She said that under statutory guidance to take effect from Saturday, only retailers offering essential items such as food, clothes and books would be allowed to operate “click and collect services”. These retailers would have to offer such services outdoors and with staggered appointments, the first minister said.
Ms Sturgeon said takeaway food would now have to be offered from a “serving hatch or doorway” rather than indoors as currently permitted, and a legal ban would be imposed on drinking alcohol in public in most of Scotland.
Guidance would also be strengthened to make clear that employees should be supported by their employers to work at home “wherever possible”, she said.
Ms Sturgeon said tougher action was needed despite signs that the lockdown imposed on most of Scotland from December 26 was having an impact on new case numbers.
“We would not be doing any of this if we did not believe it essential to get and keep this potentially deadly virus under control,” she said. “Case numbers are still so high and the new variant so infectious that we must be as tough and effective as we possibly can be to stop it spreading.”
Target’s online sales double in strong holiday season
US retailer Target pulled further away from struggling rivals over the holiday shopping season, producing a 17.2 per cent year-on-year increase in like-for-like sales over November and December.
The chain, in common with Walmart and a handful of other “big box” retailers, has become a shopper favourite during the pandemic thanks in part to its mix of merchandise, including electronics and homewares as well as food and other essential items.
Sales at Target’s physical stores rose 4 per cent on a like-for-like basis as shoppers made more frequent visits, increasing footfall, and also spent more on average on each trip.
The company has also found success online. Ecommerce sales doubled over the period, helped by a “click and collect” service that allows consumers to pick up items from stores.
Target said it had taken market share across its five main merchandise categories. Its latest batch of strong sales figures stand in contrast to another round of weak results expected from department stores and mall-based retailers, whose problems have intensified during the coronavirus crisis.
Debenhams to shed 320 jobs as six stores will not reopen post lockdown
Debenhams’ flagship Oxford Street store in London is one of six that will not reopen once the latest Covid-19 restrictions are eased.
The department store group, which went into administration for a second time last year and is now being liquidated, will not reopen stores in Portsmouth, Staines, Harrogate, Weymouth and Worcester. Around 320 jobs will be lost as a result.
Administrators at FRP Advisory are “continuing to engage with a number of third parties regarding the sale of all or parts of the business” while planning for a wind-down of the business.
“While it remains our intention to reopen as many stores as possible to complete the stock liquidation," the administrators said, "the announcement of a renewed national lockdown last week means that a number of stores where we have been unable to agree lease extensions will be permanently closed."
Staff in Debenhams’ corporate headquarters, which it relocated to offices above the Oxford Street store in 2019, will continue to work from home “for the time being”. The company has another support centre in Taunton.
Restructuring experts consider it unlikely that the company will be sold as a single entity, with rivals instead looking to take over the best stores once the stock has been cleared.
Italy to extend state of emergency to end of April
Miles Johnson in Rome
Italy will extend its national state of emergency until the end of April in its attempt to halt the spread of the Covid-19 virus.
An extension of the state of emergency, which was put in place to give the government powers to act with greater speed to tackle the coronavirus outbreak, is necessary due to “a generalised worsening of the epidemic”, health minister Roberto Speranza said on Wednesday.
Italy, which last year was the first European country to suffer a severe coronavirus outbreak, has recorded 79,000 Covid-19 deaths, the region's second-highest number and the sixth-highest in the world.
The country is operating a tiered system of regional lockdowns, with the highest risk, or red, under the heaviest restrictions. Rome is expected to tighten national restrictions on Wednesday.
US consumer prices boosted by petrol demand
US consumer prices grew at their strongest pace in four months, boosted by a resurgence in the cost of fuel and food.
The consumer price index rose 0.4 per cent in December against the prior month, according to the US Bureau of Labor Statistics. But excluding the volatile food and energy sectors, consumer prices were up a more muted 0.1 per cent. Both measures matched economists’ forecasts.
Overall, consumer prices were up 1.4 per cent year on year, up from 1.2 per cent in November. The annual rise when excluding food and energy was unchanged at 1.6 per cent.
While annual growth remained modest, “strong base effects linked to the temporary collapse in prices in the early stages of the pandemic last year mean that headline and core inflation will surge above 2 per cent — and could even briefly hit 3 per cent — in the spring”, said Paul Ashworth, chief US economist at Capital Economics.
