‘Plague Island’ Britain will soon pull free of the COVID quagmire
Once British care home residents and the over-80s are vaccinated, two thirds of potential COVID-19 deaths will be covered. That will come into view within 10 days.
The figures have been crunched by Yifei Gong and Stuart McDonald from the COVID 19 Actuaries Response Group, based on analysis of death certificates. It validates the UK government strategy of break-neck speed vaccination, rather than the European precautionary policy.
Some 88 per cent of avoidable deaths will be covered by the time Britain reaches the mid-February target of 13 million vaccinations, in principle saving 55,600 lives. Whether the efficacy rate of the Oxford-AstraZeneca jab is 70 per cent or 80 per cent is a distraction. Not a single volunteer in the group’s clinical trials died or became critically ill from COVID. For all intents and purposes the vaccine has 100 per cent efficacy against mortality. Personally, I would be equally happy to receive any jab approved by the MHRA.
We are about to go through a lacerating phase where the headline picture keeps getting worse. The death toll will keep rising mechanically into late January as a result of infections dating back to December – when, let us not forget, the UK Education Secretary was forcing schools to stay open even in zones where cases were spiralling.
Yet at the same time the underlying picture will be improving very quickly. My guess is that the atmosphere will change dramatically at the beginning of February as it becomes clear that early vaccinations are progressively pulling down the mortality ratio.
Behind the scenes, the policy debate has already moved on the exit strategy, just as planners switched their focus in early 1943 after El Alamein and Stalingrad to what the world would be like after the defeat of fascism. The exit is what now matters for markets.
Eliminators versus suppressors
The new conflict is between those pushing for eradication and those arguing that the greater public good is to end coercive restrictions and open up the economy as soon as we reach tolerable levels of immunity.
It is a clash within countries and between them. Simon Powell and Michael Chiang, from Jefferies, say the world is splitting into two camps: “eliminators” in East Asia, Australia, New Zealand; “suppressors” in the Americas, Europe, and above all the UK, which will embrace freedom sooner.
Acceptance for social repression will drain away in the West “when mortalities from COVID-19 start to resemble influenza in a typical year”. The zero tolerance states will in a sense be trapped by their own pristine status and absolutist rhetoric, though it is an enviable problem to have.
The same split is going on internally within the UK. But there comes a point when zero-risk does more harm than good. You cannot keep nations shut once 88 per cent of potential deaths have been averted. It is even harder to justify doing so once the figure rises to 97 per cent, which should be the case by early March. At that point you really are talking about a health dictatorship.
So when should we dial down the restrictions? Time-lag effects pull in opposite directions. Trial data show that protection is largely gained within 10 days of the first jab. On the other hand, it will take a couple of weeks for infections to pick up again after this lockdown. All told, the UK Government’s plan to start opening up in the middle of February looks well-calibrated.
My guess is that the atmosphere will change dramatically at the beginning of February as it becomes clear that early vaccinations are progressively pulling down the mortality ratio.
Hedge funds and investors will pull this moment forward as soon as the “second derivative” starts to turn, which is probably from now onwards, although they will first want a better sense of whether the NHS is going to topple over and whether the Johnson government can withstand the political trauma of the next month.
Assuming that the worst is averted, prepare for a surge of pent-up investment and a robust rally in sterling. The drama over exploding cases of the B117 variant has obscured the more relevant market story of an early, fast and extremely successful rollout of the vaccine.
The UK has gained a potential lead of two months over Europe. The EU’s painfully slow start and its shortage of future doses almost guarantee rolling lockdowns and curfews deep into the spring. Most EU governments are still in denial about this. They are putting off the inevitable, just as Britain did before Christmas.
Snapshot in time
Public approval for the handling of the pandemic has fallen sharply in almost every state – except Italy, an unexpected paragon of efficiency. If a view takes hold that leaders have badly botched the vaccination strategy on top of everything else, this mood will become mutinous.
Public debt levels are already in the red zone in Greece, Italy, Portugal, Spain, France and Belgium, but so is private debt in some of these countries. It has exploded to near 350 per cent of GDP in France. The cost of letting this pandemic run for an extra quarter due to incompetence is likely to be exorbitant.
It is hard to be exact about timing because Brussels has been stonewalling about its vaccine strategy and the delivery schedule of doses. It is a surreal situation. Far from offering answers, European Commission President Ursula von der Leyen has opened an inquiry into member states – above all Germany – for violations of a “legally binding” accord by all 27 members not to order extra vaccines on the side. Berlin is in the dock for trying to secure adequate doses of its own home-grown BioNTech vaccine in order to save the lives of its own citizens. If you want to undermine German political consent for the European Project, you could hardly find a better way.
We do not yet know exactly how bad the vaccine shortage in Europe is going to be. Denmark is already running low after its fast start, and has decided to delay the second BioNTech jab to six weeks. Others are following.
For now the UK is Plague Island and attention is riveted on the harrowing ordeal of its health system. But that is a snapshot in time. The shape of British and European politics may look very different in a month.
The Daily Telegraph, London
Most Viewed in Business
Source: Thanks smh.com