This week saw markets decide that rising coronavirus infections were a real concern. On Monday many global equity markets fell 2 per cent or more, with government bond yields falling to levels last seen in early February. However, some good earnings updates made these concerns short-lived. Notably bond yields have been slower to recover, which suggests lingering nervousness about the longevity of the current recovery.
Rapidly rising infections continue to cause severe problems, even in countries with successful vaccination programmes. As the UK is demonstrating, even if the link between infection and serious illness has substantially weakened the huge numbers off work is highly disruptive. Elsewhere, the UK government has decided that the Covid crisis is not sufficiently taxing and has decided to reopen hostilities with the EU by threatening to suspend the new rules for trade with Northern Ireland. Despite the government’s intentions, both problems appear to be complicated, impossible to win and will do more damage the longer they go on.
Read what the team at FE consider to be significant over the current week.