The benchmark 10-year Treasury yield rose back above 1 per cent last week for the first time since March, as investors bet on higher growth and inflation. The yield edged down on Wednesday by 0.02 percentage points to 1.12 per cent.
Prices for food advanced 0.4 per cent on a monthly basis, compared with a 0.1 per cent decline in November, as the cost of food consumed at home increased amid the return of coronavirus-related restrictions in parts of the country. Prices at restaurants and bars also climbed in a sign of higher costs for those businesses.
An 8.4 per cent rise in the cost of petrol – the biggest increase since June – led energy prices higher by 4 per cent. Prices for apparel and new vehicles also grew.
Ukraine to cut natural gas tariffs to ease coronavirus woes
Roman Olearchyk in Kyiv
Ukraine’s government plans to cut household natural gas tariffs by a third from February in its efforts to ease economic pain from the coronavirus pandemic and curb what officials describe as surging global prices and inflated pricing by regional suppliers owned by domestic oligarchs.
“Market prices are too high today, especially given the pandemic,” Ukrainian president Volodymyr Zelensky said on Wednesday as his government announced the decision.
“We as a state must protect our citizens in economic terms, too,” Mr Zelensky added.
The decision to re-introduce state regulation of gas prices during the pandemic threatens to open yet another sticking point with the IMF.
The fund last year froze disbursements from a $5bn lifeline, citing threats to independence and functionality of crucial anti-corruption institutions and the central bank.
Ukraine adopted gas reforms under prior IMF programmes, bringing gas prices to market levels and providing targeted subsidies for the poorest of consumers.
Prime Minister Denys Shmyhal accused “some regional gas companies” of selling natural gas to household consumers at excessive prices during peak winter demand.
He called upon parliament MPs to draft legislation to address market distortions and exploitation of consumers.
Mr Zelensky said Ukraine will “keep the reform” as he addressed concerns that the country was rolling back on gas market reform by reintroducing state-regulated gas tariffs.
“These changes are not a step backwards. These are the changes that every Ukrainian needs due to the difficult economic situation in which we found ourselves due to the pandemic,” he added.
Israeli data show BioNTech/Pfizer vaccine starts working within days
Mehul Srivastava in Tel Aviv
Infection rates amongst those who have received the first of a two-shot BioNTech/Pfizer vaccine dropped within days, initial data from Israel's Ministry of Health indicated.
With nearly 2m of it's 9m citizens having received their first jabs, and hundreds of thousands expected to receive their second within the next week, Israel has become a test-case for the speed with which countries can hope to tame the coronavirus pandemic.
Data from the ministry of health and from two of the four health maintenance organizations carrying out the vaccination drive showed that, compared to a control group of people who had yet to receive the vaccine, infection rates dropped by between a third and half about 10 or 12 days after the first jab.
The second shot, which is given 21 days after the first, is expected to boost that resistance to catching the virus to more than 90 per cent, and to lower the severity of Covid-19 if infected.
Israel's Clalit Health Services carried out a study which found that the infection rates dropped only after the 12th day after receiving the jab, but by as much as 40 per cent, according to Ron Balicer, the director of public health policy at the HMO.
Channel 12 News provided information from a different HMO, Maccabi Healthcare Services, that tracked a 60 per cent drop in infection rates, but only two weeks after the vaccine was administered.
The data provides some understanding of the efficacy of the BioNTech/Pfizer vaccine outside of medical trials, but also points to the risks of complacency in mask-wearing and social distancing after having only received the first shot.
Hundreds of Israelis have tested positive after receiving their first jab, and at least 17 per cent of those in hospital now had also received their initial shots.
Meanwhile, Israel's third national lockdown has yet to dent its figures for overall new infections - more than 7 per cent of those tested showed signs of infection, with 9,600 people identified as infected.
US clean energy struggles with ‘anaemic’ jobs recovery
Employment in the American clean energy sector ended 2020 at its lowest level in five years as jobs failed to quickly bounce back in the wake of pandemic-induced layoffs.
Despite the addition of almost 17,000 jobs in December, around 429,000 people previously employed by the sector remain out of work, according to an analysis by BW Research Partnership. Seventy per cent of the jobs lost have yet to be recovered.
The numbers provide a challenge for the incoming Biden administration, which has pledged a $2tn green stimulus package to bolster the sector and create jobs, though the full amount is unlikely to pass through Congress.
“December’s clean energy employment numbers can only be described as anaemic,” said Gregory Wetstone, chief executive of the American Council on Renewable Energy.
