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Total Covid-19 cases

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World

Confirmed

93,901,193

Deaths

2,007,564
Updated at 1/17/2021, 3:12:33 PM BST

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Business travellers coming into England for trips of up to three days could be exempt from the quarantine system under plans floated on Tuesday. A government task force said in a report that the exemption could be introduced in early 2021, although the visitors would be banned from socialising while in England.

The makers of Russia’s flagship Covid-19 vaccine said on Tuesday that interim results from phase 3 trials showed efficacy rates outperforming western vaccines. The state-run Gamaleya Institute said data showed the vaccine’s efficacy was 91.4 per cent 28 days after the first shot, rising beyond 95 per cent after 42 days.

The UK government has approached telecoms operators in a bid to ensure almost 50 coronavirus vaccination centres for healthcare workers in England have fast broadband connections so they can be up and running within a week. The biggest providers, BT and Virgin Media, are among companies asked to assess 47 locations.

Oil prices touched their highest level since March on Tuesday, rising above $47 a barrel after a raft of positive vaccine news sparked a comeback in one of the sectors hardest hit by the pandemic. Brent crude, the international benchmark, gained more than 3 per cent to reach as high as $47.82 a barrel.

International retail chains were on Tuesday counting the cost of the collapse in world travel, as Abercrombie & Fitch said it would speed up closure of flagship stores and Tiffany said sales fell sharply in Europe and the Americas. Other retailers lamenting the tourism slump include Macy’s.

Accor, Europe’s largest hotel company, is merging a quarter of its brands into a new $1bn company with the owner of the Hoxton hotel chain in a bid to move away from a traditional overnight accommodation model that was already being shaken up before the pandemic. The new entity will operate under the Ennismore name.

JD Sports has emerged as the last remaining bidder for Debenhams, as the historic department store chain’s battle for survival nears its conclusion. An agreement on the business’s future is likely to be reached within days, and failure to secure a deal would be likely to result in the liquidation of the company.

Compass has warned it expects office workers to continue working from home even after the pandemic subsides, creating a long-term challenge for the catering group. Dominic Blakemore, chief executive, said he expects white-collar workers to work from home half the week, which would depress its annual sales by 5 per cent.

Vaccine cements Oxford’s place as Covid-19 leader

Clive Cookson

The UK’s University of Oxford has emerged as a global leader in the scientific battle against coronavirus — a bright spot in Britain’s generally less than stellar record in handling the pandemic.

The university was in the spotlight on Monday for the vaccine that reported encouraging efficacy results, but it also runs the world’s biggest clinical trial of Covid-19 treatments and leads academic analysis of infections for the UK’s Office for National Statistics, among other coronavirus projects.

No other university anywhere can match what Oxford has achieved, said Peter Hale, executive director of the Foundation for Vaccine Research in Washington DC. “They were first out of the gate on coronavirus research back in January and have kept their frontrunner status,” he said. “I consider them ‘the little engine that could’.”

Read more here

New Zealand probes airline crew member in China

New Zealand is investigating a possible coronavirus infection in a staff member of the country’s flag carrier in China.

The health ministry said Air New Zealand informed the government of the potential infection on Monday after the crew member tested positive.

The crew are remaining in Shanghai for tests, which have all been negative so far for other members.

“The ministry is continuing to investigate the circumstances of this possible case,” officials said in a statement.

Chicago to extend Covid-19 relief measures

Thanksgiving travellers hit the road in Chicago on Tuesday

George Russell

Chicago said on Tuesday it would extend regulatory relief to businesses affected by the pandemic, as the US city’s mayor warned against Thanksgiving get-togethers that could spread the Covid-19 virus further.

The city said it would extend temporary relief efforts such as licence renewals, while allowing restaurants and cafés to expand outdoor dining.

Mayor Lori Lightfoot said she did not want the city to share the fate of neighbouring Canada, where cases surged after its Thanksgiving holiday last month.

“Canada celebrated Thanksgiving on October 12,” Ms Lightfoot wrote on Twitter. “What happened shortly after is what we want to avoid. It's not too late to change your traditional Thanksgiving plans to protect the people you love.”

Canada signs Covid-19 therapy deal with Eli Lilly

The Canadian government on Tuesday signed a deal with US drugmaker Eli Lilly for 26,000 doses of its Covid-19 monoclonal antibody therapy.

Under the agreement, deliveries of Bamlanivimab will begin in December and be completed in February 2021.

Canada would have the option to purchase more.

Eli Lilly co-developed the therapy with AbCellera Biologics, a Vancouver-based biotechnology company.

Hong Kong shuts bars and clubs for 3rd time

Hong Kong bar districts such as SoHo will be quieter from Thursday

George Russell

Hong Kong will close bars and nightclubs for the third time this year to curb a surge of Covid-19 cases.

More than 180 infections have emerged in recent days at dancing clubs and dance studios, but authorities declined to shut those venues down.

“All bars or pubs, bath-houses, clubs or nightclubs must be closed,” the government said in a statement on Wednesday.

Hong Kong recorded 80 more cases on Tuesday, 54 of them linked to the dance club cluster.

“There have been several days with multiple cases of untraceable sources, and almost one-third of infected people were asymptomatic,” said Sophia Chan, food and health secretary.

Bars in the Chinese city were first closed in April for a month, and again from mid-July to mid-September.

Texas shatters record for daily new cases

Peter Wells

Texas on Tuesday shattered its record for daily cases, reporting nearly 14,000 new infections.

A further 13,998 new cases were revealed by the health department this afternoon, up from 6,576 on Monday. That soared past the previous record of 12,597 set on Saturday.

Texas has now averaged more than 10,000 cases a day over the past week, a threshold it never exceeded during its surge alongside other sunbelt states during the summer.

While an increase in testing volumes may explain some of the increase in daily cases, a rise in hospitalistions and deaths over recent weeks suggest coronavirus has reestablished itself in the state.

There are currently 8,495 people in Texas hospitals receiving treatment for Covid-19, the most since August 4 and representing an increase of 142 over the past 24 hours.

Asia stocks extend global rally on US transition

Alice Woodhouse

Asia-Pacific equities climbed after Wall Street hit new highs as Donald Trump moved to begin the transfer of power to president-elect Joe Biden.

The rally continued in Asia on Wednesday with Japan’s Topix up 1 per cent, the Kospi in South Korea gaining 0.8 per cent and the S&P/ASX in Australia up 0.8 per cent.

Greater certainty over the transfer of power buoyed sentiment and indications that Mr Biden would pick former Federal Reserve chair Janet Yellen as Treasury secretary was also welcomed.

“Yellen has been critical of the tariffs Trump imposed on China, so if her appointment is approved we could see a more collaborative approach to trade issues,” ANZ analysts said in a note. “The markets also expect Yellen to bring in more economic stimulus and to have fiscal and monetary policy working closer together.”

On Wall Street on Tuesday, the S&P 500 climbed 1.6 per cent to a new record and the Dow Jones Industrial Average rose above 30,000 for the first time.

Cook Islands wins loan to offset plunging tourism

George Russell

The Cook Islands, with tourism accounting for about one-third of its economy, has turned to the Asian Development Bank for a $20m loan to offset plunging revenue.

While the self-governing South Pacific archipelago has not yet reported a case of Covid-19, the economy is expected to contract 7 per cent this year as tourist arrivals have halted.

