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Video conferencing company Zoom continued to ride the boom in working and learning from home as Covid-19 infection rates accelerated again in recent weeks, lifting its revenue more than four-fold in the latest quarter.
New York Governor Andrew Cuomo laid out his “winter plan” for dealing with coronavirus over the coming months including setting out conditions that could potentially result in a repeat of a *“pause”*on economic activity the state undertook earlier this year.
The UK government will soon begin increasing community testing of asymptomatic patients in England, the country’s health secretary has announced. In a televised Downing Street press briefing, Matt Hancock said the Liverpool City region was an example of the success of community testing, and would be moved into tier 2 once the new measures come into effect on Wednesday.
The Transportation Security Administration screened more than 1m passengers in US airports on Sunday in the busiest travel day since March. The agency said 1.18m travellers went through security checkpoints on the final day of the Thanksgiving holiday weekend, typically a busy day for US airports. It was the most since March 16, when there were 1.26m screenings.
At least six people have been killed during a prison riot in Sri Lanka as inmates protested about a rise in Covid-19 infections inside the South Asian country's jails.
The Italian government has approved a further support package worth €8bn for businesses struggling during the coronavirus pandemic.
California ICU beds could run out before before Christmas, Newsom warns
Peter Wells in New York
California Governor Gavin Newsom said hospital capacity and demand would become a more important factor in determining restriction levels for counties and that a worsening of these metrics could result in the potential introduction of a stay-at-home order.
Mr Newsom said that without any intervention that meaningfully changes current trends, the state’s number of hospitalisations could double or triple within the next month, and that statewide demand for beds in hospital intensive care units is projected to have outstripped supply by Christmas Eve.
Hospital bed, ICU and medical staff capacity would be added to other metrics currently used to determine the colour-coded system that governs levels of economic restrictions in California’s counties, Mr Newsom said during a teleconference on Monday afternoon.
Fifty-one of the state’s 58 counties, covering more than 95 per cent of the state’s nearly 40m residents, are in the purple tier that permits only essential businesses to open.
About 8,578 people are in California hospitals with Covid-19, state data on Monday showed, just 242 patients shy of the record it set during the summer surge in July, and up from just over 3,200 at the end of October.
Officials estimate about 12 per cent of new coronavirus cases in California end up as hospitalisations about two weeks later.
The state health department today revealed 14,034 new Covid-19 cases and 20 deaths.
Over the past week, the state has averaged 14,657 new infections a day, a record, and well above the previous peak in July of 9,881 a day, Mr Newsom said.
“If these trends continue, California will need to take drastic action, including a potential stay-at-home order for regions with concerning hospitalisation or ICU capacity,” a slide from Mr Newsom’s presentation said.
Earlier today, New York Governor Andrew Cuomo revealed similar steps, adding hospital capacity to the metrics governing levels of economic activity in “micro-clusters”.
He also warned that a “hospitalisation crisis” could result in potentially reintroducing the “pause” on non-essential activity that was put in place during spring when New York was among the hardest-hit states during the early stage of the pandemic.
Asia-Pacific stocks gain as new month begins
Alice Woodhouse in Hong Kong
Asia-Pacific equities rose at the start of the month, despite a weak lead after investors took profits following a bumper November.
In Japan, the Topix added 0.5 per cent, the Kospi in Seoul was up 1.3 per cent and the S&P/ASX 200 in Australia rose 0.7 per cent.
Global stocks retreated on Monday as investors took some of their profits following the best month in decades thanks to optimism over Covid-19 vaccine breakthroughs. The S&P 500 fell 0.5 per cent on the day, but recorded an almost 11 per cent jump for November.
Attention is trained on Jerome Powell,the Federal Reserve chairman, for pointers on the US economy when he appears in front of the Senate banking committee on Tuesday and Wednesday.
S&P 500 futures were up 0.5 per cent.
Scott Atlas resigns his position as Trump's Covid adviser
Kiran Stacey in Washington
Scott Atlas, Donald Trump’s controversial coronavirus adviser, has resigned his position at the White House, a White House official has confirmed.
Dr Atlas, the neuroradiologist who became the US president’s most trusted source of advice on how to deal with the disease, had angered many public health experts by arguing against restrictions designed to slow the spread of the disease.
His resignation was first reported by Fox News, which published what the channel said was Dr Atlas’s resignation letter.
According to the letter, Dr Atlas said: “More than anything, my advice was always focused on minimising all the harms from both the pandemic and the structural policies themselves, especially to the working class and the poor.”
Korean factory gauge surges to 9-year high despite latest virus waves
Edward White and Kang Buseong
South Korea’s export-led economic rebound picked up pace in November, new data shows, despite new coronavirus waves threatening recoveries across Europe, the US and parts of Asia.
An industry gauge of South Korean factories, which returned to growth for the first time this year in October, last month hit its highest level since February 2011.
The IHS Markit manufacturing purchasing managers’ index rose to 52.9 in November from 51.2 the month prior. The 50-point level separates expansion from contraction.
Usamah Bhatti, an economist at IHS Markit, said both output and new orders grew further, and manufacturers reported a significantly optimistic outlook for activity for the year ahead.
“Both output and new orders rose further in the latest survey period as manufacturers reported more stable operating conditions and the release of pent-up demand ... Amid pressure on capacity, businesses signalled a stabilisation in staffing levels, ending a year-and-a-half of continuous job shedding,” he said.
Separately, trade ministry data showed the value of shipments from Asia’s fourth-biggest economy rose 4 per cent to $45.8bn in November.
The data comes as South Korean health officials grapple with their third serious wave of coronavirus infections this year, prompting the tightening social distancing rules across the country.
Despite the concerns for public health from the latest outbreak, robust demand for South Korea’s technology exports, particularly computer chips, offset the economic hit from when the virus battered the global economy earlier in the year and soft domestic spending.
Also on Tuesday, South Korea revised upward its third-quarter GDP growth.
Asia’s fourth-biggest economy grew 2.1 per cent from the second quarter, officials in Seoul also said, an improvement from the 1.9 per cent growth reported in October. The increase marked the sharpest quarterly GDP rise in a decade.
Last week, the Bank of Korea raised its GDP outlook for 2020 to a 1.1 per cent contraction, from an earlier estimate of a 1.3 per cent decline.
Joe Biden announces team to steer US economy through Covid crisis
James Politi in Washington
Joe Biden, the US president-elect, on Monday announced an economic team that sought to balance experienced Democratic policymakers who will be well-received by markets and business with more progressive economists.
The nominees included Janet Yellen, the former Fed chair, as Treasury secretary, and Neera Tanden, a former senior aide to Hillary Clinton and president of the Center for American Progress think-tank, as budget director. Wally Adeyemo, the president of the Obama Foundation and a former international economic official, was tapped to be deputy Treasury secretary.
Combined with the expected selection of Brian Deese, a BlackRock executive, to be director of the National Economic Council, the picks signalled Mr Biden’s preference for pragmatic centre-left policymakers in his effort to spur the US recovery amid the pandemic shock, at a time when his ambitions will be limited by a closely divided Congress.