“We look forward to working with the incoming Biden administration and the new Congress to move past the endless cycle of temporary stopgap measures and finally enact the kind of comprehensive, long-term, scientifically-driven climate policy that puts millions to work.”
The hit to employment in the fossil fuel sector caused by the pandemic has been well documented, but the new figures suggest the clean energy sector is also continuing to struggle with the fallout.
At the current rate of recovery the sector will not reach pre-Covid levels of employment until 2023, according to BW.
Italy PM working on last-ditch plan to save government
Miles Johnson in Rome
Italy’s prime minster said he is attempting a last-minute truce with a small coalition partner that is threatening to bring down his government in the middle of a coronavirus induced economic recession and health crisis.
Giuseppe Conte said on Wednesday that he was working on a new “pact” with the small Italia Viva coalition member led by former Italian prime minister Matteo Renzi, who is threatening to withdraw his lawmakers from the current coalition.
Mr Conte warned that a government crisis would have large consequences for the country. “I believe that a crisis would not be understood by the country at a time when there are so many challenges," he said.
It remains unclear if Mr Renzi, who controls enough Italian senators to remove the current government’s majority in the country’s upper house, will stick with Mr Conte or not. Mr Renzi is expected to give a press conference on Wednesday early evening that will make his intentions clear.
Mr Renzi has blasted Mr Conte’s handling of Italy’s economic recovery plans and said earlier this month he was not afraid of walking away from the coalition.
When asked by a reporter on Wednesday if he would resign in the case of losing Mr Renzi’s lawmakers Mr Conte said: “I hope it does not come to this”.
US fuel demand remains weak
Derek Brower in London
US fuel demand over the past four weeks remained 6 per cent below its level last year, as the impact of the coronavirus hit on consumption last year dragged into 2021, according to a weekly report from the federal Energy Information Administration.
Motor gasoline for the same period remained about 11 per cent beneath last year's level, while jet fuel — which suffered more than other segments of petroleum demand during the lockdowns last year — was still 30 per cent lower.
US oil prices were flat after the EIA announcement, as a larger than expected draw from crude oil inventories — ordinarily a bullish signal — was offset by a sharp rise in gasoline stocks, emphasising persistent demand weakness among consumers.
US petroleum exports slumped to just 114,000 barrels a day. In its medium-term forecast yesterday, the EIA said the country would return to being a net petroleum importer for most of the next two years because of the fall in shale production following the price crash last year.
Turkey to begin vaccination programme on Thursday
Laura Pitel in Ankara
Turkey will begin its coronavirus vaccination programme tomorrow after approving China’s CoronaVac jab for emergency use.
Fahrettin Koca, the country’s health minister, received the first dose live on television and said that immunisation of health workers would start on Thursday.
The decision to go ahead with the adoption of the Chinese vaccine, developed by China’s Sinovac Biotech, comes after Brazil said this week that its trials had showed a disappointing overall efficacy rate of 50 per cent.
Turkish late-stage trials had deemed the vaccine to be 91.25 per cent effective. Indonesia, which this week became the first country outside China to approve the vaccine, found an efficacy rate of 65.3 per cent.
Turkey, like many emerging markets, has struggled to obtain sufficient amounts of vaccine to inoculate its population of 83m.
It has signed an agreement with Sinovac to buy 50m doses of CoronaVac but so far has only received 3m doses in a shipment that belatedly arrived in the country in the final days of December.
Ankara last month struck a deal to buy 4.5m doses of a vaccine produced by Germany’s BioNTech and the US company Pfizer. BioNTech founder Ugur Sahin told Turkey's state-run Anadolu news agency that he hoped that delivery would take place by the end of March.
US scientists discover two new coronavirus variants in Ohio
Researchers in the US have discovered two new variants of coronavirus, one of which they say became the dominant strain in the Ohio state capital Columbus within just three weeks.
Scientists at Ohio State University said on Wednesday they had discovered the new variants from patients in the state, warning the mutations could make the disease more easily spread from one person to another.
The findings add to concerns that the disease could be mutating in different ways across the world without public health bodies noticing.
One of the new variants discovered in Ohio had mutated in the same way as the strain which has spread rapidly through the UK in recent weeks, though researchers believed the mutation to have occurred in the US. The other was an entirely different mutation, which researchers said had become dominant in Columbus during a three-week period in late December 2020 and January.
