Bullish Brussels improves EU growth forecast

Updates on the economic impact of the coronavirus

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Covid cases and vaccinations

Total global cases: 184.1 m

Total doses administered: 3.3 billion

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A series of reports today highlighted the uneven nature of the economic recovery and the permanent scars the pandemic can leave behind.

Thanks to an accelerated vaccination program, the EU is expected to experience its fastest economic growth since 1976, according to new forecasts from the European Commission. After contracting 6% last year, Brussels said the bloc would rise 4.8% this year and 4.5% next year. This means that real GDP could reach pre-crisis levels in the last quarter of this year, much earlier than expected just a few months ago.

In contrast, the economic recovery in the United Kingdom appears to be faltering. Britons spent less in shops, bars and restaurants in June as Covid-19 infections began to rise, according to a series of unofficial “high frequency” indicators. Ministers hope the fanfare of the removal of remaining pandemic restrictions slated for July 19 will give the stimulus another boost, but the health secretary admitted the country would be in “uncharted territory”.

The link between vaccinations and economic progress was underscored by the FT editorial board, which urged G20 finance ministers and central bankers meeting in Venice this week to recognize that no one was safe all the time. not everyone was safe. “Failure to embark on a plan to end the pandemic by vaccinating all adults in the world, like the one that cost the IMF $ 50 billion, is unacceptable but also doomed to failure,” he maintained.

Separately, an OECD report pointed out that however fast the economic recovery takes, some structural changes could be here to stay. The organization said the pandemic not only destroyed the jobs of 22 million workers in rich countries – with labor markets not recovering until the end of next year – but could also lead to a skills mismatch between those who are unemployed and the jobs available, with a consequent increase in long-term unemployment.

“A widening gap may widen between those who weathered the crisis through reduced hours and short periods of temporary layoffs and those who found themselves out of work – further and further removed from the workforce, draining rights. to benefits and risking long-term scarring, ”the OECD said.

Mondial economy

french president Emmanuel Macron plans to revive controversial pension reforms as part of its post-pandemic economic strategy, even as the country’s recovery remains fragile and threatened by new coronavirus infections. According to 2018 OECD data, the average effective retirement age for French men was 60.8 years, against 64.7 years for the United Kingdom, 64 years for Germany, 63, 3 years for Italy and 62.1 years for Spain.

Tom Mitchell in our Trade Secrets newsletter compares Singaporesuccessful reopening with that of China, where less effective vaccines mean removal of restrictions is much slower. register here to get trade secrets straight to your inbox every day.

the australian government has appealed to big companies to help it with its flawed vaccination program, which leaves the country vulnerable to the spread of the Delta strain of the coronavirus. The initiatives include Qantas’ plans to give frequent flyer bonus points to vaccinated customers.

Line graph showing immunization doses administered

Company

South Korea Samsung, the world’s largest maker of memory chips, smartphones and electronic displays, said its quarterly profits could peak in three years as the global semiconductor shortage drives demand higher. Car manufacturer Jaguar Land Rover meanwhile, halved its sales forecast due to the shortfall. German automakers are also suffering.

Areas that depend on physical contact such as shopping, dining, and aviation might have a much harder time finding Assurance in the future, according to an EU regulator. The pandemic had exposed “potential new sources of correlated defaults across industries,” resulting in a major shift in the way commercial credit insurers assess risk and the prospect of less coverage in those industries.

A report by the UK’s National Audit Office highlighted “unusual” pressure from the government on the Department of Business to allow Green capital, the now collapsed supply chain finance company, to become an approved Covid-19 loan lender. Watch our film on the lobbying scandal involving the company and former Prime Minister David Cameron.

Video: Greensill: A Story of Pride, Hype and Greed

Markets

Investors are eagerly awaiting the publication later today of the minutes of the US Federal Reserve ‘s recent policy meeting, looking for clues as to when the Fed may start cutting its emergency bond buying program. Data from the service sector raised concerns yesterday about slowing US economic growth.

Oil price peaked in three years yesterday as disagreement over production targets between OPEC members Saudi Arabia and the United Arab Emirates escalated. Read our explainer on why the cartel is in turmoil. Shell said this morning that high oil prices had helped reduce its debt, meaning shareholders could be rewarded when the results are announced at the end of this month.

Covid-19 has turned traditional economic theory upside down, writes Lena Komileva, chief economist of G + Economics. The pandemic has accelerated changes in supply chains, the labor market and public finances, while pushing up inflation. The effects of these forces will long outlast emergency measures by governments and central banks, she argues.

The essentials

Details of England’s plan to ‘live with Covid’

  • Passage to stage 4 of the government’s roadmap on July 19
    Barring a dramatic deterioration in the data, most of the legal restrictions on Covid-19 will end in England on July 19. Prime Minister to unveil final decision on July 12

  • Removal of advice on “working from home”
    From July 19, it will be up to employers to work with staff to agree on a return to work.

  • Wearing a mask is no longer a legal obligation
    Wearing a mask will be a matter of personal discretion, but some companies, such as transport operators, may require their use.

  • End of social distancing rules
    The one-meter-plus social distancing rule, which made it difficult to operate pubs, restaurants and entertainment venues, must be dropped

  • All remaining closed businesses will reopen
    Latest trade restrictions must be removed as nightclubs are added to the list of venues that can reopen

  • Covid-19 certificates will not be a legal obligation
    Vaccine passports won’t be required for home use, but organizers of some large events may choose to ask customers for proof of vaccination or a negative coronavirus test to reassure them of safety.

  • Travel abroad will be liberalized
    Ministers are expected to make plans soon to allow travelers from England who have received two injections of a Covid-19 vaccine to travel to Amber List countries without having to self-quarantine upon their return

  • End of the school “bubble” system
    The disruptive self-isolation of large groups of students will be replaced

Have your say

Ignorant Comments on Digital Nomads: The Reality of Running a Business from Anywhere:

I lasted five years. I threw in the towel when I realized my life was never going to progress. I also found most of the other β€œnomads” insufferable and they probably thought the same of me. Locals don’t like you because you stare at them outside of their hometown as well.

I have now found myself in the UK in a lovely little town by the sea. I have come to realize that I love standing on the ground and helping my local community more than galloping around the world. I would only suggest the lifestyle to people in their mid-twenties who are independent from their employer.

Final thought

I wish I had been there: During lockdown, we asked you where you dreamed of returning once the travel restrictions are lifted. From the banks of the Ganges to the Alps of northern Japan, here are some of your answers.

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