However, Mr Biden also chose a trio of progressive economists — spearheaded by Cecilia Rouse of Princeton University — to lead the White House’s Council of Economic Advisers, which effectively serves as the president’s internal think-tank on economic matters. Ms Rouse will be flanked by Jared Bernstein, Mr Biden’s former chief economist when he was vice-president, and Heather Boushey, an economist specialising in income inequality.
“This is the team that will deliver immediate economic relief for the American people during this economic crisis and help us build our economy back better than ever,” Mr Biden said in a statement.
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US Covid-19 hospitalisations top 96,000
Peter Wells in New York
The number of coronavirus hospitalisations in the US topped 96,000, with nearly half of all states reporting their highest levels of the pandemic.
There were 96,039 people in US hospitals with coronavirus, according to Covid Tracking Project data on Monday, up from 93,265 on Sunday and compared with 85,870 on Monday last week.
The number of hospitalisations has more than doubled since the end of October, and has risen 36 times in the past 37 days, with figures on November 27 — just after Thanksgiving — marking the most recent daily decline.
A total of 23 states on Monday reported their highest level of hospitalisations of the pandemic, the highest proportion of states since early April, according to a Financial Times analysis of Covid Tracking Project data.
Concerned about a repeat of the strains on their hospital systems experienced earlier in the pandemic, the governors of New York and California separately announced that hospital demand and capacity would be added to the important metrics that guide the states' responses to containing outbreaks.
States reported a further 147,074 new coronavirus cases on Monday and 1,136 deaths.
Those figures are down from seven-day averages of 158,214 and 1,428, respectively.
Monday data tend to be lower than other days of the week due to weekend delays in reporting, but figures have additionally been affected by last week's Thanksgiving holiday. A record 193,805 cases were reported on November 27.
Japanese manufacturing conditions climb to 15-month high
Alice Woodhouse in Hong Kong
Business conditions for Japanese manufacturers showed signs of improvement in November even as the pandemic worsened in the country, according to a private survey.
The au Jibun Bank Japan Manufacturing purchasing managers’ index rose to 49 in November, up from 48.7 in the previous month. While that reading showed the sector is still contracting, it is edging closer to the 50-point level marking expansion.
The reading was the highest since August 2019 as output and new orders declined at a slower pace.
However, manufacturers reported weak demand as a result of the pandemic and a surge in coronavirus infections.
Exports slowed as regions such as Europe reimposed lockdown measures to limit the spread of coronavirus.
"The Japanese manufacturing sector continued to edge towards more stable operating conditions in November,” said Usamah Bhatti, economist at IHS Markit. “Yet, concern remains that weaknesses caused by the Covid-19 pandemic persisted as both output and new orders both fell for the 23rd month in a row.“
IHS Markit estimates that Japanese industrial production will grow by 7.3 per cent in 2021, but noted that this is from a lower base and will “not fully recover the output lost to the pandemic”.
Hong Kong Disneyland to close as infections surge
Alice Woodhouse in Hong Kong
Hong Kong Disneyland said it will close from Wednesday until further notice as the number of coronavirus infections surged in the Chinese territory.
The closure is the theme park’s third this year, after first shutting its doors in January.
The city is experiencing a fourth-wave of infections triggered in part by a cluster of more than 500 cases linked to dance venues.
The territory’s chief executive, Carrie Lam, on Monday announced further restrictions on restaurants and a tip line for people to report violations of social-distancing guidelines.
The park said on its Facebook page that the closure was required by the government.
Hong Kong Disneyland is celebrating its 15th anniversary in the city, which it marked last month with the opening of a new castle.
The park has been operating on a reduced schedule and is normally closed on Tuesdays and Thursdays.
Ocean Park, a theme park with a zoo on Hong Kong island, also said it would close until further notice.
Chinese factory activity hits 10-year high in November
Tom Mitchell in Singapore
China’s economic rebound from the coronavirus pandemic accelerated sharply last month, according to a manufacturing survey released on Tuesday.
The Caixin/Markit Manufacturing Purchasing Managers’ Index for November was 54.9, its highest reading since late 2010.
The Caixin PMI, which captures activity and sentiment in China’s private sector, was released a day after the Chinese government’s official PMI recorded its highest reading in three years. China’s PMIs track month-on-month changes in activity, with readings above 50 indicating expansion.
Wang Zhe, economist at Caixin, attributed Tuesday’s spike to strong domestic demand, as well as increasing orders for Chinese exports.
Last month’s manufacturing recovery occurred despite a series of defaults by large state-owned enterprises, which has spooked China’s bond markets over recent weeks.
The defaults highlight the stark divergence between the country’s exporters and many large industrial groups that are struggling to manage their high debt levels.
New York hospitals told to brace for coronavirus surge
Joshua Chaffin, Peter Wells and Matthew Rocco in New York
Hospitals in New York state have been ordered to expand capacity and prepare for staff shortages as public health officials get ready for the US coronavirus surge to accelerate after the Thanksgiving holiday.
Governor Andrew Cuomo on Monday warned that the state was entering “a new phase in the war against Covid” as he announced the hospital measures as part of a five-point plan to contain coronavirus through the winter, until there could be a mass distribution of vaccines — possibly in the spring or summer, he predicted.
If necessary, the state would impose another broad “pause” on all but essential businesses, as it did in the depths of the first wave of the pandemic, Mr Cuomo said. In the meantime, he said he hoped for a more targeted approach guided by increased testing — for example, keeping public schools open as long as infections remained low.
As in other US states, New York has seen a resurgence of Covid-19 cases in recent weeks, prompting officials to reimpose some of the social and business restrictions put in place during the pandemic’s early months.
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Manila and Davao to remain under lockdown through Christmas
John Reed in Bangkok
Metropolitan Manila and Davao City are to remain under semi-lockdown through the Christmas holiday after Philippine President Rodrigo Duterte decided to extend a general community quarantine in place in the country’s two largest urban areas.
Mr Duterte announced the decision in a speech late on Monday after the Philippines’ coronavirus task force recommended placing the two cities, along with six other provinces and cities, under lockdown for the whole month of December.
Christmas is the biggest holiday in the mostly Roman Catholic country, and the rest of the Philippines will be under modified general community quarantine, a looser form of lockdown, for the rest of the month.
Manila has been under GCQ since June, and Davao reverted to the measures, under which public transport and some businesses are allowed to operate, after a rise in new Covid-19 cases last month.
The Philippines, which was the first country after China to report a death from the coronavirus, has reported nearly 432,000 cases of the disease and 8,392 deaths to date, the second-highest caseload in south-east Asia after Indonesia.
Mirae wins approval to kill $5.8bn deal for Anbang hotels
James Fontanella-Khan and Sujeet Indap in New York
A US judge on Monday said that South Korean asset manager Mirae had legally terminated a $5.8bn deal with China’s Anbang to buy 15 US luxury hotels, the first ruling in favour of a buyer seeking to pull out of a transaction partly as a result of coronavirus.