Tourism-related jobs account for about half of all private sector employment and one-third of total jobs.

The ADB loan would provide employment support payments, and cash payments for the elderly, the infirm and caregivers. It would also enable interest and credit relief for households and businesses and provide business grants.

“This assistance will enhance the government’s ability to prevent the pandemic from entering the Cook Islands,” said ADB president Masatsugu Asakawa.

“[It will also] mitigate the negative social, health, and economic impacts caused by the pandemic on livelihoods and local business, with a special focus on vulnerable households,” he added.

Singapore free of clusters for 1st time since February

Alice Woodhouse

Health authorities in Singapore reported the city state is free of active clusters of coronavirus infections for the first time in almost 10 months.

The country’s Ministry of Health said no new cases had been linked to a cluster at the Cassia@Penjuru migrant dormitory for two incubation periods, or 28 days.

“With the closure of this cluster, there are no active Covid-19 clusters for the first time since [February 3],” the ministry said in a statement on Tuesday.

Singapore, which initially contained small outbreaks of the virus, was forced into a lockdown in April after infections sprung up in the densely populated migrant dormitories.

The country has recorded more than 54,000 cases among dormitory residents, and almost 2,300 cases in the “community”.

No locally transmitted cases of coronavirus were reported on Tuesday.

US records deadliest day in more than 6 months

Peter Wells

The US had its deadliest day in more than six months on Tuesday after reporting more than 2,000 coronavirus fatalities.

States attributed a further 2,028 deaths to coronavirus, according to Covid Tracking Project data, up from 956 on Monday and compared with 1,555 on Tuesday last week.

That took the national death toll to 250,925. Johns Hopkins University, which uses an alternative methodology to CTP, said last week that fatalities crossed the quarter-of-a-million mark.

The latest increase in deaths was the biggest one-day jump in fatalities since the record of 2,753 on May 7, when northeastern states like New York and New Jersey were hit hard during the early stage of the pandemic.

The US has averaged 1,517 fatalities a day over the past week, the highest rate since mid-May, according to a Financial Times analysis of CTP data.

Coronavirus deaths tend to lag behind cases and hospitalisations.

The recent rise in the fatality rate beyond levels experienced during the summer surge runs counter to claims the record levels of coronavirus cases — and hospital admissions — over the past month were simply a function of nationwide daily testing capacity that had been continually ramped up.

Commuters wearing masks wait at a bus stop in Detroit

Several states each reported more than 100 fatalities, including Texas (162), Michigan (154), Illinois (150), Indiana (103). Missouri (189) and Wisconsin (114) both set single-day records for deaths, as did Alaska (13), Maine (12) and Oregon (21), according to an FT analysis of Covid Tracking Project data.

The number of people currently being treated for Covid-19 in US hospitals hit 88,080, a record high for the 15th day running. Seventeen states reported their highest level of hospitalisations of the pandemic, compared with 19 that hit records on Tuesday last week.

States reported 166,672 coronavirus cases, up from 150,975 on Monday, and nearly 10,000 more than the tally on Tuesday last week.

While there were some concerning developments — with Texas and California reporting their biggest and second-biggest one-day jumps in new cases since the start of the pandemic — trends in the Midwest are showing nascent signs of improvement.

Ohio was the only one of the 12 states in the region where its seven-day average of cases hit a record on Tuesday, while six of them are down at least 10 per cent from peak rates, according to CTP data.

Turkey breaks record with 7,000-plus new cases

George Russell

Turkey continues to break records with new daily cases of coronavirus infection exceeding 7,000, according to health ministry data released on Tuesday.

The country’s total Covid-19 caseload reached 460,916 with the addition of 7,381 more coronavirus patients. The death toll rose by 161 to reach 12,672.

The number of new daily cases are now running at higher levels than the outbreak’s previous peak in April, while the number of patients in critical condition now stands at 4,543.

Health minister Fahrettin Koca said he was concerned by sharp increases of new cases in three of Turkey’s western provinces.

“There is a significant increase in Bursa, Kocaeli and Gaziantep,” Dr Koca wrote on Twitter. “A more diligent and more meticulous effort is required in these provinces.”

Connecticut raises fines for Covid-19 capacity breaches

Pupils run a socially distanced obstacle course in Stamford, Connecticut

George Russell

Connecticut on Tuesday increased fines for businesses violating Covid-19 protocols to $10,000 from $500, as the north-eastern US state fights rising coronavirus cases.

Governor Ned Lamont said the new penalties would go into effect on Thursday, aimed at discouraging businesses from allowing too many people in confined spaces.

“We have seen a small number of businesses in flagrant violation of these public health rules,” Mr Lamont said. “That’s all you need to cause a super-spreading event that leads to a large number of cases and hospitalisations.”

Some smaller fines would remain in effect, such as $500 for organising an event over capacity limits or breaching a travel advisory, $250 for attending such an event and $100 for not wearing a face mask or covering in public.

AI algorithm detects Covid-19 in chest X-rays

George Russell

An artificial intelligence algorithm can detect Covid-19 in chest X-rays as accurately as experienced thoracic radiologists, a US study published on Tuesday shows.

The researchers, led by Chicago cardiologist Ramsey Wehbe, said detecting Covid-19 on chest radiographs “might be useful for triage or infection control within a hospital setting”.

The algorithm, known as DeepCOVID-XR, is a deep learning AI algorithm that uses neural networks to detect Covid-19 on frontal chest radiographs using real-time polymerase chain reaction as a reference standard.

The algorithm was trained and validated on 14,788 images provided by the Northwestern Memorial Healthcare System from February to April, then tested on 2,214 images from a single institution.

Performance of the algorithm was then compared with interpretations from five experienced thoracic radiologists. The results were published in Radiology, a US journal.

DeepCOVID-XR’s accuracy was 83 per cent, compared with 76-81 per cent for individual radiologists and 81 per cent for a consensus of all five.

Trade Secrets: Travel bubbles struggle to take flight

Throughout the coronavirus pandemic people around the world have looked to Asia-Pacific — the initial frontline of the crisis — for inspiration to rebuff the deadly disease and rebuild battered economies, Edward White and Christian Shepherd write in the latest Trade Secrets newsletter.

This week’s issue looks at the region’s mixed success with travel bubbles and fast-tracked visa systems during the pandemic. We posit there may be a lesson for vaccine diplomacy.

The proposed Singapore-Hong Kong bubble was postponed after a spike in local transmission in the Chinese city, while 10,000 South Korean businessmen have entered China through special processes set up under a bilateral agreement .

Read more Trade Secrets here

France eases lockdown curbs as new cases fall

George Russell

France will begin to ease its lockdown from this weekend, president Emmanuel Macron said in a statement released by the Élysée Palace on Tuesday.

“The peak of the second epidemic wave has now passed,” Mr Macron said, citing a reduction in daily cases from more than 60,000 on November 5 to about 20,000 cases per day this week.

From Saturday, some nonessential businesses such as toy stores and bookshops will be allowed to reopen.

The 1km travel restriction will extend to 20km, but people will still require permission from the authorities to leave home.

“It will therefore be necessary to continue to stay at home, to telework, when possible, to give up private meetings and family gatherings, and all unnecessary travel,” Mr Macron said.

Outdoor after-school activities will resume, while places of worship will reopen with no more than 30 people.

“On December 15, if we have reached around 5,000 infections per day.... we will be able to move on to a new stage,” Mr Macron said.

