COVID-19: Britain marks a year since first national lockdown

  • March 23rd marks the one-year anniversary of the UK’s first national lockdown
  • UK government introduce new coronavirus laws on holidaying and protests
  • Britons caught attempting to travel overseas illegally face GBP 5K fine
  • UK-EU COVID-19 vaccine spat weighing on pound Sterling (GBP) exchange rates

March 23rd marks a year since UK Prime Minister Boris Johnson announced the first national lockdown in England.

In a televised address to the nation this morning, Mr Johnson said that the past 12 months have been “one of the most difficult in our country’s history” and urged the public to use today as an opportunity to reflect on the pandemic.

He praised Britons for playing their part in the fight against COVID-19 – frontline workers, those working painstakingly hard to develop vaccines, parents homeschooling children and the rest of the population for following “stay at home” orders.

While the UK now appears to be turning the tide on COVID-19, no-one imagined that more than 126,000 people would’ve died at the hands of the virus or that we’d still be under lockdown rules a year later.

In honour of the lives lost, a one-minute silence was held at noon across the UK. Touching tributes are also being paid to those taken by COVID-19. London’s skyline is expected to turn yellow at nightfall with light displays from the London Eye, Trafalgar Square, Tottenham Hotspur and Wembley Stadiums.

UK Prime Minister Boris Johnson has also encouraged Britons to stand on their doorsteps from 8PM with phones, candles and torches to signify a “beacon of remembrance”.

With the first stage of Mr Johnson’s lockdown exit roadmap underway, many hope the third lockdown will be the last.

However, Guardian columnist Polly Toynbee believes there is too much optimism about post-COVID Britain when the infection rate in EU countries is surging exponentially.

While the number of COVID cases, hospitalisations and deaths are declining, and more than 50% of Britain’s adult population has received at least one dose of a COVID vaccine, she warns that the likelihood of the country escaping another surge in cases is unlikely.

Coronavirus cases in Europe

EU’s third COVID wave threatens UK’s post-COVID outlook

An exponential surge in COVID-19 cases across the EU has forced several member states, including France, Italy and Poland, to reimpose lockdown restrictions recently.

The spike in cases has become a concern for the UK government, which is also engaged in a diplomatic offensive to prevent the bloc from withholding vaccine exports to Britain.

To prevent the fresh surge in cases from crossing the British border and reversing hard-won vaccine success, ministers unveiled new coronavirus laws today, including a GBP 5K fine for any person caught attempting to take an illegal overseas holiday.

According to the new legislation on COVID restrictions, only those with a valid reason for travel will be permitted to travel. While international travel for holidaying is already banned, the GBP 5K punishment is a new measure.

Despite the ban on mass gatherings, under new coronavirus laws, protests in England will also be permitted.

That said, only protests “organised by a business, a charitable, benevolent or philanthropic institution, a public body or a political body” will be officially authorised.

Organisers will also need to ensure that the “required precautions concerning the gathering” are being followed, for example, social distancing and mask-wearing.

Several MPs signed a letter which stated that criminalising people for participating in demonstrations “is not acceptable and is arguably not lawful”.

The decision to exempt protests comes after a peaceful “Kill the Bill” rally in Bristol descended into chaos, leaving twenty police officers injured and one with a collapsed lung.

Ministers will deliver their vote on the new coronavirus laws on Thursday, which, if approved, would come into effect on March 29th and remain in place until June 30th.

Britons summer holiday plans

UK Health Secretary Matt Hancock says rules on overseas holidays could be lifted early

Health Secretary Matt Hancock told the public that ministers would likely lift COVID restrictions on international travel before June-end.

He said that the Global Travel Taskforce report, scheduled for April 12th, could suggest that travel is safe to restart earlier than June 30th, albeit he admitted that May 17th is the earliest date from which ministers would consider allowing holidaying abroad.

Mr Hancock also insisted that the UK government is introducing new coronavirus rules to “protect the progress we’ve made in Britain”  as the third wave in Europe poses a real threat to the country’s declining infection rate.

With the UK is facing a two-week vaccine delay with a delivery batch from India and the European Union threatening to block COVID-19 vaccine exports to Britain after botching its vaccination drive, downside risks are increasing for investors.

COVID vaccine rollout

Vaccine fiasco weighing on pound Sterling exchange rates

Pound Sterling (GBP) has shed ground to the euro (EUR) and the US dollar (USD) on Tuesday, with the latter seeming to benefit enormously from the vaccine spat between the EU and the UK.

At the time of writing, the British pound to euro (GBP/EUR) exchange rate is trading flat at EUR 1.1604, while the British pound to US dollar (GBP/USD) pair has tumbled by 0.5% to USD 1.3787.

The UK’s vaccination programme has been a critical driver of pound Sterling (GBP) upside over the past few months. However, it seems investors are now pricing the risk of a vaccine shortage in the UK following the EU’s vaccine export threat.

Although the bloc’s laggard vaccine rollout weighs on the euro (EUR), post-Brexit tensions are also contributing to weakness in GBP/EUR and GBP/USD.

Crédit Agricole FX Strategist, David Forrester, said: “any further escalation of the UK-EU post-Brexit tensions or concerns about potential disruptions to the UK’s vaccine rollout will warrant a more cautious outlook on GBP, especially vs the USD.”

But while the US dollar (USD) is tipped to advance further by foreign exchange (FX) analysts, BK Asset Management Currency Analyst Kathy Lien said, “now is not the time to buy EUR.”

Eurozone’s recovery outlook continues to darken, and its COVID-19 scenario is not expected to improve quickly, given that it is still facing an uphill battle with vaccines and coronavirus cases are surging across the continent.

Until the bloc’s economic outlook improves, investors are likely to remain cautious on the single currency as slow growth could prompt more aggressive policy from the European Central Bank (ECB).

Even any positive economic figures out of the EU could have limited impact, given that several member states have reintroduced lockdown restrictions and the bloc’s largest economy, Germany, will enter a draconian lockdown for four weeks in April.

However, with risk appetite fading, the British pound (GBP) is outperforming high-beta currencies such as the Australian dollar (AUD) and New Zealand dollar (NZD).

The New Zealand dollar (NZD) plummeted against all its trading currency rivals on Tuesday following news that the NZ government has introduced an abundance of measures to tackle rising house prices.

The news diminished hopes of a rate rise from the Reserve Bank of New Zealand (RBNZ), and as a result, support for the “Kiwi” currency has waned.

At the time of writing, the British pound to New Zealand dollar (GBP/NZD) exchange rate has surged by 0.9% to NZD 1.962 – a new three month high.

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