Judge Travis Laster said that Anbang had made extensive changes during the pandemic to the way it ran its hotels, which include New York’s JW Marriott Essex House and San Francisco’s Westin St Francis, moves that were in breach of the merger agreement.
The ruling made by the court in Delaware, where most publicly traded US companies are legally registered, could become an important precedent as buyers seek ways out of deals that were agreed at much higher valuations before the Covid-19 crisis.
Sellers have a contractual obligation to run the business in an “ordinary” manner during the time between when a deal is agreed and closing. The so-called ordinary course covenant forces sellers to seek the consent of the buyer to make any significant changes to the way the business is run, regardless of any external events.
Mr Laster said Anbang failed to seek consent from Mirae before taking drastic actions in response to the pandemic, such as furloughing staff and closing properties included in its Strategic Hotels & Resorts portfolio.
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Amnesty demands Sri Lanka act on prison overcrowding after Covid fears trigger riot
Amnesty International has urged Sri Lanka to release thousands of prisoners from its overcrowded jails after a deadly protest sparked by the rapid spread of coronavirus through the country’s prison population.
A riot at the Mahara prison is reported to have left at least six people dead and 50 injured after guards fired live rounds into a crowd of prisoners protesting against dangerous overcrowding and the spread of the virus.
Prisoners fear they have been left vulnerable to the pandemic, with insufficient measures to maintain social distancing and inadequate health care facilities for those who fall ill.
In a statement, Amnesty called for a “thorough and impartial investigation” into the incident and the use of live fire. It also urged Sri Lankan authorities to take urgent measures to decongest the prisons in the face of the pandemic.
The rights group said that prisoners incarcerated “solely for the exercise of their human rights” should be freed immediately. It also said that authorities should consider alternatives to custody — such as parole or early release — for prisoners who do not pose a danger to the public.
Sri Lanka has reported fewer than 24,000 coronavirus infections and just 118 fatalities during the pandemic, but the Associated Press reported that more than 1,000 prisoners have been infected.
Insurers underestimated cost of pandemic, says Swiss Re chief
Oliver Ralph in London
Insurers failed to anticipate the full economic cost of Covid-19 because they did not foresee how far governments would go to protect their populations, according to the head of reinsurer Swiss Re.
Christian Mumenthaler, chief executive of Swiss Re, said governments had not reacted in the way many of his industry’s models anticipated, an implicit acknowledgment that they had not factored in the possibility of lockdowns.
“The one thing none of us has assumed was . . . the higher weight on human life than we had thought,” Mr Mumenthaler told the Financial Times. “The value of human life got massively higher . . . We hadn’t foreseen that they would close down everything.
“The whole industry will have to review some of these models,” he added.
The pandemic has left insurers facing an unexpected torrent of business interruption claims from companies suffering losses caused by coronavirus lockdowns.
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Macau gaming revenue decline slows as tourists return
Alice Woodhouse in Hong Kong
Gaming revenues in Macau fell at a slower pace in November as mainland Chinese tourists returned to the only legal destination for casino gambling on Chinese soil.
Gaming revenue dropped 70.5 per cent year on year in November to 6.75bn patacas ($842.8m), official figures showed on Tuesday. That was an improvement on the 72.5 per cent fall in October and a 90 per cent drop in September.
Gaming revenues have fallen by 80.5 per cent in the first 11 months of the year thanks to pandemic travel restrictions and social distancing measures in casinos.
Macau has successfully contained coronavirus infections, but it remained cut off from the spending power of mainland Chinese tourists, its crucial market, for months.
The number of visitors from mainland China to the gambling hub has improved in recent months after quarantine requirements were removed for arrivals from neighbouring Guangdong province in a reciprocal agreement.
Visitors to Macau from mainland China rose to more than 500,000 in October, according to the latest figures, up from 412,000 in September. However, that was still well below almost 2m monthly visitors in 2019.
Horta-Osório to become chairman of Credit Suisse
Oliver Ralph in London
António Horta-Osório is to become chair of Credit Suisse, succeeding Urs Rohner as the Swiss bank deals with the fallout from the coronavirus crisis.
Mr Horta-Osório was previously chief executive of Lloyds, but the bank said on Monday that he would be replaced by HSBC’s Charlie Nunn.
Credit Suisse said on Tuesday that Mr Horta-Osório would start at the bank at the end of April next year.
Mr Rohner said that Mr Horta-Osório was a “highly proven and recognised professional” with an “impressive record of accomplishments”.
Credit Suisse also said on Tuesday that it was facing a $680m fine in the US because of residential mortgage-backed securities issued in 2007.
It has already taken a $300m provision for the fine, and says it has strong grounds for appeal.
UK house prices rise at fastest rate in 6 years
Valentina Romei in London
UK house prices rose more than expected last month and at the fastest annual rate in six years as buyers rushed to benefit from a property tax reprieve in place until March.
The average price defied expectations to gain 0.8 per cent to £230,000 in November compared with the previous month, the fifth consecutive expansion, Nationwide said on Tuesday.
"These figures feel like the storm before the calm as buyers and sellers rushed to take advantage of the stamp duty holiday before the March deadline, despite continuing Covid restrictions in October, the possibility of a no-deal Brexit and economic growth stalling,” said Jeremy Leaf, north London estate agent and a former RICS residential chairman.
House prices rose 6.5 per cent in November from the same month a year ago, the fastest pace since January 2015, and swifter than a Reuters poll of 5.5 per cent. The October annual growth rate was 5.8 per cent.
The housing market has experienced a mini-boom since the summer when a stamp duty holiday was introduced in July. The sector was expected to cool down in the autumn as the economy weakened and job losses mounted.
Mortgage approvals rose to the highest level since September 2007 in October, the Bank of England said on Monday.
“The nation is engaged in a mass rethink over where to live following two lockdowns, all while interest rates are ultra-low," said Simon Gammon, Managing Partner, Knight Frank Finance. "That’s fuelling gains in house prices and activity has been particularly strong in countryside markets as buyers seek better access to green space.”
Lastminute.com agrees to refund customers after regulator intervenes
The UK competition watchdog has pushed the holiday booking site Lastminute.com into formally agreeing to refund £7m to customers whose holidays were cancelled due to the coronavirus pandemic.
More than 9,000 customers whose breaks were cancelled because of the pandemic are awaiting refunds that total more than £7m, the Competition and Markets Authority said. It means many were left waiting longer than the 14-day legal timeframe for refunds.
The holiday site has agreed formally to pay back the cash by January 31 at the latest, while anyone whose holiday is cancelled by the company on or after December 3 will be paid within 14 days.
The regulator has taken a string of travel operators to task for breaching consumer law during the pandemic, through its Covid-19 taskforce.
In October the watchdog said Virgin Holidays had agreed to pay back £203m in refunds to customers whose breaks were affected by the virus, after it found some clients were waiting 120 days for their money back. The agency has also been investigating unjustifiable price rises, for example of hand sanitiser.
UK to keep 'close eye' on Arcadia insolvency process
Jonathan Eley and Josephine Cumbo
Business secretary Alok Sharma plans to keep "a very close eye" on the insolvency process at high street fashion retailer Arcadia.
