COVID-19 complacency or recovery? 

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COVID concerns are headed for a revisit of the all-time lows we saw in late April and early May this year. Despite lingering concerns about case rates, lack of mask wearing, long-term vaccine efficacy, the elderly and the NHS, personal and family concerns are down by 14% and 23%, respectively. Is this a sign of complacency which can lead to more trouble? 
 
 

Personal life as normal ahead of winter – but what about work life? 

 
While holidays abroad may need to wait until next summer, UK pension professionals are now comfortable seeing family in person, attending family gatherings, travelling within the UK and meeting friends. Going to the pub now only brings slight concern. 
 
However, our COVID research panel are holding off on work-related in-person activities, such as seeing colleagues, holding meetings or attending events, until at least December. In fact, many do not expect to return to office work until February next year. 
 
 
But attitudes towards in-person business activities is changing. The proportion of those working from home is at an all-time low of 57% since we started tracking work trends in July last year. The proportion of those spending some time in the office or at least commuting for meetings is slowly starting to increase. Additionally, 80% of our COVID research panel is now ‘somewhat’ to ‘very’ comfortable attending in-person events – another all-time high. 
 
 
 
So, while COVID case rates remain high, the expected duration of the outbreak has decreased – with many hoping we would be out of the woods by summer of 2022. 
 
 

New reasons for criticism at Whitehall  

 
Even though there is still some dissatisfaction with the UK government’s pandemic guidance, only 7% of UK pension professionals are ‘very’ or ‘extremely’ worried about it. In fact, attention has shifted to other areas, with some calling Boris Johnson’s performance at the Tory Party conference ‘shocking’. Policy is needed to address supply chain squeezes, demand concerns and inflation fears – but are Whitehall up to the task? 
 
 

Economic consequences still unknown – and likely compounded by Brexit 

 
Despite COVID concerns decreasing and a sense of normality being restored to people’s lives, UK pension professionals think that the pandemic’s impact on covenants and the economy remains largely unknown. To begin with, the ‘Brexit dividend’ is still an illusion, and the country is likely facing labour and talent shortages that will add to existing problems with supply chains. It doesn’t help that inflationary fears are at an all-time high, with all members of our COVID research panel now expecting inflation to rise near term. 
 
 
While the minimum expected duration of the macroeconomic consequences of COVID-19 has decreased by 21%, it is unlikely the economy will be back to normal levels of activity before the end of 2023. 
 
 
 

Demand concerns reflected in sector sentiment 

 
Pandemic lockdowns generated pent-up demand – many people were able to save up as social and spending occasions were limited during most of 2020. However, our COVID research panel now worries these savings may already be spent on home improvement, tech upgrades, local holidays, but also just to make ends meet. With government support removed, where is consumer demand going to come from? 
 
This concern is reflected in sector sentiment, with consumer discretionary likely to move back to a pandemic ‘loser’, but also a deterioration in the outlook on communication services and healthcare. 
 


 
What will happen to the UK and global economy as COVID-19 restrictions and support become a thing of the past? Click here to tell us in our bi-weekly COVID-19 survey. 
 


Previous articles in this series: 

 
 
2020: 
 
 
 

About the COVID Concern Index 

 
This short survey helps gauge sentiment of our community on the pandemic. The results are distributed via the community newsletter. Until 31/08/2020, this was a weekly survey. From 01/09/2020, the survey shifted to a bi-weekly cadence. 
 
The COVID Concern Index values should be used as indication only and do not constitute advice. Their values are bound by the choices available in the survey on which they are based. 
 
COVID Concern Index: 
 
 
Expected minimum duration of outbreak: 
 
A methodology change took place on 06/10/2020, affecting data from 20/10/2020 onwards. 
 
Prior to 06/10/2020: 
 
 
Following 20/10/2020: 
 
 
Expected minimum duration of macro effects: 
 
A methodology change took place on 15/04/2020, affecting data from 21/04/2020 onwards. 
 
Prior to 15/04/2020: 
 
 
Following 15/04/2020: 
 
 
Macro rates index: 
 
 
Sector sentiment index: 
 
 
Concerned about the coronavirus outbreak and its macro implications? Click here to take part in the bi-weekly COVID-19 survey. 

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