Delivery deaths stoke gig economy debate in Australia

Jamie Smyth

Chow Khai Shien moved to Australia five years ago in search of an education and a better life. But his new life was snuffed out last month when a stolen car smashed into the 36-year-old Malaysian’s scooter as he made a delivery for DoorDash, one of the world’s biggest gig economy companies.

“It was heartbreaking when I confirmed . . . that he was completing a delivery when the accident happened. My brother’s life is basically gone and all for the price of a cup of coffee,” Chow Khai Sing, the dead rider’s sister, told the Financial Times.

Five delivery drivers have died in accidents in Australia in the past two months, sparking a debate about regulating the gig economy at a time when it is enjoying a surge in demand following Covid-19 lockdowns.

Read more here

Beijing to reserve Chinese vaccines for Hong Kong

Alice Woodhouse

Hong Kong leader Carrie Lam said Beijing will reserve vaccines developed in mainland China for people in the territory.

In her annual policy address, Ms Lam, Hong Kong's chief executive, said Beijing would reserve a certain number of vaccines “when necessary” for people in Hong Kong.

The city has signed up for the Covax Facility ensuring access to vaccines and held discussions with vaccine developers to secure the jabs.

Ms Lam said Beijing requested that the Hong Kong government “adopt all measures to guard against the importation of cases and resurgence of domestic infections, with the aim of gradually resuming travel between Hong Kong and Guangdong”.

Hong Kong residents who live in Guangdong or Macau have now been permitted to return to the city without undergoing quarantine.

The city had managed to contain a wave of infections that started in July, but a stubborn number of untraceable infections have continued in recent weeks.

Health authorities said last week that a fourth wave of infections had begun in the city following a cluster of infections at dancing clubs. The cluster has now swollen to almost 200 cases.

Ms Lam said her government forecasts the city’s economy will contract by 6.1 per cent in 2020.

Gojek bags $150m investment from Telkomsel

Shotaro Tani

Indonesian superapp provider Gojek has bagged $150m from Telkomsel, the country’s state-owned mobile operator, as it adjusts to new business conditions brought about by Covid-19.

Both companies had been business partners for a while, with Telkomsel providing Gojek drivers with cheap data options, but this marks the first time the mobile operator will be making an investment into the “decacorn” — a private company valued at more than $10bn.

Telkomsel is a joint venture between state-owned telecoms group Telkom Indonesia and Singapore’s Singtel. The mobile operator’s parent, Telkom, was reportedly close to investing in Gojek back in 2018, but the deal fell through when it failed to secure backing from top ministerial figures.

Read more here

Asia-Pacific recovery ‘extends lead over US, Europe’

Alice Woodhouse

The pandemic recovery in Asia-Pacific has extended its lead over the US and Europe, according to an ANZ ranking.

ANZ’s analysis found Asia-Pacific had extended its lead thanks to effective management of the virus that has allowed the economic recovery to continue.

A rebound in trade has also supported the Asian economies that are more reliant on manufacturing than their Western counterparts.

China, South Korea and Singapore have now passed 200 days since the peak of their coronavirus infection curves, ANZ foreign exchange strategists John Bromhead and Daniel Been said.

China tops the ranking which takes account for the share of services within the overall economy, the number of days since the peak of infections and direct stimulus as a percentage of gross domestic product.

A woman takes a selfie in Wuhan, China, where the pandemic began

Australia and Singapore came in second and third place respectively.

The US and Europe are experiencing a second surge of virus cases, forcing a repeat of lockdowns to limit the spread of the virus which threatens to derail their economic recoveries.

New Zealand is the country with the highest level of fiscal stimulus as a percentage of gross domestic product, at 20 per cent, while Australia comes in fifth at 12.5 per cent, according to the report.

ANZ said New Zealand and Australia’s effective response to the crisis had already been priced in.

The Australian dollar has seen the best performance of all G10 currencies, strengthening 20.4 per cent since April, while the New Zealand dollar has firmed 17 per cent.

“Prior to any widespread vaccine roll-out, the currencies at the top of this list should continue to outperform those at the bottom,” the report said.

“Those that are still trading below fair value like the [Australian dollar] and [Chinese yuan] present additional value as the global recovery picks up pace into 2021,” it added.

Scramble to secure PPE cost UK extra £10bn

Daniel Thomas

The UK government’s belated efforts to secure personal protective equipment for health workers during the Covid-19 pandemic led to huge extra costs to the taxpayer, according to a report from parliament’s spending watchdog.

The National Audit Office found that England had inadequate levels of PPE going into the crisis, and in ramping up supply after March the government paid “very high prices due to unusual market conditions”.

The government would have saved £10bn on this essential gear if it had been acquired in 2019, the NAO said.

Read more here

YouTube suspends rightwing news channel

OANN reporter Chanel Rion asks a question at a White House briefing

Hannah Murphy

Google’s YouTube has suspended rightwing channel One American News Network for a week for breaching its rules against coronavirus misinformation, as social media platforms continue their crackdown on misleading public health content.

The Silicon Valley company said on Tuesday that it was blocking OANN, which has been endorsed by US president Donald Trump as an alternative to mainstream cable channels, from posting new videos and live streams for a seven-day period for “violating our Covid-19 misinformation policy, which prohibits content claiming there’s a guaranteed cure”.

OANN chief executive Robert Herring said in an email that the channel had uploaded a programme in which its staff “interview a lot of people who claimed they had recovered [from] the virus after receiving hydroxychloroquine”, a controversial anti-malaria drug which scientific tests have indicated has no role in treating Covid-19.

YouTube also said that it was removing the channel’s ability to monetise its existing videos for repeatedly violating its Covid-19 policies and others.

OANN would have to reapply to YouTube in order to make money from its videos again, proving that it has tackled the issues that led to its temporary suspension.

Social media platforms including YouTube, Facebook and Twitter drew up new policies earlier this year to tackle the deluge of coronavirus misinformation that has spread during the pandemic, targeting in particular falsehoods that could lead to real-world harm.

OANN, which has 1.2m subscribers on YouTube and often racks up millions of views on its videos, did not immediately respond to a request for comment.

NZ reimposes lending curbs over bubble fears

Jamie Smyth

New Zealand’s central bank will reimpose mortgage lending restrictions from March amid concerns historically low interest rates are creating a housing bubble in the country.

It follows an intervention by the newly re-elected Labour government, which wrote to the governor of the Reserve Bank of New Zealand asking the bank to consider house price “instability” when setting monetary policy.

Wellington’s decision to request such a change to RBNZ’s remit has prompted a debate about the bank’s independence and the aggressive action it has taken to stimulate the economy during Covid-19.

Read more here

IMF upholds Russia forecast if Covid-19 contained

Bolshoi Ballet dancers Igor Tsvirko and Margarita Shrainer rehearse in their Moscow kitchen during a lockdown

The IMF is slightly more optimistic about a Russian economic recovery, revising its outlook for contraction of gross domestic product to 4 per cent from 4.1 per cent in 2020.

However, the fund revised likely growth in 2021 to 2.5 per cent from 2.8 per cent.

“All in all, we project the economy to contract by about 4 per cent this year,” the IMF staff concluding statement issued on Tuesday said, assuming that the pandemic would “gradually normalise”.

Nevertheless, it added, “the economy will remain well below full employment for the foreseeable future”.