"Within three months, the administrators have a duty to file a report on director conduct with the Insolvency Service, who will then determine whether a full investigation is required," the minister tweeted late on Monday.
Philip Green’s Arcadia fashion empire became the highest-profile retail victim of the coronavirus pandemic when it fell into administration on Monday, putting more than 13,000 jobs at risk.
Mr Sharma added that the government remained "fully committed" to supporting retailers and "stands ready to support affected workers".
Asked about the collapse on BBC Breakfast, the Cabinet Office minister Michael Gove said it was "clear that there had been some mis-steps along the way" in the management of the company. He declined to comment on whether Sir Philip should make good the deficit in the group's pension fund.
The scheme will pass into an "assessment period" at the Pension Protection Fund, which could result in reduced benefits for those who have not yet drawn their pensions.
The regulator is facing increased scrutiny from MPs over its decision to allow Arcadia to halve its payments into the company pension plan in 2019, as part of a rescue deal to keep the company afloat.
On Monday, the Work and Pensions select committee wrote to the chief executive of The Pensions Regulator asking a number of questions related to a £385m package for the schemes that it approved for Arcadia last year.
Under the deal Arcadia halved its annual pension contributions from £50m to £25m. In return, Lady Green guaranteed to pay £100m to the schemes through a series of staggered payments, with the group also pledging additional asset security to the retirement funds.
Gove denies plans for immunity passports for pubs and stadium entry
Michael Gove, the Cabinet Office minister, said the UK government was not planning to require Covid-19 vaccine passports to enter hospitality and sports venues -- but did not deny that the measure was under consideration.
“I am certainly not planning to introduce any vaccine passports and I don’t know anyone else in government who would,” said Mr Gove on Sky News.
However, when asked on BBC Breakfast whether the government was looking at introducing requirements for pubs, cinemas and stadiums to verify whether someone has been vaccinated for Covid-19, Mr Gove did not deny it was under consideration.
Immunity passports are seen by some as a key tool to reboot international air travel and their wider application has recently been floated as an idea by a UK government minister.
Nadhim Zahawi, who was appointed as the head of the vaccine rollout at the weekend, said the government was looking at technology that hospitality venues could adopt to vet and prevent unvaccinated visitors from entering their facilities.
However, Mr Gove said that pubs and restaurants were free to choose who they wanted to allow onto their premises as private businesses, adding that “it’s up to any individual pub owner or licensee to decide who they’ll admit and on what basis”.
Singapore-Hong Kong travel bubble pushed back to next year
Singapore authorities said a travel bubble between the city state and Hong Kong planned to begin operating in November has now been delayed until 2021.
"Given that local unlinked cases are still high, both parties have agreed to delay the commencement [of the project]," the Civil Aviation Authority of Singapore said in a statement.
The bubble was to allow travellers to move between Singapore and Hong Kong without quarantine, although they were to be subject to coronavirus testing before and after flying.
But since its announcement, Hong Kong has been experiencing what it calls a fourth wave of Covid-19 infections.
The two governments plan to review the start date in late December.
India's manufacturing activity recovery eases
India's manufacturing activity moderated in November after a sharp recovery from its lows during the coronavirus lockdown earlier this year.
The IHS Markit manufacturing purchasing managers' index contracted to 56.3 from a decade-high of 58.9 in October.
The gauge nonetheless remained at a historically elevated level, which Capital Economics suggested was a sign that manufacturing was proving a source of strength in India's recovering economy.
Data for the quarter ended September, released last week, showed that manufacturing rose a surprise 0.6 per cent year over year, compared with an overall 7.5 per cent contraction in gross domestic product.
But Capital Economics said India's manufacturing sector was still likely to face longer term challenges as a result of the pandemic.
"The extreme weakness of India’s banking sector means that many firms will continue to be starved of finance even long after the virus is brought under control," it said.
Topps Tiles suffers virus blow but sets out 5-year plan to gain traction
Pandemic-induced store closures wiped more than a tenth off Topps Tiles' full-year sales and tipped the group into a pre-tax loss, even as the group flagged the benefits of a home renovation "wave" since the UK's first lockdown.
The tiles specialist raised its ambitions as it outlined growth targets for the next five years on Tuesday. It plans to account for £1 in every £5 spent on tiles and linked products such as adhesives in the UK by 2025, a goal that will demand it outperforms the market by roughly 3.5 per cent every year over the next half-decade.
Meanwhile, Covid-19 restrictions knocked Topps Tiles' revenues to £193m from £219m for the 12 months ending September 26. The group took a £5.6m impairment charge “based on a prudent view of the commercial market following Covid-19”.
This writedown contributed to a pre-tax loss of £9.8m from profits of £12.5m a year earlier, compounded by the effects of accounting rules pertaining to lease liabilities.
The situation has since improved, Topps said, with retail like-for-like sales up a fifth in the first eight weeks of the new year.
The group pointed to a “rediscovery of the love of the home” and some “diversion of discretionary spend from other areas” during the crisis. But while homes account for more than half of the overall UK tile market, the commercial market "has seen and continues to see significant disruption" from Covid-19, Topps said.
No final dividend has been proposed. Management hopes to reinstate the group's payment policy in the new financial year, if it can achieve positive adjusted earnings per share.
Shares in Topps Tiles edged up by about 1 per cent in early London trading on Tuesday. They have fallen by a quarter this year.
Covid restrictions send Spanish manufacturing activity to 5-month low
Martin Arnold in Frankfurt
Spanish manufacturing activity fell to a five-month low in November, underlining how a fresh surge in coronavirus infections is causing a second downturn in the eurozone’s worst-performing economy.
The IHS Markit Spanish flash manufacturing purchasing managers' index fell below economists’ expectations to 49.8 in November, down from 52.5 in the previous month.
It is the first time in three months that the reading has fallen below the 50 mark that indicates a majority of businesses reporting a contraction in activity from the previous month.
Spanish manufacturers reported the biggest drop in new orders since May, reflecting the impact of lower demand in sectors such as tourism and hospitality, IHS Markit said on Tuesday.
“November proved to be a challenging month for Spanish manufacturers as a noticeable reduction in demand, especially from those sectors most influenced by social contact,” said Paul Smith, an economist at IHS Markit.
Activity declined despite the fact that manufacturers have been less disrupted than services companies by the latest coronavirus containment measures because supply chains have so far remained relatively unscathed and exports have rebounded.
According to European Commission forecasts, Spain’s economy has been the hit hardest of any eurozone country by the pandemic and it is expected to contract by more than 12 per cent this year.
France's Axa to focus on health as it sets out latest strategy
David Keohane in Paris and Oliver Ralph in London
France’s Axa has made health the centrepiece of its latest strategy as insurers around the world gear up for a potential pick-up in demand after the pandemic.
The company said on Tuesday that it expected its health and protection insurance revenues to increase 5 per cent a year between 2020 and 2023, thanks to plans to launch “innovative services” such as online health platforms.
Axa and its peers have been hit hard by the coronavirus crisis, paying out on a wide range of policies and dealing with the impact of lower interest rates on its investment book. The company expects to pay out a total of €1.5bn in Covid-19 related claims.
