Immediate consumer boom in the US and UK

All conditions appear to be in place to see a rise in the second and third quarters.


© Keystone

The United States, at the behest of each of its states, has now begun to relax health measures for a few weeks. Joe Biden’s recent announcements, raising vaccination targets and predicting that every adult will be vaccinated in early May are more than encouraging. Soon, aid funds provided under the broader fiscal incentive scheme will be collected by US consumers, who, in addition, still hold a large portion of last year’s stimulus payments – a coveted “piggy bank” – equivalent to one year of extra income.

Source: PMO Global Asset Management and Bloomberg 19 March 2021

The British vaccine campaign is also in full swing and consumers are accumulating consumption savings as well. The easing of health measures began very cautiously earlier this month and the plan for the UK is to remove almost all restrictions by June 21, so the British boom will be stronger than elsewhere. -Atlantic. In fact, the country is ahead of the United States in vaccine use and restrictions have long been tight.

Source: PMO Global Asset Management and Bloomberg 19 March 2021

Avoiding a Vaccine Trade War

This boom is only possible if the vaccine continues in the UK at the current rate. A vaccine trade war could have the opposite effect. Not only is it about the AstraZeneca vaccine, it has attracted very harsh criticism. The Pfizer vaccine is manufactured in Belgium, and the supply chain for the Moderna and NovaVox vaccines includes the EU. However, last week’s meeting of the Council of Europe ended in unison, with several countries opposing the protectionist position adopted by the European Commission, this time having difficulty confronting a vaccination campaign. For now, disruptions in supply chains appear to be limited, and the UK is expected to reassign only normal-sized vaccines to Europe. But nothing is less, because the United States has taken urgent steps to control its exports. The European Union hopes to receive 10 million doses of AstraZeneca vaccine, which has not yet been approved for use in the United States. They have not arrived yet.

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The British government therefore expects the vaccination rate to fall in April, but the goal of widespread vaccination by the end of July is not in question. The difference with Europe is that only 10% of the population is vaccinated and hospital admissions are increasing again. As a result control measures are strengthened and the recession continues in the eurozone. An increase in vaccine supply in the second quarter will help ease tensions with the UK. But the EU’s delay is obvious and the risk of allowing a significant number of unsuspecting suspects to continue to spread and transmit the virus is real.

The world economy will continue to recover

As the year progresses, higher doses of the vaccine will help control the virus. We will have booster shots this fall, which are designed to beat multiple genres.

All of this indicates that the world economy will continue to recover. Inflation is expected to increase as disruptions from production to services spread. Restructuring flows have supported bond yields for the past two weeks. That support ends this week, with bond yields expected to increase in the UK and US in April.

The UK stock market is still largely undervalued by international investors and we should see foreign buying as the economy recovers. It’s the national degrees that should benefit the most.

Harrison Matthews

 "Evil musicaholic. Web fanatic. Communicator. Twitter practitioner. Travel lover. Food advocate."

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