The IMF warned of weaker activity if "stronger lockdowns need to be imposed, in turn bringing about new layoffs and further stretching firms’ balance sheets."

“The economy was showing signs of a healthy recovery that is now under threat from a sharp rise in infections,” the statement noted. “The large contraction in the second quarter was not as severe as in most other G20 countries.”

Russia reported a record 491 deaths linked to Covid-19 on Tuesday, bringing the official death toll to 37,031, according to the official Tass news agency.

Authorities reported 24,326 new cases nationwide.

Christmas ‘bubbles’ to allow UK households to mix

Jasmine Cameron-Chileshe, Mure Dickie and Andy Bounds

Three households from across the UK will be able to form a “Christmas bubble” over the five days between December 23 and December 27, the government announced on Tuesday.

Leaders of the devolved nations agreed in a meeting led by Michael Gove, the UK Cabinet Office minister, to relax coronavirus restrictions and allow people to travel across the country during the five-day window.

The Christmas plan marks a rare, common approach to the pandemic across the UK, where the devolved governments in Scotland, Wales and Northern Ireland have generally taken a more cautious approach than the UK government, which sets policy for England.

Read more here

Greek ICU doctors elevated to permanent staff

Greek doctors working in intensive care units on contracts would be able to join public hospitals as permanent staff, prime minister Kyriakos Mitsotakis announced on Tuesday.

The decision follows a similar hiring of nurses earlier in the pandemic.

“It is an act of recognition by the state of the great work they carried out during the pandemic and a dire necessity to staff new ICUs opening the past few months,” Mr Mitsotakis was quoted as saying by the official ANA-MPA news agency.

The prime minister said the country had more than doubled the number of ICUs in the National Health System from 557 before the pandemic to 1,242 now.

The health budget has increased from €3.8bn in 2018 to €4.8bn in 2020, he said.

Celltrion to offer North Korea its Covid-19 treatment

Song Jung-a and Edward White

South Korean pharmaceutical group Celltrion has promised to freely provide North Korea with its coronavirus treatment drug next year, as the global race to develop vaccines and treatments for Covid-19 intensifies.

The Seoul-based group has injected its experimental Covid-19 antibody treatment to 327 patients for its second-phase trial and would seek conditional approval for the new drug from local regulators by the end of this year.

The company plans to seek local regulatory approval for emergency use after confirming its interim results from the trials being run in South Korea, the US and Europe.

The offer comes against a backdrop of uncertainty among North Korean watchers over the pandemic’s reach into the isolated state.

Pyongyang has not publicly confirmed any Covid-19 cases after implementing a swift lockdown on its borders in January, ahead of most other countries. Many international experts and officials are sceptical of the claims of zero infections, however.

In its second trial, Celltrion is testing the new treatment on patients with both mild and serious symptoms. The treatment is the most advanced antibody drug for Covid-19 being developed in South Korea, the company says.

A Seoul barbecue restaurant owner looks out on a sparsely travelled street

The news comes as South Korea is facing a new spike in coronavirus cases as the weather gets colder. The country added 382 new cases on Wednesday, increasing the total caseload to 31,735. Three more deaths were reported, increasing the death toll to 513.

Health authorities are considering strengthening social distancing measures further to curb the increasing trend.

Celltrion began initial production of the drug, called CT-P59, in September in its domestic plant to initially treat about 100,000 people.

The company plans to conduct its third-stage trial soon with patients in about 10 countries and expects the drug to treat up to 2m people next year after obtaining overseas regulatory approvals.

While optimism has built over several vaccines being developed, pharmaceutical groups also remain battling to develop Covid-19 treatments.

Earlier this month, the Food and Drug Administration granted emergency authorisation for the antibody treatments made by the biotech companies Regeneron and Eli Lilly.

ECB signals lifting ban on bank dividends

Martin Arnold

Eurozone banks will be allowed to pay dividends again from next year if they convince supervisors that their balance sheets are strong enough to survive the economic and financial fallout from the coronavirus pandemic, a senior European Central Bank executive has said.

The ECB ordered eurozone banks to stop all dividends and share buybacks to conserve €30bn of capital in March, shortly after the pandemic arrived in Europe. Since then, the sector has been lobbying hard for stronger banks to be allowed to resume capital distributions early next year.

Yves Mersch, vice-chair of the ECB’s supervisory board, told the Financial Times he was concerned that banks benefiting from a regulatory easing of capital requirements would pay out some of that capital to shareholders, but it would be difficult to maintain a dividend ban beyond the end of this year.

Read more here

Some Indonesians should pay for vaccine, says official

A senior Indonesian official has called on citizens who can afford to pay for a coronavirus vaccination to stump up the cash to reduce the financial burden on the government, state media reported on Wednesday.

Erick Thohir, state-owned enterprises minister, said Indonesia would introduce two vaccination programmes, one to make a vaccine available free from the government and the other a fee-paying programme for the more affluent, the Antara news agency reported.

Mr Thohir, who is also deputy chair of the national Covid-19 economic recovery committee, said the preliminary targets of the vaccination programme would be Indonesians aged 18 to 59.

Fireworks ban ignites anger in Germany

New Year’s Eve pyrotechnics explode over Berlin

Guy Chazan

Germany’s leaders in their campaign to curb the spread of coronavirus are risking public fury by taking aim at one of the country’s most popular traditions — the New Year’s Eve fireworks display.

The 16 leaders of Germany’s federal states have agreed to restrictions for the festive season that include a prohibition on pyrotechnics in busy public spaces. The intention is to prevent big gatherings that could turn into superspreader events for Covid-19.

Chancellor Angela Merkel’s government and the regional leaders will discuss the proposals at a video conference on Wednesday, against the background of coronavirus infection rates that remain stubbornly high despite a partial shutdown in force since the start of this month.

Read more here

West Indies to assess Bangladesh cricket tour

Cricket West Indies said on Tuesday it would send an advance party to assess whether the coronavirus pandemic has receded safely enough for the team to tour Bangladesh in January 2021.

A medical officer and the security manager would inspect facilities in Dhaka and Chittagong, the organisation said.

“We would be the first international team to visit Bangladesh since the onset of the pandemic and, acting always with the health and safety of our touring party at the forefront of our minds,” said Johnny Grave, Cricket West Indies chief executive.

Cricket West Indies governs Caribbean cricket on behalf of the Barbados, Guyana, Jamaica, Trinidad and Tobago, Leeward Islands and Windward Islands local associations.

A visit to Bangladesh would mark the third tour for the West Indies team since the outbreak of the pandemic. The team is now in New Zealand and visited England earlier this year.

Pakistan wary of second surge as cases rise

Stephanie Findlay in New Delhi

Pakistan may experience its worst surge of coronavirus infections in the coming weeks if people do not follow social distancing guidelines, warned planning minister Asad Umar.

“At that time [in June], people could not even find beds in hospitals. We will be pushed back to that level if the standard operating procedures are not followed strictly,” said Mr Umar on Tuesday at a press conference with special health assistant to the prime minister Dr Faisal Sultan.

Pakistan earlier this week closed schools early for winter break and banned indoor dining to try and slow a rise in coronavirus infections. The country recorded almost 3,000 new infections in the past day, according to the latest health ministry data.

Mr Umar said that provincial governments have been asked to appeal to influential clerics to get people to start wearing masks and observing social distancing.