Axa however is aiming for an underlying return on equity of between 13 and 15 per cent between 2021 and 2023.
Axa will also cut €500m of costs by 2023, some of which will come from voluntary redundancies while other measures stem from changes to working habits after Covid-19, including less time spent at the office.
AstraZeneca to sell rights to Crestor as it clears out cupboards
Sarah Neville in London
AstraZeneca has agreed to sell the rights to its venerable one-time blockbuster drug Crestor and associated medicines in more than 30 European countries to German pharma company Grünenthal as the Anglo-Swedish group seeks to redeploy its resources into new medicines.
The deal, which excludes the UK and Spain and is worth up to $350m, will close in the first quarter of next year.
Crestor, which lowers cholesterol and can ward off heart attacks and strokes, was once AstraZeneca’s best-selling drug but it lost patent protection more than four years ago.
Ruud Dobber, executive vice president for AstraZeneca’s BioPharmaceuticals Business Unit, said the divestment “supports the management of our mature medicines to enable reinvestment into the pipeline and bringing new, innovative treatments to patients”.
Last year, Crestor generated product sales of $136m and profit before tax of $98m in the countries covered by the agreement. As recently as five years ago, it made $5bn a year in total for the company, accounting for more than a fifth of its overall product sales.
The Anglo-Swedish drugmaker has developed a coronavirus vaccine with Oxford university, one of a number of Covid-19 shots that have recently undergone late-stage clinical trials. Rival treatments include vaccines from Pfizer/BioNTech and Moderna.
Debenhams faces liquidation and break-up as JD Sports pulls out
Debenhams is likely to be liquidated and broken up after JD Sports said it would not proceed with a bid for the department store group, putting another 12,000 jobs at risk.
In a statement on Tuesday, JD said that "discussions with the administrators of Debenhams regarding a potential acquisition of the UK business have now been terminated".
The news leaves the administrators with few other options, and comes just hours after Arcadia collapsed into administration, putting more than 400 stores and 13,000 jobs at risk.
Debenhams was itself placed into a “light touch” administration in April by its owners, a consortium of financial investors led by Silver Point Capital and Golden Tree, for the second time in as many years.
The administrators have been looking for a buyer since July.
The news came a day after Philip Green’s Arcadia fashion empire fell into administration as it became the highest-profile retail victim of the coronavirus pandemic, putting more than 13,000 jobs at risk.
Italian manufacturing activity recovery loses steam
The recovery in Italian manufacturing activity lost momentum in November but continued to show greater resilience than in spring and compared with other countries.
The IHS Markit Italy purchasing managers’ index for manufacturing, a measure of the health of the sector, fell to 51.5 in November from 53.8 in the previous month.
Despite the weakened reading, the index was above the 50 mark that indicates a majority of businesses reporting improving activity in the eurozone's second largest manufacturing country. It was also higher than Spain's, which fell to 49.8 in November, and for France where an early reading showed a drop to 49.1.
In autumn, Italy implemented a tiered system of restrictions and left factories, building sites and schools open. Italian producers have been further supported by rising Chinese demand and resilience in German factories for which they produce parts and components.
Lewis Cooper, an economist at IHS Markit, said the data was "promising", given that measures were tightened to control the spread of coronavirus in the country.
Italian factories increased production in order to deal with backlogs, but new orders declined for the first time in five months with weaknesses attributed to stricter measures.
The figures were released as Italy revised down its gross domestic product figures for the third quarter. In the three months to September, the Italian economy is now calculated to be 5 per cent smaller than in the same period last year, down from 4.7 per cent in the previous estimate.
Germany continued to lead the eurozone manufacturing activity recovery with a final reading of 57.8, which pushed the final eurozone PMI for manufacturing to a solid 53.8.
Chris Williamson, chief business economist at IHS Markit, said: “Although the rate of expansion cooled from October’s 32-month high amid new lockdown measures, the sustained expansion should help to soften the economic blow of Covid-19 restrictions”.
Final eurozone manufacturing PMI readings:
- Germany 57.8 (flash: 57.9), 2-month low
- Netherlands 54.4, 22-month high
- Ireland 52.2, 3-month high
- Austria 51.7, 2-month low
- Italy 51.5, 5-month low
- Spain 49.8, 5-month low
- France 49.6 (flash: 49.1), 6-month low
- Greece 42.3, 6-month low
European stocks kick month off with optimism after China data
European equities started December on a bright note, following a record November, after encouraging Chinese factory data prompted investors to look ahead to a global economic recovery.
The benchmark Stoxx 600 index rose 0.7 per cent in the first hour of trading, having gained almost 14 per cent in November. The UK’s FTSE 100, which on Monday closed its best month since 1989, opened 1.6 per cent higher. Germany’s Dax added 0.9 per cent.
This followed gains in Asia after a survey run by Chinese publication Caixin found industrial activity in November in the world’s second-largest economy was accelerating at its fastest pace in a decade. Hong Kong’s Hang Seng index rose 0.9 per cent and Japan’s Nikkei 225 1.3 per cent.
“This validates the idea that, when you get the pandemic under control and you really manage to keep it low, economies can catch up extremely rapidly,” said Samy Chaar, chief economist at Lombard Odier.
Mr Chaar added that the composition of Joe Biden’s proposed administration signalled positive prospects not only for fiscal and monetary stimulus but also for a “progressive and gradual winding down” of pandemic emergency schemes that would not overly disrupt financial markets. Former Federal Reserve chair Janet Yellen has been nominated to run the Treasury department.
The Caixin purchasing managers’ index produced a reading of 54.9 for last month, which was comfortably above the 50-level that separates growth from contraction and better than the expectations of economists polled by Reuters. This echoed similar findings from a government survey published on Monday.
Shares in economically and trade-sensitive companies were the best performers in Europe on Tuesday, with banks, energy producers and carmakers all rising.
Futures markets signalled a strong day on Wall Street. Contracts wagering on the direction of the blue-chip S&P 500 index gained 0.9 per cent while those on the technology-focused Nasdaq added 0.7 per cent.
Haven assets, which investors turn to in times of economic stress, continued to underperform. The dollar, as measured against a basket of trading partners’ currencies, hovered around its lowest since April 2018. Gold rose by less than 1 per cent to $1,793 a troy ounce but remained around its lowest since early July.
The Vix, which measures investors’ expectations of share price volatility on the S&P 500, fell to a reading of 20.2, its lowest since late February.
Brent crude, the international oil benchmark, slipped 0.3 per cent to $44.74 a barrel, having gained 27 per cent during November.
Gove urges UK businesses to prepare for any outcome in EU trade talks
Michael Gove, the Cabinet Office minister, has said he "fervently hopes" there will be an EU-UK trade deal, but has urged businesses to speed up preparations for new trading relations in any circumstance on January 1.
Mr Gove was speaking as he launched a new "24/7 border operations centre" to monitor the UK border, which is expected to be the scene of considerable disruption when Britain's EU transition period ends on January 1.
