The UK was the first country in the world to authorise and start administering the Pfizer/BioNTech vaccine on 8 December, and at the time of writing is on track to immunise 15 million people by 15 February, focusing on most vulnerable groups and their carers. Following research suggesting that one dose of the Pfizer vaccine offers two-thirds protection against Covid-19, the UK’s strategy focused on offering vaccines doses up to three months apart in order to immunise more people with at least a first dose to start lifting the UK’s third national lockdown, which has been in place since 4 January and has compounded the economic damage already done by the country’s deepest recession in more than 300 years.
Chart of the month: Cumulative vaccination doses administered in UK, Israel, US and European Union (Cumulative doses administered per 100 residents)
Source: Financial Times, Our World in Data, national sources, Blend Network
Politics & Economics
- The EU’s economy contracted by 6.8% in 2020. Germany’s GDP shrank by 5%, France’s by 8.3% and Spain’s by 11%, the worst economic performance for all three countries since WWII. The EU’s annual inflation rate jumped to 0.9% in January, ending five months of deflation. With activity curtailed by lockdown, the rise in consumer prices reflected factors such as higher shipping costs and a revision to the index’s weightings.
- The US’s economy contracted by 3.5% in 2020, although it is growing again at a faster rate than expected. According to the Congressional Budget Office, GDP will roughly return to pre-pandemic levels by middle of this year, even without any more stimulus. But the economy, will lag its potential until 2025, keeping employment subdued.
- The UK formally submitted a request to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a free-trade agreement among 11 countries, which include Australia, Canada, Japan and Mexico.
- Taking markets by surprise, Jeff Bezos said he would stand down as Amazon’s CEO later this year and become executive chairman. The new CEO will be Andy Jassy, who heads Amazon’s cloud-computing division, the most profitable part of the company.
- Quarterly sales at Amazon and Google’s parent company, Alphabet, surpassed expectations in Q4 2020. Amazon’s quarterly sales passed $125bn for the first time while Alphabet’s advertising sales jumped by more than a fifth year on year in Q4.
- Alibaba undertook a round of dollar bond sales with the aim of raising a reported $5bn, after the Chinese e-commerce giant exceeded quarterly sales forecasts.
- January 2021 saw UK annual house price growth slow down for the first time in six months. According to the Nationwide House Price Index, annual house price growth slowed to 6.4% year-on-year, down from a 7.3% six-year high in December 2020.
- Following a spell of volatility in which the S&P500 had its worst week since October, stock markets calmed down in early February. However, investors remained nervous about the co-ordinated action of a group of retail traders to drive up some share prices which hedge funds were betting would fall, leading to losses worth billions of dollars.
FX & Commodities
- The effect of lower oil prices throughout 2020 was laid bare in the annual earnings of oil and gas companies announced in early February. ExxonMobil and Shell each recorded annual net losses of around $22bn last year. BP’s loss, its first in a decade, was $20.3bn and Chevron saw its second-weakest year for revenues since 2000.
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