Pakistan has over 380,000 cases and 7,800 coronavirus deaths. South Asia is experiencing a rise in cases as the cold, polluted winter months increase complications from respiratory illnesses.

Tullow to focus on African assets as oil prices recover

Nathalie Thomas in Edinburgh

Tullow Oil is to focus on its producing assets in West Africa as part of a plan to boost cash generation and secure the troubled energy group’s future.

The oil company, which in September warned that it could default on its debt if it did not address a potential liquidity shortfall, has told shareholders it expects to be able to generate $7bn of operating cash flow over the next decade.

Of this $2.7bn will be invested back into the company, making around $4bn available to service its $2.4bn of net debt and to put towards shareholder returns.

Its cash flow forecasts are based on oil prices of $45 per barrel in 2021 and $55 per barrel from 2022 onwards. Oil prices yesterday reached their highest level since March, at one stage surpassing $48 per barrel, boosted by optimism over coronavirus vaccines.

Over 90 per cent of future capital expenditure will be directed towards Tullow’s assets in West Africa — which form the backbone of its business — to maximise production and cash flow. There will also be a “rigorous” focus on costs, the company said on Wednesday.

G4S to resume dividends in 2021 as it fights off suitors

Harry Dempsey

G4S will resume paying out dividends from next year, as the London-listed security group fends off takeover attempts by rivals.

In April, G4S suspended its final dividend for 2019 due to the coronavirus pandemic, then later opted not to declare an interim dividend this year to preserve cash.

The private security operator expects underlying earnings to grow this year, despite the pandemic pushing revenues slightly lower, thanks to a clampdown on costs.

The group expressed confidence on Wednesday about that momentum continuing into next year. It expects year-on-year revenue growth of 4 to 6 per cent and said that three-quarters of the growth is covered by contracts already won.

However, it has had to contend with a £2.9bn hostile takeover bid from GardaWorld, its smaller Canadian rival.

G4S reiterated its view that the offer is too low. “The GardaWorld Offer does not remotely reflect G4S’s fundamental value, let alone its value to GardaWorld and BC Partners,” said John Connolly, chairman of G4S.

Read more about G4S defending itself from takeover bids here.

Virgin Money profits hit by £500m of provisions

Owen Walker

Virgin Money’s pre-profit tax sank by three-quarters in the year to October after it set aside £501m to cover bad loans, as the UK lender prepared for the longer term consequences of the coronavirus pandemic on its customers.

The UK’s sixth-largest bank reported a pre-tax profit of £124m in its full-year results on Wednesday and warned that its retail-focused business was vulnerable to the hit to the economy of multiple lockdowns.

“Although the vaccine news is a strong cause of hope for the future, the economic benefits are still some way off when considering the immediate reality of current restrictions,” said David Duffy, chief executive of Virgin Money.

The bank’s pre-provision operating profit of £625m was 10 per cent down on a year earlier, because interest rate cuts hurt its margins.

Virgin reported a 13.6 per cent increase in business lending to £8.9bn, thanks to £1.2bn of government-backed lending. Personal lending was up 3.9 per cent, while mortgage lending declined 3 per cent.

Defence contractor Babcock halts interim dividend as profit halves

Peggy Hollinger

Babcock International, the UK defence contractor, suspended its interim dividend as underlying pre-tax profit plunged by half in the first half due to the impact of the pandemic crisis.

The group, which is in the throes of a wide-ranging restructuring, said the constraints imposed by Covid-19 had made it impossible to earn a return on some long-term contracts, with employees often having only restricted access to customer sites.

Dave Lockwood, the new chief executive who took up his post in September, said the situation had slowly improved over the year but continued progress is dependent on the extent of the pandemic across the countries in which Babcock operates.

There was uncertainty as well from the potential impact of Brexit at the end of this year, Mr Lockwood said, although the group believed the risk of problems in its supply chain due to delays at the border with the EU was limited.

Underlying pre-tax profits — adjusted for one-off charges, disposals and currency movements — fell from £202.5m to £98.9m in the six months ending September, on revenues down almost 9 per cent to £2.2bn.

Free cash flow at £58.4m was better than expected thanks to the timing of VAT payments across Europe.

Mr Lockwood suggested he had plans for further restructuring, pledging to unveil an update to the group's existing programme of disposals and efficiency improvements in the spring.

Chinese Covid vaccine maker seeks approval before final stage trials

Christian Shepherd in Beijing

A state-owned Chinese vaccine maker has applied to local regulators for approval to sell its coronavirus shot ahead of concluding final stage efficacy trials as domestic developers race to keep up with international rivals.

China National Biotec Group, a subsidiary of state-owned pharmaceutical group Sinopharm, has submitted an application to begin commercial sales to the National Medical Products Association, the parent group's vice president Shi Shengyi told state-run Xinhua Finance on Wednesday.

Sinopharm’s shares shot up to hit the Shanghai stock exchange’s 10 per cent upper limit after the news broke.

The two vaccines developed by CNBG, both of which used a chemically inactivated version of the virus to spark an immune response, are among five offerings from Chinese companies in phase 3 efficacy trials, usually the last hurdle before regulator approval.

Sinopharm said last week that its vaccines have been given to 1m people, many of whom received it as part of a controversial “emergency use” programme. The group claims that there have been no major adverse reactions but has not made clinical data public.

An unnamed Sinopharm employee told the Global Times, a state-backed newspaper, that the group has shared some phase 3 data with Chinese regulators but “is not under pressure to reveal its vaccine data" publicly.

Robust final stage trial results from Pfizer, Moderna and AstraZenica vaccines have knocked value off many Chinese vaccine makers’ share prices and added pressure to bring products to market.

China has pledged its vaccines will be distributed across the developing world as part of a diplomatic charm offensive to soothe ties frayed by the pandemic, which began in Wuhan.

De La Rue's cost-cutting helps earnings as turnround takes hold

Harriet Clarfelt

Aggressive cost-cutting at De La Rue has buoyed adjusted earnings as the UK banknote printer flagged progress on its multiyear turnround plan.

The company’s first-half adjusted operating profits rose almost seven times to £15.3m.

Central bank demand for cash during the coronavirus pandemic helped prop up its currency division, De La Rue’s largest by sales.

The Essex-based group recently extended its Bank of England banknote printing contract through to 2028.

Overall revenues slipped by about a fifth to £180m, a decline that was exacerbated by the sale of the group’s international identity solutions business in October 2019 and the end of De La Rue’s UK passport contract.

The group’s authentication business is in early talks with governments “regarding Covid-19 immunity certification schemes”.

A £100m capital increase in July helped the group’s hefty net debt pile to shrink by almost four-fifths from the 2020 year-end to £21.6m. It aims to be generating positive free cash flow and able to pay “sustainable cash dividends” by the end of the 2023 financial year.

The shares dropped 5 per cent in early trading on Wednesday to 172p, having climbed by more than a third this year.

Tokyo asks residents to stay home and restaurants to shut early


Yuriko Koike, the governor of Tokyo

Robin Harding in Tokyo

The governor of Tokyo has urged residents to avoid unnecessary outings and to work from home wherever possible as the city wrestles with an inexorable rise in cases of Covid-19.

“The infection situation in the city remains extremely severe. With an increase of 54 serious cases today, in particular, the situation is highly unpredictable,” said Yuriko Koike in a press conference. “We now need to strengthen our measures still more.”