The government claimed the new centre would provide "a complete view of goods and passengers coming in and out of ports for the first time, paving the way for the UK to have the world's most effective border by 2025".
But hauliers, traders and business leaders, already struggling to cope with coronavirus, have warned that they are not ready and that the government itself is unable to give clear answers about future border arrangements.
Trade negotiations between the UK and EU are intended to prevent most tariffs on trade; however traders will still face new bureaucracy at the border on January 1 because Britain is leaving the single market and the customs union.
Mr Gove said:
At the end of year we will take back control of our borders and that’s why we have set up the new border operations centre to monitor and analyse flows of goods and people into the UK in real time. This will help us tackle challenges quickly and decisively, and give us increased information which will make us safer and more secure.
Brexit-buying lifts UK manufacturing activity
"Brexit-buying" boosted growth in UK manufacturing activity in November, despite tighter coronavirus restrictions choking domestic demand.
The UK IHS Markit/Cips purchasing managers’ index for manufacturing rose to 55.6 in November from 53.7 in October, marking the sixth consecutive expansion. The final reading was marginally higher than early estimates of 55.2.
Rob Dobson, director at IHS Markit, which compiles the survey said: “Growth of the UK manufacturing sector picked up in November, temporarily boosted by 'Brexit-buying' among clients and the ongoing boost from economies reopening following lockdowns earlier in the year.”
However, not all sectors enjoyed the same level of growth. Manufacturers of intermediate and investment goods both registered robust and accelerated growth in output. In contrast, the downturn in the consumer goods sector continued, with falls in both production and new business, reflecting weakened demand following a month-long lockdown in England and strict restrictions in the rest of the country.
According to the report, UK manufacturers saw higher inflows of work from overseas, in part boosted by EU clients bringing forward purchases before the Brexit transition period ends.
Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: “Manufacturing companies were running at full pelt in November with a continuing flow of domestic orders and export business rising for the fourth month in a row. Companies in the UK, Europe and the US were buying at speed to meet the Brexit deadline”
The UK PMI manufacturing index was higher than the 53.8 for the eurozone and well above the preliminary figures for the services sector that showed a drop to 45.8, reflecting tightened restrictions across the UK.
Eurozone slumps into fourth month of deflation
Martin Arnold in Frankfurt
The eurozone’s pandemic-stricken economy suffered its fourth consecutive month of deflation in November, providing the European Central Bank with more justification for its widely expected move to inject extra monetary stimulus next week.
Headline consumer prices fell 0.3 per cent in November, showed a flash estimate by Eurostat, which was below economists' consensus expectations collected by Reuters and unchanged from October.
It is only the third time the eurozone has ever had four consecutive months of deflation, following similar spells in 2009 and 2015, despite the ECB launching a multi-trillion euro bond-buying programme and cutting interest rates deep into negative territory.
Core inflation, which strips out more volatile prices of energy, food and tobacco, remained at an all-time low of 0.2 per cent in November, unchanged from October and down from 1.3 per cent in the same month last year.
Many economists expect the ECB to expand the size and timeframe of its €1.35tn emergency bond-buying programme and its ultra-cheap financing for banks next week when it will publish new economic forecasts including its outlook on inflation up to 2023.
The ECB has said there are temporary factors that are depressing prices, including lower oil prices, a stronger euro and value added tax cuts in Germany and other countries. But the latest bout of deflation is likely to intensify calls for it to inject more monetary stimulus.
Munich Re expects return to pre-pandemic profits in 2021
Olaf Storbeck in Frankfurt
Europe's second largest reinsurance company Munich Re is expecting a return to its pre-pandemic level of profits next year after taking a €3.4bn hit from the Covid-19 crisis this year, the company said on Tuesday.
For 2020, Munich Re is expecting a 56 per cent drop in profits to €1.2bn. “In the coming year, we plan – despite anticipated further Covid-19 losses – to meet the profit target of €2.8bn as envisaged prior to the pandemic,” chief financial officer Christoph Jurecka said in a statement on Tuesday morning.
The company said it was expecting pandemic-related losses of about €500m during 2021. While the global health crisis has had a “considerable impact” on Munich Re's business, “the burdens … are financially manageable,” said Mr Jurecka.
Group premium income will rise to about €55bn in 2021 from €54bn in 2020, despite a fall in premium volumes caused by the pandemic.
Shares in Munich Re were up close to 2 per cent to €238.10 in morning trading.
Virus vaccines offer hope for global economic recovery, OECD says
Chris Giles in London
Recent developments in Covid-19 vaccines offer glimmers of hope for the global economy, the OECD said on Tuesday, but it said many potential pitfalls remain in the recovery from the pandemic.
The Paris-based international organisation predicted a strong rebound from this year’s historic global recession in 2021 in its latest forecasts but said that the world economy would not fully regain the lost output until the end of next year.
“We’re still in the middle of the worst crisis, but there is now hope,” said Laurence Boone, OECD chief economist. “The challenge is how to get out of the situation fast and with as little damage as possible.”
In the months ahead, it will be most important for countries to speed up the delivery of vaccines and effective test, trace and isolate systems so that restrictions on activity can be gradually lifted, the OECD said.
Read more from the OECD on hope for a global economic recovery
Weekly excess deaths surpass 2,000 in England and Wales
England and Wales recorded more than 2,000 excess deaths in the week ending November 20, the highest figure since May but significantly lower than in the spring.
Deaths attributed to any cause numbered 12,500 for the respective week, the Office for National Statistics said on Tuesday, up a fifth compared with the average of the past five years and double the rate of excess deaths one month earlier.
Yorkshire and the Humber was one of the worst affected regions, with excess deaths 41.3 per cent above average. Excess deaths in the North West were 38.4 per cent above average.
London, the East and the South all registered excess deaths at or below 10 per cent.
However, despite the worrying increase, overall mortality was still well below levels in the spring when deaths exceeded 22,000 in one week.
Excess deaths are monitored as a measure of how deadly the pandemic is because they include those who have not been tested for coronavirus and not registered as Covid-19 deaths.
The figure adds in people who died from other causes. The rising number could signal strain on the health system resulting in higher mortality beyond Covid-19.
FTSE 100 paces ahead of European bourses
The FTSE 100 roared ahead of other European stock markets on Tuesday, after strong factory data from China and optimism over coronavirus vaccines lifted shares in the exporter-heavy index’s energy producers, basic materials firms and banks.
By late morning on Tuesday, the UK blue-chip index had risen 2 per cent while the broader European Stoxx 600 was trading 0.9 per cent higher.
The FTSE has been one of the worst performing major stock markets in the world during 2020, falling almost 16 per cent.
The index, whose constituent companies derive 70 per cent of their sales from overseas according to Goldman Sachs, was lifted on Tuesday by a private survey that indicated Chinese factory activity accelerated at its fastest pace in a decade in November.
The purchasing managers’ index reading produced by Chinese publication Caixin also boosted the prices of silver, Shanghai-traded aluminum and US-traded copper.
