Economic Commentary – Aug 2020

August 12th, 2020, by Chris Davis

It’s lonely out in space

After the enforced inactivity of the spring there are signs of an economic recovery as lockdown measures are lifted and social distancing relaxed. These measures have also allowed the Coronavirus to re-emerge. The number of confirmed virus cases globally is now above 19 million, with the number of deaths over 700,000.

In the UK it appears that the actions appear to be working, with the number of daily new cases continuing to fall despite localised ‘flare ups’. The Office of National Statistics data shows that Covid-19 deaths have decreased for the 14th week in a row. This is not the case in the rest of the world. Towards the end of the month an increasing number of Covid-19 cases in many European countries has led to fears that we may be entering a ‘second wave’ of the pandemic. While it is right that governments continue to act with heightened vigilance, they are in a far better place to deal with any future spikes than was the case earlier in the year. Improved test and trace capabilities, a better understanding of how to manage the disease therapeutically, and the shielding of those at highest risk should all help mitigate any flare-up of the disease.

Over the last month infections appear to back on the rise in most areas with Latin America the current epicentre, contributing to almost half of all deaths each day. Brazil are reporting over 50,000 cases a day. India is another area of concern with more than 62,500 cases being recorded each day. The number of recorded cases in the US grew by 77% in July increasing to 4.64 million from 2.64 million at the end of June. While US case levels remain elevated, there does appear to be some flattening of new cases in some of the most severely affected states. Progress in developing a vaccine continues, with positive news released from several clinical studies during the month.

Chris Davis,
Chief Investment Officer

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