The number of new cases in the city was 401 – close to a record high – with infections reported in several schools. The percentage of tests coming back positive in Tokyo has risen to 6.7 per cent, the highest since the summer.

Tokyo is also asking restaurants and karaoke boxes to close early at 10pm but is providing financial support to compensate them for doing so.

The national government is limiting its “Go To” campaign to subsidise domestic travel. Japan has no framework for compulsory lockdowns but requests for voluntary business closures in the spring were widely respected.

Nationwide coronavirus cases in Japan have been rising by around 2,000 a day, with a particularly severe situation on the northern island of Hokkaido.

UK car dealers Lookers delayed earnings report shows 2019 loss

Peter Campbell

UK car dealership group Lookers has disclosed an annual loss of £45.5m for 2019 after uncovering £300,000 of fraud by a former director and tens of millions of pounds of inflated profits.

Heavily delayed results published on Wednesday show profits were overstated by a total of £25.5m over several years, including by £10.9m in 2019.

The company said it had set aside £10.4m for a possible fine by the Financial Conduct Authority.

In addition to the misstated profits, Lookers revealed a £21.8m shortfall in the company’s balance sheet, of which £19m had been disclosed earlier in the year.

The £45.5m pre-tax loss compared with a profit of £41.9m in 2018, a figure that has also been lowered by £7.2m following a criminal investigation.

The turmoil at the company comes as car dealers grapple with the economic uncertainties of the pandemic, being forced to shut for a second time this year during the UK’s latest lockdown.

However pent-up demand and an increase in online buying means that some dealers are experiencing a boom in trading despite the latest restrictions.

The business first revealed it was investigating possible fraud in March, but the scope of an initial probe by consultancy firm Grant Thornton widened during the year into past accounts and balance sheets.

The shares have been suspended since July, after the company missed the six-month window for publishing annual accounts, and will not begin trading until next month, when the business is due to publish its delayed half-year results for the first six months of 2020, Lookers said.

European stocks poised for record monthly gains in November

Naomi Rovnick

European equities drifted on Wednesday, allowing investors to catch their breath after a stunning rally as they awaited the latest assessments from policymakers on the strength of the economic recovery.

The benchmark Stoxx 600 share index, broadly flat on Wednesday, is on track for a record month with a 14.7 per cent gain in November, fuelled by optimism about Covid-19 vaccines. The UK’s benchmark FTSE 100 has gained almost 16 per cent this month.

Analysts looked forward to announcements from central banks and governments, plus any prospects for further fiscal or monetary stimulus.

UK chancellor Rishi Sunak will outline his latest spending review on Wednesday lunchtime where he is expected to launch a £4.3bn plan to tackle the threat of mass unemployment.

The Office for Budget Responsibility will release its forecasts, which are expected to show a £40bn hole in Britain’s public finances.

Sterling, which has been buoyed by traders’ expectations that the UK will forge a workable post-Brexit trade deal with Europe, gained 0.2 per cent against the dollar to purchase $1.34, its highest level since early September.

Brent crude, the international oil benchmark, rose a further 1.1 per cent to $48.41 a barrel, taking it’s rise so far this month to close to 30 per cent.

Caution crept in to markets ahead of the Federal Reserve releasing minutes from its latest meeting that could provide clues to its thinking on further monetary stimulus.

The European Central Bank, in its latest minutes to be published on Thursday, could provide clues on topics such as whether the region’s banks will be allowed to pay dividends next year.

UK restaurants and bars claim £849m from 'eat out to help out' scheme

Alice Hancock

Restaurants, pubs and other dining out businesses in the UK claimed £849m from the Treasury during August as part of the government's "eat out to help out" scheme, figures published by the Office for National Statistics on Wednesday show.

The initiative cut the cost more than 160m meals, which offered diners a state-backed discount of 50 per cent on food and non-alcoholic drinks up to a limit of £10.

A third of meals claimed through the scheme, which ran for one month, were bought at the 0.3 per cent of participating businesses with 25 or more outlets, suggesting a significant boost to larger players.

Just over 90 per cent of claims and more than half of the total discount went to the thousands of independent food service operators with one site.

Many restaurateurs praised the summer's eat out to help out scheme for encouraging people to spend money, while providing a much needed shot in the arm to a sector that has been largely closed or under restrictions since March. The scheme has equally been criticised for potentially increasing the spread of the virus.

Nearly 50,000 businesses registered to take part, covering a total of 78,116 sites. Enthusiasm grew throughout the month, the ONS figures show.

Restaurants made up over half of the businesses claiming through the scheme, with pubs and bars accounting for 28 per cent, and hotels 8 per cent.

Public in EU's 'frugal' four show concern about recovery fund misuse

Valentina Romei

Large minorities in “frugal” EU countries are concerned about the misuse of the bloc’s €750bn pandemic recovery fund, in a sign of a fresh source of public anxiety about its centrepiece economic response to coronavirus.

The EU sealed a deal on the recovery fund in July after resistance from Austria, Denmark, the Netherlands and Sweden, which were opposed to the idea of permitting the union to borrow money and hand it out as budgetary expenditure for member states.

The public in those nations expressed less concern about the EU spending too much money and more about potential corruption and waste by recipients of the recovery fund, according to a survey across 8,000 respondents by the European Council on Foreign Relations, a think tank. As many as half of Austrians expressed concern about potential misuse, while about 40 per cent of respondents in Sweden and Netherlands also bore worries.

The survey also showed that almost half of citizens in Finland, and about 40 per cent of respondents in Sweden, the Netherlands, Austria and Denmark believe that their country’s standing in the EU has declined in the last 2 to 3 years.

“This polling reveals that the public in so-called frugal countries are most concerned about the misuse of funds by net beneficiaries of the EU budget," said Susi Dennison, author and senior fellow at ECFR. "There’s a widespread belief that their leaders are not able to shape the future direction of the EU."

China rebound sends global trade higher for fourth month

Valentina Romei

Global trade rose for the fourth consecutive month in September, narrowing the gap with last year’s level as China’s economic rebound fuelled global imports and exports.

The volume of international goods trade rose 2.1 per cent in September compared with August, marking an uninterrupted recovery since May, according to a widely watched world trade monitor published by the Netherlands Bureau for Economic Policy Analysis or CPB.

Trade growth was geographically broad-based, with the eurozone, the US, Latin America, emerging Asia and Eastern Europe all recording an expansion.

The monthly increase helped to narrow the gap with September 2019 levels to 1.6 per cent, the smallest year-on-year fall since the drop of minus 17.5 per cent in May.

The trade recovery was stronger in China, where trade was 9.5 per cent above last year’s level in September, boosted by stronger economic growth than in most major economies and by Chinese companies stockpiling on electronics ahead of US sanctions.

Chinese goods imports were up 14.5 per cent in September compared with the same month last year, in sharp contrast with a 5.2 per cent contraction in the eurozone where an uneven and incomplete economic recovery resulted in subdued demand.

Sunak to set out £4.3bn plan to tackle threat of mass unemployment

George Parker, Delphine Strauss and Chris Giles

UK chancellor Rishi Sunak will on Wednesday set out a £4.3bn plan to tackle the threat of mass unemployment as he braces Britain for the brutal economic fallout from the coronavirus crisis.

Mr Sunak will tell MPs in his spending review that his “number one priority is to protect jobs and livelihoods”.