UK records highest daily increase in Covid-19 deaths
John Burn-Murdoch and Naomi Rovnick
The UK has recorded the highest daily increase in its coronavirus death toll since the start of the pandemic.
The nation reported an additional 1,564 deaths within 28 days of a positive Covid-19 test.
More than 1,000 of the new deaths reported on Wednesday occurred over the prior four days, though some date back to the last week of December.
Wednesday was not the most deadly single day of the pandemic in Britain so far. That was April 8, when 1,072 people died from the virus in a 24-hour period.
The highest daily death toll of the current winter wave was January 7 when 847 Covid-19 patients died, though daily figures for recent weeks will continue to be revised upwards as more deaths are processed.
Another 47,525 cases of the virus were also recorded. This was the third day running that cases were below 50,000, although more than 7,400 deaths have been reported in the last seven days.
Across the UK, 614.8 people in every 100,000 have the virus, according to government data released on Wednesday.
The nation has been hit by a new strain of the virus that is more rapidly transmitted than earlier variants. The R number, which measures how many people an infected person will reinfect on average, is between 1 and 1.4, official figures showed.
Earlier on Wednesday, opposition leader Keir Starmer called for tougher lockdown measures.
The devolved administration in Scotland also tightened its lockdown measures, with new statutory guidance stating that takeaway food can only be served from a hatch and click and collect services will be limited to essential retailers. A legal ban will also be imposed on drinking alcohol in public in most of Scotland.
California reports second-highest daily increase in coronavirus deaths
Peter Wells in New York
California on Wednesday reported its second-highest daily increase in coronavirus deaths since the start of the pandemic, with back-to-back days of more than 500 fatalities.
Authorities attributed a further 589 deaths to coronavirus, up from 548 on Tuesday and second only to the record of 695 reported on January 9.
California and Texas on Tuesday became the only other states besides New York to have confirmed more than 30,000 coronavirus deaths since the start of the pandemic. On Wednesday, California's death toll stood at 31,102, second only to New York's 32,172 fatalities.
Over the past week, California has averaged 520 deaths a day, compared to about 172 a day in New York over the same period. If those trends were to continue, California could surpass New York within the next week as the state with the highest coronavirus death toll. The majority of New York's fatalities occurred during the early stage of the pandemic.
More encouraging is that coronavirus hospitalisations have shown signs of stalling, while new cases continue to remain below recent averages.
The number of people currently in California hospitals with coronavirus fell by a net 115 over the past 24 hours to 22,550. That remains below the record of 22,836 that was reported on Friday last week. The number of available intensive care unit beds decreased by 46 over the past day to 1,183, which is 36 more than a record low reported last Friday.
A further 33,751 cases of the virus were reported by California's health department, nearly 9,000 below the state's daily average over the past week.
The positivity rate over the past 14 days was 13.3 per cent, the health department revealed on Wednesday. That is down from 14 per cent on Saturday, which was the highest the positivity rate had been since April, according to state data.
Portugal imposes national lockdown as coronavirus cases soar
Peter Wise in Lisbon
Portugal is to impose a national lockdown from midnight on Thursday, requiring people to stay at home, shutting down most shops and services and enforcing remote working as hospitals struggle to cope with a record level of coronavirus infections.
António Costa, the prime minister, said the measures would largely mirror a six-week lockdown in March and April when Portugal “successfully halted the first wave” of the pandemic. He expected the tough new restrictions to remain in place for at least a month. In recent months, Portugal has been operating a tiered system of regional restrictions to combat the pandemic.
“We all know these confinement measures will have enormous economic costs for families and firms,” Mr Costa said. “But no price can be put on human life and the price we are paying in this pandemic is unbearable.”
Unlike Portugal’s previous national lockdown, however, all schools and universities will remain open. Scientists were divided on the issue, Mr Costa said, but the government had decided “not to sacrifice the current generation of students again”. He said home working would be compulsory whenever possible and enforced with heavy fines.
He announced the lockdown shortly after health officials reported 10,556 new coronavirus cases and 156 Covid-19 deaths in the previous 24 hours, the highest daily totals to date. Scientists briefing the government on Tuesday warned that new cases could reach 14,000 a day within two weeks if tougher restrictions were not implemented.
In a country of 10.2m people, the rapid spread of the virus over the past two weeks has increased the total number of cases since the beginning of the pandemic to more than half a million. The total number of deaths caused by the virus reached 8,236 on Wednesday.
