UK ‘through Covid by Spring’ but economic benefits are ‘months away’
The UK will be through the coronavirus pandemic by Spring, Matt Hancock said this morning, following news the Pfizer/BioNTech has been approved for distribution in the UK.
Health minister Matt Hancock has said the UK will be ‘through this by Spring’, but despite the optimism, analysts have predicted there will not be an immediate boost to the economy, with the economic benefits of the vaccine still months away.
The Pfizer/BioNTech vaccine was approved for use in the UK this morning, with roll out planned for early next week, becoming the first Western country to approve a vaccine.
Speaking on Good Morning Britain this morning Hancock described the news as “the dawn of the horizon, it’s lifting all the gloom once we can get it out.”
Hancock also confirmed he will be having a Covid-19 vaccine when it is made available to him, despite having already had the coronavirus, and that those who have had Covid-19 will be eligible and encouraged to take the vaccine.
GMB presenter Piers Morgan offered to take the vaccine on live TV next week along with Hancock in the hope it persuaded those more sceptical about taking the vaccine to have the jabs.
Hancock said if such a situation was “approved” he was happy to join Morgan for the injection.
Economic benefits ‘months away’
Although the Pfizer/BioNTech vaccine will be made available to the first cohort of people early next week, social distancing and mask wearing will have to continue for the foreseeable future.
During interviews this morning Hancock insisted the UK must not now weaken its resolve against the virus.
Despite the positive news the FTSE opened in the red. London’s premier index was down 0.1 per cent as markets opened, with the FTSE 250 of mid-cap firms down 0.5 per cent, though stirling rallied, which was in part because of a Times Radio report yesterday that Brexit negotiations have entered the final and crucial stage.
According to Michael Hewson, chief market analyst at CMC Markets UK, the lack of market reactions suggested the news was widely expected, and that the real challenge lies in the production, as well as the speed of any roll out.
“Ultimately even if a vaccination program was to start this month, the fact that two jabs are required means that it’s likely to be several months before we start to see a possible economic benefit in terms of an easing of restrictions, given that medical staff, along with more vulnerable people are likely to be the first to benefit, with the general population at the back of the queue,” he said.
The Pfizer/BioNTech vaccine will require two jabs to be effective, and the UK has ordered 40 million doses – enough for just under a third of the population.
The difficulty with this particular vaccine is that it needs to be stored at minus 70 degrees, making roll out more challenging.
The UK is waiting to hear from the health regulator about the Astrazeneca-Oxford vaccine. Hancock said this morning the health regulator had been working on that vaccine in parallel to Pfizer/BioNTech, and that it does not require the minus 70 degree storage, making roll out easier.
UBS Global Wealth Management UK CIO Caroline Simmons said the roll out of the virus will inject a “dose of optimism” into both domestic and global markets.
“The news further substantiates our expectation for a wide-scale roll out of a successful vaccine in the first half of 2021, and we believe global output and corporate earnings are on course to return to pre-pandemic highs by the end of 2021,” she added.
Meanwhile PwC chairman Kevin Ellis said said the prospect of a vaccine rollout, combined with Christmas activity, may support consumer spending in the short term, and meant employers could plan for a post-Covid world.
“The economy will recover, but won’t look exactly the same and people will need help with the transition,” he said.
“Vaccine progress has given employers the chance to plan what the world after Covid looks like, rather than simply managing through. For instance, the shape of the workforce – the skills needed and where, and the reality of blended working.
“There’s been a marked shift in gear. People are talking about staff get-togethers and conferences – things that have been absent from the business lexicon for months.”