The chancellor is due to say that now is not the right time to begin fiscal consolidation, even as he publishes what government officials admitted were “scary” new forecasts showing the economic destruction caused by the Covid-19 pandemic.

The Office for Budget Responsibility’s forecasts are expected to show much higher unemployment and unsustainable public finances.

Britain’s fiscal watchdog is set to warn that after the Covid-19 slump in output this year, with huge government expenditure and weak tax revenues, the public finances will still be under pressure at the time of the next general election in 2024. UK public debt in August topped £2tn.

Officials suggested the forecasts will show a hole of about £40bn in the finances that will need to be filled by higher taxes or an unexpectedly strong recovery from the economic downturn.

Boris Johnson, prime minister, has ruled out a return to “austerity” in public spending and on Wednesday Mr Sunak will announce tens of billions of pounds of capital investment intended to create jobs by building roads and houses and through green energy schemes.

UK working household figures signal scale of pandemic hit on jobs

Harriet Clarfelt

The proportion of working households in the UK edged down in the September quarter, hinting at the scale of virus-induced job losses ahead of the government’s much-anticipated spending review on Wednesday.

The number of working households dropped by 236,000, or 2 per cent compared with the same three months a year ago, to 12.3m, the Office for National Statistics said. This represented 58.9 per cent of total households, down from 59.6 per cent. They fell by 157,000 from the previous quarter.

Pre-pandemic figures showed the number at almost 12.8m last December.

Completely unemployed households rose by 23,000 from a year earlier to 258,000.

“These latest figures provide further insight into the scale of the impact the pandemic has had on the UK labour market,” said Alistair McQueen, head of savings and retirement at insurer Aviva. The fall in working households “has been partly driven by firms reacting to lower demand by shrinking their staffing levels”, he added.

Mr McQueen noted that older and younger workers are being hit hardest by job disruption during the crisis, which could “represent a serious drain on talent”.

Key questions as Sunak lays out spending plans

Jim Pickard

Here are some of the key themes to look out for in today’s spending review as Rishi Sunak deals with the pandemic’s hit to the UK economy:

How bad will the new forecasts be?
Britain's public finances right now are as tight as the hoodie that Mr Sunak wore in his pre-released official photographs.

We are expecting a sea of red from the Office for Budget Responsibility as it sets out its revised fiscal and economic forecasts.

Will the economy shrink more than 10 per cent for the year? Will the forecast for public borrowing be over £350bn? Also look out for the figure of public spending as a proportion of gross domestic product, which could hit 60 per cent, the highest since the second world war.

Will the government retain its commitment to ending austerity?
Boris Johnson has previously vowed: “We will not be responding to this crisis with what people call austerity.” Last year’s one-year spending round for 2020-21 was the most generous since the early 2000s. Last week the government handed the military the biggest payout in decades. Today we will find out the level of day-to-day spending in 2021-22 and some capital spending plans for the next three years. Will it amount to a continuing rise or not?

Who will lose out?
Defence, education, capital spending and health will do better than the average, at the expense of spending elsewhere, including 5.5m public sector employees whose pay will be squeezed. Ministers have already signalled that the government’s commitment to spend 0.7 per cent of national income on international aid is under threat. The key question today is whether this will be a permanent or temporary change. If the aid target is dropped forever there will be anger on the Conservative back benches.

Other areas feeling particularly vulnerable are those that used to receive funds – such as agricultural subsidies - from the EU and want that to be replicated by the Treasury.

What will happen to 'levelling up'?
Ministers insist that their main focus is “levelling up” distant regions of the country. Today Mr Sunak will seek to flesh out that promise with allocations of capital funding for projects around the country.

He will announce changes to the Treasury “green book”, which decides whether projects deserve funding. And he will set out plans to move thousands of civil servants out of London, including a new branch of the Treasury in northern England.

At the same time he will release a national infrastructure plan setting out government priorities for capital spending, and will announce plans for a National Infrastructure Bank.

How much has Covid-19 cost?
The Treasury will split out what has been spent on coronavirus from normal public spending and treat it as a one-off. With spending on PPE and the test and trace programme running into the tens of billions, alongside significant sums on enabling the NHS to cope — including the cost of the Nightingale hospitals — the direct cost of the crisis is likely to exceed £200bn.

For the first time, Mr Sunak will have to allocate money in the 2021-22 financial year to address the continuing costs of coronavirus and the testing and vaccination programmes. The Treasury has said the NHS will receive £3bn in additional funding to help clear the backlog in routine procedures and operations that were missed during the pandemic.

UK opposition leader says ministers 'sprayed money' on PPE contracts

Jim Pickard

Keir Starmer raised the issue of government spending during this week’s prime minister’s questions, asking why ministers had been “spraying money” on contracts to buy protective personal equipment that were not usable.

A report by the National Audit Office, published on Wednesday, found that up to 195m items bought by the government had turned out to be potentially useless – including 75m respirator face masks.

Sir Keir, leader of the opposition Labour party, said this appeared to be a “misuse of taxpayers’ money”.

But prime minister Boris Johnson said that this was a “pathetic line of attack” given that the vast majority of PPE acquired during the frantic early months of the Covid pandemic had been usable.

Mr Johnson said that 99.5 per cent of the 32bn items of PPE bought by the government conformed entirely to clinical needs once checked.

Sunak vows to invest in schools and hospitals

Jim Pickard

Rishi Sunak has vowed to invest in schools and hospitals and continue supporting business through the Covid-19 pandemic as he warned that “the economic emergency has only just begun”.

The chancellor of the exchequer announced that the UK is facing a fall in GDP of 11.3 per cent this year, the largest fall in output for 300 years.

He said that borrowing is at its highest level in peacetime history and that the economy faces long-term damage – and will still be 3 per cent smaller even in 2025.

Mr Sunak confirmed that the government was on track to spend £280bn on support through the pandemic.

The chancellor confirmed that pay rises in most of the public sector would be “paused” next year. However, there would be a pay rise for 2m state workers on below-average pay and for over 1m NHS workers, he confirmed.

Meanwhile the living wage will be increased by 2 per cent in line with the recommendation of the Low Pay Commission, he said.

UK economy to shrink 11% this year, returning to pre-Covid size in 2022

Chris Giles

Right at the start of his speech, chancellor Rishi Sunak revealed the UK government's economic forecasts and the government's spending on tackling Covid-19 since March.

They're as horrible as ministers feared with records broken in many areas.

The UK economy will lose 11.3 per cent of its size this year, according to the forecasts from the independent Office for Budget Responsibility. There will be a recovery in the following years, it said, but the economy will return to its pre-pandemic size at the end of 2022.

At the time of the next election, the scars from the coronavirus crisis will still be visible with output 3 per cent lower in 2025 than forecast at the time of the March Budget.

With weak growth comes higher joblessness. Unemployment is forecast to almost double to 7.5 per cent next year.

But the biggest effect is on the public finances. The government is set to borrow £394bn this year, the highest level in peacetime, 19.4 per cent of national income.

Part of that came from £280bn spent tackling Covid-19, with £55bn allocated for 2021-22 in addition.

Mr Sunak said the forecasts suggested borrowing would still be over 4 per cent of national income by 2024, with public debt still rising rapidly.

This, the chancellor said, was "unsustainable" as he hinted tax rises would be necessary. It is "our responsibility to return to a sustainable fiscal position," Mr Sunak said.