Portugal recorded an average of 83 new coronavirus cases a day per 100,000 inhabitants over the past seven days, compared with 84 in the UK and 75 in the US. Virologists said they had identified “at least 72” cases in Portugal of the fast-spreading variant of the virus that was first detected in the UK.
US budget deficit swells on pandemic spending
Mamta Badkar in New York
The US budget deficit swelled to $573bn at the end of last year driven by a fiscal stimulus package aimed at helping households and businesses weather the impact of the coronavirus pandemic.
The deficit widened by 61 per cent from a year ago in the fiscal first quarter that runs through December, the Treasury said on Wednesday. That came as tax receipts totalled $803bn, down 0.3 per cent from the same period a year ago, while spending climbed 18 per cent to nearly $1.4tn driven by jobless benefits and social security.
In December, the deficit, or the shortfall between tax revenues and spending, swelled to $144bn, as receipts totaled $346bn and spending reached $490bn.
Government spending jumped last year after Congress approved a $2.2tn fiscal spending plan, including expanded jobless benefits and loans to small businesses, to cushion the blow to the US economy from the pandemic. Lawmakers approved a fresh $900bn stimulus late last month, though economists have cautioned that the new deal came too late to avoid a slowdown in the labour market and a reduction in consumer spending.
"The outlook for the deficit for the full fiscal year has changed significantly since
Democrats took control of the Senate," said Nancy Vanden Houten, economist at Oxford Economics. She estimates the gap will widen to $2.6tn if stimulus checks are boosted to $2,000 after president-elect Joe Biden takes office.
"The risk is for more stimulus and larger deficits once Democrats in Congress begin advancing Biden’s – and their own – fiscal policy agenda," she said.
More than a dozen US states have confirmed new Covid variant
Peter Wells in New York
More than a dozen US states have confirmed the presence of the fast-spreading variant of coronavirus that was first detected in the UK, with Wisconsin and New Mexico on Wednesday becoming the latest places to join the expanding list.
New Mexico's health department said this afternoon the affected person was a male in his 60s who was "associated with travel to the UK in December".
Wisconsin's health department did not detail how many cases of the new variant it had identified or whether they were related to travel.
That took the number of states to have confirmed cases of the variant to 13. According to data from the Centers for Disease Control and Prevention last updated on January 11, there were 72 cases of the variant in the US that had been identified in California, Colorado, Connecticut, Florida, Georgia, Indiana, Minnesota, New York, Pennsylvania and Texas.
Since the CDC's most recent update, Maryland confirmed its first case of the new strain. CDC data as of January 11 showed four cases in New York, but New York City Mayor Bill de Blasio said on Wednesday there were now 12 cases across the state, including two in New York City.
Earlier on Wednesday, scientists in Ohio said they have discovered two new variants of coronavirus, adding that one of those has become the dominant strain in the state's capital city, Columbus.
The B.1.1.7 was first detected in the UK late last year. Although it is believed to spread more rapidly, it is not thought to be more deadly than the original strain of coronavirus.
The first case of the B.1.1.7 strain in the US was reported on December 29 by Colorado.
Stocks edge up as investors eye stimulus prospects and worsening pandemic
Naomi Rovnick, David Sheppard and Joe Rennison
Global equity markets inched higher on Wednesday as investors weighed the worsening coronavirus pandemic against prospects of more fiscal stimulus in the US.
On Wall Street the blue-chip S&P 500 index rose 0.2 per cent by the New York afternoon while the technology-focused Nasdaq Composite climbed 0.4 per cent. Bourses were also subdued in Europe, where the German Dax closed up 0.1 per cent and the French Cac 40 finished 0.2 per cent higher.
Expectations of further economic stimulus once Joe Biden enters the White House are being balanced against the latest signs of a growing pandemic threat.
The government of Netherlands has extended the nation’s coronavirus lockdown by three weeks and Germany's chancellor Angela Merkel warned that her country’s strict measures may last another eight to 10 weeks. Japan has declared a “soft” state of emergency in and around Tokyo, while three cities in China’s Hebei province have been locked down.
“We are in the middle of a pandemic that does not have any end in sight,” said Tihana Ibrahimpasic, multi-asset specialist at the fund manager Janus Henderson. “Investors are balancing supportive US fiscal policy and coronavirus vaccines with these further lockdowns, and a cloudy outlook of how quickly the vaccines can be distributed.”
