The World In A Week – A Tiered Wall Of Worry

COVID-19 weighed on sentiment, with cases globally increasing throughout the week. In Europe, figures jumped by more than 625,000, which meant new restrictions were implemented in the UK, France, Germany, Spain and the Netherlands. A worrying trend was also observed in Germany and Italy, who had previously managed to avoid a second wave of contaminations, saw an acceleration in such cases. The US also did not go unscathed, figures spiked to their highest level since July, with a recording of 350,000 in weekly cases.

As a result of a jump in cases, we expect fourth quarter growth will be subdued. Despite this, the International Monetary Fund (IMF) has revised its global growth forecasts higher for 2020, noting a better-than-expected rebound in post-lockdown activity. However, while growth has been revised upwards for 2020, the IMF has cut their outlook for 2021 citing the impact of persistent and reinforced social distancing measures.

Brexit negotiations continue to show little sign of progress, as neither the UK nor the EU is prepared to compromise. Planned discussions for the week ahead have been downgraded to a phone call, as No. 10 felt there was ‘no point’ in continuing if the EU is not prepared to discuss detailed legal text of a partnership. Fishing rights and state help for businesses is the latest bone of contention and has caused negotiations to falter. Moody’s has downgraded the UK’s credit status on the back of falling economic strength, as a direct result of the coronavirus pandemic and uncertainty over Brexit. We expect Brexit negotiations to feature heavily in the week ahead.

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All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete.  Unless otherwise specified all information is produced as of 19th October 2020.