Markets were staggered Monday as dour news out of the UK undercut risk sentiment and easily overwhelmed whatever incremental bid for risk may have accompanied the finalization of a US stimulus package.
The new strain of COVID-19 currently marauding through England spawned a veritable deluge of travel restrictions just hours after Boris Johnson effectively canceled Christmas due to the mutated virus variant.
Unfortunately, this comes as the UK ponders a messy divorce from the EU. As Bloomberg ominously noted, new developments “offer Britain a preview of the border chaos to come in the absence of a Brexit deal.” The AP detailed the “chaos” as follows:
France, Germany, Italy, the Netherlands, Belgium, Austria, Ireland and Bulgaria all announced restrictions on UK travel. France banned all travel from the UK for 48 hours from midnight Sunday, including trucks carrying freight through the tunnel under the English Channel or from the port of Dover on England’s south coast. Eurostar passenger trains from London to Paris, Brussels and Amsterdam were also halted. Germany said all flights coming from Britain, except cargo flights, were no longer allowed to land. Belgian Prime Minister Alexander De Croo said he was issuing a flight ban for 24 hours [and] Canada announced its own ban Sunday night [as] Prime Minister Justin Trudeau said in a statement that for 72 hours, “all flights from the UK will be prohibited from entering Canada.”
Israel issued a similar flight ban. Even El Salvador said it would deny entry to those who may have been in Britain at any time during the past month.
Needless to say, this did not sit well with European equities, nor with the pound, which plunged more than 2%.
“Once you layer Brexit on to this chaos and now the closure of Dover, I can’t see how we can avoid some disruption in the supply of perishables,” Rabobank’s Jane Foley told Bloomberg, hinting at a food crisis in the UK.
Foley elaborated in a note to clients. “Recently, disruption at the UK’s Felixstowe port due to a huge increase in traffic caused by Brexit related stockpiling and Christmas shopping had increased the pressure on Dover, with some ships destined for the UK being unloading in other European ports,” she wrote, adding that “this has meant that queues of lorries have been building on the approach to Dover for weeks.”
While Johnson called an emergency meeting to “discuss the risk of upheaval,” Foley went on to caution that “with the end of the Brexit transition phase looming, the crisis may worsen in the coming weeks [and] there is also some suggestion in the press that deliveries of the vaccine could be affected.”
This is not what the UK needed in the final days of Brexit talks. One imagines this increases the sense of urgency. Failure against this backdrop could be highly destabilizing, to put it mildly.
James Withers, CEO of the Scotland Food & Drink industry group, didn’t mince words. “This is the nightmare before Christmas,” he said.
I hope Nigel Farage has stocked up on olives.
You bet he has.
He will also probably not suffer from the consequences of his political “work”.
That’s for the peasant class.
It will never, ever cease to amaze me how such a kind of collective insanity as the whole “Brexit” desaster found that many supporters in Great Britain.
btw I just took a look at the website of the Scotland Food & Drink group, they have a recovery plan called “Recovering from Coronavirus and fuelling Brexit preparation”.
At least the British can still take a nice vacation in Florida even if the rest of europe is off limits.
Well, I hope everyone is doing their background reading on this new critter (B.1.1.7 variant). See e.g., virological.org, “Preliminary Genomic Characterization….”. The new variant is distinctive because it sprung forth with more mutations (17) than have ever been seen before in one genetic step with this virus. Researchers speculate that this happened because it was accidentally “manufactured” by evolution within a chronically ill Covid patient. The chronically ill naturally see a diverse set of simple mutants arise within their bodies as the virus reproduces, with errors, for some months. When these patients are treated with convalescent plasma (someone’s antibodies) or remdesivir, it applies evolutionary selection pressure – we kill off the known variants, leaving behind a bunch of single-change mutants, and these surviving virus particles are then more likely to co-infect cells and engage in genetic recombination to create a new variant with multiple mutations, as may have happened here.
So, the new variant was sequenced in September, presumably from a chronically ill patient infected in, say, June or July. Think about the increase in a metric that measures the person-days of existence of chronically-ill Covid patients world-wide as we’ve rolled out antibody, plasma, and other life-saving treatments over the course of the pandemic. This metric measures the size of the “covid gene lab” currently running. The metric correlates to the probability that we’re creating other new variants like B.1.1.7 with bulk mutations that could have exciting new properties. We’ve always known Covid patients were potential labs for natural mutations, but now we’ve got a much better lab, and lots of ’em. Yay!
To me, it means that mandatory vaccinations just moved up from “would be nice, if it weren’t politically impossible” to “we darn well better, while we still can”. Also raises questions about how to treat chronically ill Covid patients, if this line of speculation proves true.
Could this be why Pfizer’s CEO sold 60% of his stock on the vaccine announcement? Corporate America is rotten to the core.
I am sorry, but ‘food crisis’ is sensationalist hyperbole. The shortage of certain food items that may be caused by the port issue is a ‘food inconvenience’. Having a shortage of food in the country generally… that is a crisis. I am not aware of anyone claiming this. The closest the UK comes to a ‘food crisis’ is the sharp rise in the use of food banks… but this is not a food supply issue.
You only need so many to think there will be a panic to have a panic. My UK friends are stocking up. What about yours?
None have mentioned it. The only thing that is mentioned is how the Christmas plans are screwed up.
The press really likes to stir things up, despite the panic amongst UK ministers the vaccine deliveries will not be impacted by the port closures. The UK government already stated that vaccines would be transported by air, if needed. I suspect that the government’s new lockdown rules were deemed justifiable by the new strain, i.e. it allowed the cabinet to go back on their previous promise regarding families being able to mix over the Christmas period. The new strain of this virus has already been reported in Europe, so I cannot fathom why the rest of Europe reacted in this way and I can’t help feeling that these are Brexit reprisals. The UK government’s announcement also lead to massive congestion at London train stations making it an ideal scenario to spread the virus.