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More than 10m Americans get first dose of coronavirus vaccine
The US has administered at least one dose of a coronavirus vaccine to more than 10m Americans, as health officials push to ramp up what has been a slower rollout of the shot than hoped.
The number of people who have begun the vaccination process jumped to 10.3m on Wednesday from 9.3m the day before, according to the Centers for Disease Control and Prevention. The agency also said 29.3m doses have been distributed as of Wednesday morning.
The figures do not specify how many Americans have received their second shot. The vaccines made by BioNTech/Pfizer and Moderna, which have been authorised on an emergency basis by federal regulators, require two shots to be fully inoculated.
The Trump administration has urged governors this week to accelerate vaccinations, with the CDC updating its guidance to advise that states expand eligibility to people over 65 and younger Americans who have a comorbidity. Alex Azar, the US health secretary, told ABC News on Tuesday that the “administration in the states has been too narrowly focused”. The federal government also said states should release all available doses rather than hold back some supply for second shots.
South Carolina, Georgia and Alabama are the only states that have yet to vaccinate at least 2,000 people per 100,000 residents, although all three are nearing that milestone. West Virginia leads all 50 states with 6,177 people per 100,000 having received their first dose. North Dakota, South Dakota and Alaska have each eclipsed a rate of 5,000 initial shots per 100,000.
J&J's single-dose vaccine trial shows lasting antibody response
Hannah Kuchler in New York
Johnson & Johnson’s single dose Covid-19 vaccine elicited an immune response in trial participants that lasted for more than two months after injection, according to a paper published in the New England Journal of Medicine.
The participants still had neutralising antibodies to the Sars-Cov-2 virus at least 71 days after the shot. The paper also showed the most common side effects, such as fatigue, headache, and injection site pain, were short lived, as with most vaccinations.
J&J expects to report data from its phase 3 trial towards the end of the month. If the data show the vaccine is safe and efficacious, it would be the first pharmaceutical company to apply for an emergency use authorisation for a single dose Covid-19 vaccine.
Moncef Slaoui, who devised the Operation Warp Speed vaccination investment strategy, said on Wednesday that it is “very important” to have a one dose vaccine. “What people need to realise is that in real life, a very large percentage of people [who have] the first dose, will not get their second,” he told the JPMorgan healthcare conference.
Nordstrom on track for quarterly profit despite weak holiday sales
US department store chain Nordstrom said it was on track to eke out a quarterly profit despite a sharp decline in holiday season sales, the latest sign the 120-year-old retailer can survive turmoil in the sector that has tipped several rivals into bankruptcy.
The Seattle-based company, which has almost 360 stores across North America, has been hard hit by the pandemic and in an update on Wednesday Nordstrom said net sales over the nine weeks to the start of January fell 22 per cent from a year ago.
Nevertheless, the chain said it expected to deliver positive earnings before interest and taxes in the fourth quarter. An upmarket customer demographic has helped Nordstrom’s bottom line hold up better than harder-hit rivals, and the company has found success online. Ecommerce sales accounted for more than half the group total over the holiday season compared with about a third the same period a year ago.
Shares in Nordstrom have approximately tripled since November on hopes it can be one of the few operators to cope with the developing crisis in the sector, which prompted operators including Neiman Marcus and Lord & Taylor to file for Chapter 11 bankruptcy last year. The shares fell 2.9 per cent in after-hours trading.
Texas reports biggest daily increase in coronavirus deaths
Peter Wells in New York
Texas on Wednesday reported more than 400 coronavirus deaths for the first time and one of its biggest daily increases in new cases on record.
A further 405 fatalities were attributed to coronavirus, the health department revealed. That surpassed the previous record of 393 deaths that were reported on January 7, putting aside days that included catch-up effects or one-off revisions.
That took the death toll in Texas to 30,624, which ranks third in the US behind New York and California. Both California and Texas, the two most populous states in the US, revealed on Tuesday that their death tolls had passed 30,000.
A further 22,270 new confirmed cases were reported by authorities, up from 22,110 on Tuesday. The latest figure was the third-biggest number of new infections reported in a single day, behind about 27,000 reported on December 29 and about 26,500 on January 5, according to health department data.
An additional 290 historical cases, stemming from older tests reported by laboratories, were added to the state total, which is almost 1.8m, second only to California.
The number of people in Texas hospitals with coronavirus eased by a net 112 patients over the past 24 hours to 14,106, having jumped above 14,000 for the first time a day earlier.
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