Weekly Summary - 29th January 2021

February 3, 2021

What happened in the news this week?

UK’s Grim Pandemic Milestone

Sadly, the UK hit a grim milestone in its battle against the Coronavirus this week. The death toll now stands at over 100,000 and looks set to far exceed that while hospital admissions remain stubbornly high. Hospital admissions is one of the key metrics the government uses when deciding whether it is possible to ease lockdown restrictions. It is widely believed that hospital admissions are high as patients are staying in hospital longer with Covid as treatment is more effective than in the first wave. However, with higher admissions rates, death toll figures will always be set rise too.

Vaccine Wars

The UK and EU entered into a vaccine war with the EU claiming that they would stop exports of vaccines to the UK in reaction to the shortfall of AstraZeneca vaccines the Bloc was receiving. The EU looked to implement a little known clause in the withdrawal agreement that would allow them to place export checks at the Northern Ireland border. While they quickly reversed their decision, tensions between the newly divorced sides were running high. The EU is far behind the UK when it comes to vaccinations numbers. All of the Member states signed up to the EU’s vaccination programme - hoping to be able to get better access to vaccines en mass. However, the UK signed contracts to buy vaccines with several different manufacturers far earlier than the EU did.

What to keep an eye on in the future

Travel Restriction Impact

The UK implemented its strongest travel restrictions yet with those returning from certain countries required to quarantine in a hotel - at the traveller’s cost. There was worry that the UK Government would implement this strategy for all travellers coming into the country. Such countries that do require travellers to quarantine at a hotel include South Africa or Brazil where new variants are creating concern at how deadly and how quickly the mutation can be transmitted. The impact on both the economics of the situation and controlling the virus are yet to be seen.

GameStop and Hedge Funds

There was some unusual activity on the stock market this week. The stock for GameStop - an ailing bricks and mortar games shop - skyrocketed. It had ended the year costing just $20 a share. At its peak last week, it hit $350. The reason for the huge surge in the price is understood to be down to amateur investors who share trading tips and strategies on platforms such as Reddit. The strategy with GameStop was to rise up against powerful Hedge Funds who look to short sell stocks - GameStop being just one of them. By forcing the price higher, amateur investors will have caused huge losses at Hedge Funds who were banking on the share price falling to make their money.

Rachel Lee
Having worked at Morgan Stanley and BNYMellon for over 10 years in pensions and investments, Rachel now works as a full-time business and financial writer.

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