The FTSE, which achieved its best month since 1989 in November, has also benefited from investors’ renewed interest in value shares — unloved companies in economically sensitive sectors — since drug makers began reporting positive data from late-stage vaccine trials last month.
A rotation by money managers away from shares in tech companies that have done well during coronavirus lockdowns, and into value sectors such as energy and financial services, could continue to boost the FTSE, Goldman Sachs strategists wrote in a note on Tuesday.
In Goldman’s view, the FTSE 100 was not primarily driven by the prospects for the post-Brexit UK economy. The bank’s strategists wrote:
We believe the key factors driving FTSE 100 remain commodity prices and value versus growth.
Value sectors are more than a third of the index, whereas the UK has very little weight in tech, especially in the large caps.
Covid vaccinations in EU unlikely to start before next year
Donato Paolo Mancini in London and Joe Miller in Frankfurt
European regulators have pushed back formal assessments of the Pfizer/BioNTech and Moderna vaccines, delaying distribution of the jabs in EU countries to next year.
The European Medicines Agency said it planned to give an opinion on the Pfizer/BioNTech vaccine at a meeting on December 29, making distribution in member states, which will individually rubber stamp the Amsterdam-based regulator’s decision, unlikely until early January.
Member-state approval would come three to four days after the vaccine was approved by the EMA.
The regulator has also pushed back the assessment of the rival Moderna vaccine to January 12. Both jabs were originally supposed to be assessed by the EMA on December 22, according to best-case scenario documents seen by the Financial Times.
Pfizer and BioNTech on Monday finalised their submission to the EMA, which has been reviewing data from the companies’ large-scale clinical trial on a rolling basis since October.
“As a company located in the heart of Europe, [Monday’s] milestone is important to us as we continue to seek to enable a worldwide supply [of the vaccine]” said Ugur Sahin, co-founder and chief executive of Mainz-based BioNTech.
German officials had said as recently as Sunday that distribution of the vaccine — which initial data found to be more than 95 per cent effective in thwarting Covid-19 — could come as soon as the middle of December.
Johnson stresses 'compelling case' for tiered regional system in England
Boris Johnson insisted "a compelling case" exists for regional tiers in England and said the graded system that is set to come into effect from Wednesday is not another national lockdown.
"I accept that this is not a return to normality," the UK prime minister said, "but it is a bit closer to normality than the present restrictions.”
The UK government will provide a one-off payment of £1,000 for pubs in England that do not serve food and that will have to close in tier 2 and tier 3 areas, the prime minister told MPs in the House of Commons ahead of Tuesday evening's parliamentary vote on the measures.
“The hospitality industry has borne a disproportionate share of the burden in this crisis, there is no question about it,” Mr Johnson said, adding that the UK would do everything it can to support the sector.
“While the virus has been contained it has not been eradicated," he said.
For every 85 people in England one has coronavirus, the latest Office for National Statistics figures show. Between November 24 and Monday, 3,222 people in the UK have died of Covid-19.
The NHS remains under pressure within areas such as Yorkshire and the South West, he said.
“I do recognise that the tiers have been toughened as it was obvious to everyone that the previous tiers were a one-way street to tier three," opposition leader Keir Starmer told the House of Commons in response to Mr Johnson's address. "But I’m far from convinced about what the prime minister has said today.”
Sir Keir said Mr Johnson had a pattern of “overpromising and under delivering” and created short-term decisions “that bump into the harsh reality of the virus”.
Labour MPs are expected to abstain from Tuesday's vote on the tiered measures.
US manufacturing growth slows amid hiring challenges
Growth in US manufacturing eased in November on the heels of the strongest month in two years, as the sector struggled to hire workers amid the pandemic.
The Institute for Supply Management’s index tracking factory activity fell to 57.5 last month from 59.3 in October, a sign that the rebound in US manufacturing continued at a slower pace. Economists had forecast a reading of 58.
The manufacturing PMI has registered growth in each of the past six months, following a sharp contraction in the spring during the height of coronavirus-related shutdowns. Readings above 50 indicate expansion.
Andrew Hunter, senior US economist at Capital Economics, said the latest report “suggests that manufacturing production will continue to catch up with the broader economic recovery despite the new wave of pandemic restrictions”.
Manufacturers have benefited from strong demand, although new orders advanced at a slower rate last month. The new orders index fell to 65.1 from 67.9, which marked the highest level since January 2004.
Production growth also slowed. However, the backlog of orders and new export orders both grew at a quicker pace.
Timothy Fiore, chair of the ISM manufacturing business survey committee, warned that labour market difficulties will “continue to dampen the manufacturing economy until the coronavirus (Covid-19) crisis ends”.
Manufacturers were more optimistic in November, while “absenteeism, short-term shutdowns to sanitise facilities and difficulties in returning and hiring workers are causing strains that will likely limit future manufacturing growth potential”, he said.
A sub-index measuring employment in the factory sector slipped back into contraction with a reading of 48.4, down from 53.2 in October.
Covid bond market weakness must be tackled, warns regulator
Matthew Vincent and Stephen Morris in London
Weaknesses that emerged in international bond markets during the Covid-19 pandemic must be “dealt with” and bankers’ pay is due an “adjustment”, a senior financial regulator has warned.
Speaking at the Financial Times Global Banking Summit, Sir Paul Tucker — the former Bank of England deputy governor who now chairs the Systemic Risk Council — said the turmoil in the US Treasury market in March showed that overleveraged investors were still a problem, and that they had again needed central bank support.
There was huge volatility in the US Treasury market in March as the pandemic spread. Markets were only calmed when the Federal Reserve and other central banks stepped in to buy hundreds of billions of dollars worth of assets.
“If the Bank of England and the Fed needed to step in on that scale, the underlying health of the Treasury and gilt market is poor,” he told the event.
He noted that the problem was partly “market design”, but also said that hedge funds and other investors had incentives to to borrow heavily and “leverage up”. When their trading intensified as Covid-19 fears mounted, moves by central banks to calm the markets exposed flaws, Sir Paul explained.
“It got bailed out yet again — the Federal Reserve bailed out a lot of finance in the spring . . . if people in Europe realised that, they would be even more annoyed,” he argued. “This has to be dealt with.”
Arizona smashes daily record with more than 10,000 cases
Peter Wells in New York
Arizona on Tuesday reported more than 10,000 coronavirus cases for the first time, giving a taste of how states may be set to report a leap in daily numbers following the Thanksgiving holiday weekend.
A further 10,322 cases were revealed by authorities this morning, up from 822 on Monday and compared with 4,544 on Tuesday last week.
The record number of infections soars past the Grand Canyon State's previous record of 4,877 on July 1, when it was among those in the sunbelt to experience a surge in cases during the summer.
Arizona's health department, in a message on Twitter, said that Covid-19 "case review and reporting by local authorities was delayed" because of Thanksgiving and the holiday weekend, "resulting in higher numbers than usual" added to the state's dashboard on Tuesday.
The latest batch of cases took Arizona's seven-day average to a record 4,324 a day, up from 3,499 on Monday and surpassing the previous peak rate of 3,964 on November 25.
