UK Plans to Lift Lockdown, Sterling Stays Uplifted
22 Feb 2021 · 3rd Party Analysis
- UK’s Boris Johnson to unveil exit plan
- Sterling remains near multi-year highs
The Fight Against the Virus
On Monday, British Prime Minister Boris Johnson is expected to present the government’s lockdown exit plan and the gradual lifting of restrictions from the beginning of March. The UK has recently registered a steady decline of coronavirus infections, which has spurred hopes for schools reopening as soon as early March. PM Johnson will later today lay out the road map, which envisions a mass return to school on March 8, followed by the reopening of the larger part of the economy by the summer.
The daily number of confirmed cases has been falling from 3% to 6% per day and the hospitalization rate is also marking a significant drop. The UK managed to roll out the vaccination program quicker than the rest of Europe and by now, more than a third of the adult population has gotten the first dose. Boris Johnson stated that the government’s plan to lift the lockdown must be “cautious but irreversible”. The proposals set to be released later today will most likely keep shops and restaurants in the waiting line, while schools and limited social gatherings will be offered as a trade-off.
With school set to open on March 8, Mr. Johnson will propose the gathering of two families or groups of up to six people to meet outdoors three weeks later. According to UK officials, the lockdown exit plan will consist of four stages that gradually relax the rules governing almost every part of daily life. Starting with schools reopening, at the same time, two individuals will be allowed to meet outdoors. School sports and activity clubs are set to resume alongside schools. Starting Easter, six people or two households, can meet outside. Sports will be allowed by the end of March.
A Gradual Return to Normality
The second stage should start in early April and is expected to allow the reopening of non-essential shops, restaurants, and overall outdoor hospitality. Until that point, the government will continue to urge people to stay at home and work from home while international travel should be kept to a minimum.
“Our priority has always been getting children back into school, which we know is crucial for their education as well as their mental and physical wellbeing, and we will also be prioritizing ways for people to reunite with loved ones safely,” Boris Johnson said. He pledged to reassess the exit plan at every stage by keeping “cautious about this approach so that we do not undo the progress we have achieved so far”.
In addition to the unveiling of the proposals, PM Johnson is expected to present new research and data that shows the effect of the coronavirus vaccine on community transmission. This is a key factor that allows Mr. Johnson to pursue a more optimistic timetable for relaunching the economy.
As the UK is moving towards reopening, the sterling remains well bid in the early trading hours of Monday. Market participants have been keeping the pound steady above $1.40, its highest level since April 2018. The UK currency is also trading higher against the Japanese yen, hovering above 148.00. The sterling reached a new high against the Swiss franc earlier today, peaking over 1.2590, trading at a one-year top