An increase in testing capacity since the summer means new daily cases may not be directly comparable with earlier stages of the pandemic. Similarly, improvements in treatments may have helped keep fatality rates lower than during the spring, when the pandemic hit states in the northeast the hardest.
Arizona authorities attributed a further 48 deaths to coronavirus, up from five on Monday and compared with 51 on Tuesday last week. The state has averaged about 25 deaths a day over the past week, hovering around its highest levels since late summer, but down from its peak seven-day average of 83 in late July.
The number of people in hospitals around the state being treated for coronavirus reached 2,513, according to Covid Tracking Project data on Monday, a four-month high, and compared with a record 3,517 in mid-July.
France seeks to stop citizens using Swiss ski resorts
Victor Mallet in Paris
French president Emmanuel Macron has said the government is looking at “restrictive and dissuasive” measures to prevent French people from skiing over the border in Switzerland at Christmas when its own ski resorts will be closed.
The move highlights the lack of co-ordination in Europe in tackling the coronavirus pandemic between countries that normally have open borders. Mr Macron said France, along with Germany and probably Italy, wanted to convince other countries such as Switzerland and Spain to keep resorts shut.
“If there are countries that keep resorts open, there will be controls to dissuade the French… to avoid an imbalance with resorts in France,” Mr Macron told the media after meeting Belgian prime minister Alexander De Croo.
France will further loosen its current nationwide lockdown on December 15, but is seeking to avert social gatherings that could trigger a so-called “third wave” of the pandemic. Restaurants and bars will remain closed until at least January 20.
World's biggest vaccine maker says AstraZeneca jab is 'safe'
Stephanie Findlay in New Delhi
The Serum Institute of India, the world's largest vaccine manufacturer, said on Tuesday that the AstraZeneca vaccine is "safe and immunogenic" after a trial participant in India claimed he suffered adverse effects.
Last week, a trial volunteer in Chennai said he suffered neurological and psychological side effects after being administered with the vaccine, called Covishield, and demanded compensation of Rs50m ($680,000).
On Sunday, SII said in a statement that the claim was "malicious" because the volunteer's complications "were independent of the vaccine trial he underwent".
"The Serum Institute of India, will seek damages in excess of 100 crore (Rs1bn) for the same and will defend such malicious claims," said the company.
Health ministry secretary Rajesh Bhushan said at a press conference on Tuesday that the event would not halt the ongoing trials in India.
Safety concerns have prompted pharmaceutical companies to halt trials of Covid-19 vaccines before.
AstraZeneca had in September stopped trials of its vaccine, which it is developing with the University of Oxford, when at least one participant reported unexplained symptoms. Johnson & Johnson paused its trials in October after one participant developed an "adverse reaction".
England to allow care home visits to restart from Wednesday
Families in England will be able to visit their loved ones in care homes from Wednesday, the government has announced.
The Department of Health and Social Care said that starting from this week, individuals will be able to visit care homes — subject to a negative Covid-19 test result.
Visitors will be expected to wear personal protective equipment and follow infection control measures, while care homes have been provided with additional testing kits to allow for two guests per visit.
Health secretary Matt Hancock has welcomed the news and expressed sympathy with families that have been separated throughout the pandemic.
“I’m so pleased we are now able to help reunite families and more safely allow people to have meaningful contact with their loved ones by Christmas,” he said.
“This news has been made possible by the unprecedented strides made in testing technology and capacity, as well as extra PPE supplies.”
The government also said that some residents under the age of 65 will be permitted to visit their families throughout the Christmas period, subject to “an individual risk assessment, a negative test before leaving and a period of self-isolation upon return”.
These residents will be allowed to form a bubble with one other household only.
US senators announce $908bn stimulus proposal
James Politi in Washington and Colby Smith in New York
A bipartisan group of US senators has proposed a $908bn spending package to break the deadlock on fiscal stimulus as Jay Powell, the chairman of the Federal Reserve, made a new appeal for lawmakers to provide more government support to the economy.
The proposal, led by Mark Warner, the Virginia Democrat, and Susan Collins, the Maine Republican, reflects the growing anxiety in Washington over the state of the economy. Negotiations on a new stimulus package faltered prior to the November election and have not resumed.
At a hearing before the Senate banking committee on Tuesday, Mr Powell said the recovery had been "faster" than expected, but the labour market was still 10m jobs below pre-pandemic levels.
"We can both acknowledge the progress and also point out just how far we have left to go," Mr Powell said, adding that the "lion's share of the credit really should go to fiscal policy".
"We'll use our tools until the danger is well and truly passed, and it may require help from other parts of government as well, including Congress," he added.
Later in the hearing, the Fed chairman said: "We can see the end, we just need to make sure we get there."
Read more on this story here.
Florida becomes third US state to reach 1m case milestone
Peter Wells in New York
Florida on Tuesday became the third US state to confirm more than 1m coronavirus infections since the start of the pandemic.
A further 8,847 people tested positive, authorities revealed this afternoon, up from 6,426 on Monday and compared with 8,102 on Tuesday last week.
That took the total number of infections in the Sunshine State to 1,008,166, according to health department data. Only California and Texas have tallied more.
California, Texas and Florida, which rank first, second and third by population, were the main sunbelt hotspots during the summer surge of coronavirus. While the former two have, this month, reported seven-day average case rates that exceeded levels earlier in the year, the latter has yet to challenge its July peak.
Florida has averaged 7,627 cases a day over the past week, down from a rate of 7,800 a day on November 25 that was the highest since early August. Its seven-day average peaked at 11,688 in mid-July, according to a Financial Times analysis of Covid Tracking Project data.
The latest figures come from 111,627 tests reported to authorities over the past 24 hours. There have only been three days in the past fortnight where fewer than 100,000 tests were tallied. The positivity rate among people being tested for the first time rose to 8.69 per cent, the highest level in at least two weeks.
Because of an increase in nationwide testing capacity since the summer, daily case rates may not be directly comparable with earlier months of the pandemic. Similarly, more knowledge and better treatments for coronavirus has meant death rates are generally lower than during the spring.
Florida's health department attributed a further 82 deaths to coronavirus, down from 98 on Monday and compared with 73 on Tuesday last week.
With 18,916 coronavirus fatalities since the start of the pandemic, Florida's death toll ranks fourth in the country behind New York, Texas and California.
Healthcare workers and care home residents get vaccine priority — CDC
Kiran Stacey in Washington
Healthcare workers and care-home residents should receive a coronavirus vaccine first, a top government panel has recommended, as the country prepares for a likely roll out in the next few weeks.
Members of a key government advisory panel voted on Tuesday to prioritise the two groups in the initial phases of vaccine production when doses remain scarce.
The vote means that if one or more vaccines are authorised later this month, most people who work in healthcare settings or long-term care facilities should receive doses of a vaccine by the end of the year.
The Advisory Committee on Immunization Practices (ACIP)'s recommendations will be carried out by state health authorities, who will be responsible for making sure the vaccines get to the people for whom they are intended.
Jose Romero, the chair of the committee, said: "We are using the principles of maximising benefits and minimising harm; promoting justice and mitigating health inequity."
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