Most public sector pay to be frozen

Delphine Strauss

Public sector pay will be frozen next year, except for NHS workers and those on lower incomes, Rishi Sunak has announced.

The chancellor said that he could not justify higher public sector wages across the board at a time when many in the private sector had had their pay and hours cut, adding that the pause would also help to protect public sector jobs.

However, there would be a pay rise for more than 1m nurses, doctors and other NHS workers. In addition, 2.1m workers earning below the median wage of £24,000 a year would be guaranteed a pay rise of at least £250, he said.

Meanwhile the government has accepted the Low Pay Commission’s recommendation that the main adult rate of the national minimum wage should rise by 2.2 per cent – modestly above inflation – to £8.91 per hour from next April. This would mean a pay rise of £345 for a full time worker on the statutory minimum rate next year.

Sunak insists no return to austerity despite spending cuts

George Parker

Rishi Sunak and Boris Johnson have been adamant that there will be no return to "austerity" — with the prime minister barely able to bring himself to utter the word — in spite of the mountainous deficit and debt being racked up during the Covid-19 crisis.

The implication is that tax rises rather than spending cuts will bear the burden of the fiscal consolidation to come later in the parliament. But Mr Sunak's spending review confirms that, ultimately, spending cuts and tax rises will both be needed.

A public sector pay squeeze will feel like austerity to those on the receiving end — which does not include NHS staff — while Mr Sunak's cuts to the overseas aid budget are also a sign of his intent to cut spending, albeit abroad rather than at home.

George Osborne, former chancellor, hinted this week at the problems Mr Sunak will face when he comes to present Tory MPs with the tax bill for the coronavirus rescue mission.

"Given no British government has been willing — or able to persuade the public — to take the tax burden higher than 40 per cent of national income, much of the strain is always borne by spending," Mr Osborne wrote.

Mr Sunak's problem is that he is chancellor in a government combining two powerful factions: Tory MPs from northern seats who want more public spending and MPs from southern seats, much less vociferous to date, who want to keep taxes down.

Balancing those two strands of Tory thinking next year will be a huge task for the neophyte chancellor. As Mr Osborne suggests, Mr Sunak may have to blur what he means by "austerity" as he tries to drive the deficit down.

UK pound steady as Sunak unveils spending review

Naomi Rovnick

Sterling was unmoved by the chancellor's speech as he unveiled his spending review in the House of Commons, trading broadly flat against the dollar in midday trading in London.

The FTSE 100 was 0.6 per cent lower on Wednesday, but the blue-chip index of leading shares had fallen earlier in the session as a broad, global equities rally paused for breath. European stock indices declined.

The yield on 10-year UK bonds fell 0.01 percentage points to 0.37 per cent, indicating UK government debt remained supported by the Bank of England's monetary stimulus.

Rishi Sunak spending plans include a forecast that the UK economy will lose 11.3 per cent of its size this year, returning to its pre-pandemic size at the end of 2022.

Departmental spending to rise by the most in 15 years

Jim Pickard

Rishi Sunak said that departmental spending would rise by 3.8 per cent next year - the fastest rate in 15 years - but he admitted this would be partially funded through a cut in aid spending.

The rises would include an increase of £6.6bn for the core health budget, £2.3bn for capital spending in the NHS and a rise in the schools budget of £2.2bn. “The British people’s priorities are this government’s priorities,” he said.

During a domestic fiscal emergency “when we need to prioritise our limited resources” it would be difficult to justify spending 0.7 per cent of national income on aid, Mr Sunak said.

The chancellor said he had listened with great respect to those arguing to keep the target, including many Tory MPs: “But at a time of unprecedented crisis the government must take tough choices.”

Mr Sunak said that aid spending would increase once again once the fiscal situation had stabilised.

The chancellor also promised a major increase in infrastructure spending in the rest of the Parliament with £100bn of capital spending next year alone.

Sunak unveils levelling up fund and UK infrastructure bank

Gill Plimmer and Jim Pickard

Rishi Sunak unveiled a “levelling up fund” worth £4bn from which councils will be able to bid for grants, as part of the Tory government's commitment to spreading wealth far beyond the South East.

The chancellor also confirmed plans for a National Infrastructure Bank to channel £600bn into capital projects over the next five years, half of which is to be privately financed.

Details of the new lender will be revealed in the spring but it will have a remit to help deliver the UK’s commitment to reach net zero carbon dioxide emissions by 2050 and provide funding for projects across the UK. It will co-invest alongside private investors through a mix of loans and guarantees as well as taking equity stakes in projects.

The infrastructure bank is in part designed to replace funding previously obtained from the European Investment Bank, which the UK is leaving after the Brexit transition period ends on December 31.

Sebastian Payne adds:
Mr Sunak’s surprise announcement was a £4bn "levelling up" fund to improve infrastructure and physical environment in England’s cities and towns.

The chancellor told MPs it will fund “what people want and places need”, adding that “the most powerful barometer of economic success is the change people see and the pride they feel in the places they call home”.

This fund will support “high value local projects” up to £20m that come with the backing of local MPs and must be delivered in this parliament. Full details of the levelling up fund, which will “drive growth and regeneration”, will be published in the new year.

The Treasury said the levelling up fund could support projects such as “bypasses and other local road schemes, bus lanes, railway station upgrades, regenerating eyesores, upgrading town centres and community infrastructure, and local arts and culture”.

Schools funding to rise £2.2bn next year

Bethan Staton

On education, Mr Sunak has committed to the government's existing four-year plan to increase schools funding.

Next year, that will mean an increase in schools funding of £2.2bn, putting the government "well on the way" to meeting its commitment to a £7.1bn increase by 2022/23.

Mr Sunak promised to make good on the prime minister's pledge to rebuild 500 schools over the next decade. "Every pupil in the country will see a year on year funding increase of at least 2 per cent," he said.

On "boosting skills" Mr Sunak confirmed £291m to pay for young people to go into further education, £1.5bn to rebuild colleges and £375m to deliver the lifetime skills guarantee, plus an adult skills and training scheme promised earlier this year.

Retailers and hospitality sector left without any further reprieve

Jonathan Eley

Retailers and hospitality businesses hoping for further reprieve from business rates are likely to be disappointed by a relatively modest move to freeze the "multiplier" used to calculate the controversial levy.

Both sectors have benefited from a 12-month holiday from business rates that has saved businesses around £11.8bn in the current fiscal year.

But that waiver ends on March 31 2021 and the next revaluation of rates, which are calculated based on properties' rental values, is not due until 2023.

The freezing of the multiplier - at this year's level of 51.2 pence per pound of rateable value, or 49.9 pence for small businesses - will save businesses in England £575m over the next five years, the Treasury said.

The government said it is also "considering options for further Covid-19 related support through business rates reliefs" with plans to be set out in the new year.

A review into the future of the entire business rates system is also due to report provisional conclusions next year.

Government to spend nearly £20bn on housing

George Hammond

The chancellor committed to spending almost £20bn on housing, though the bulk of that had been flagged before Rishi Sunak unveiled his spending review to MPs on Wednesday.

Mr Sunak announced a £7.1bn national home building fund and confirmed a £12.2bn affordable homes programme.

The chancellor said £4.8bn from the fund will be allocated as capital grant funding to boost development, as the government aims to ramp up house building across England, while £2.2bn will be loaned to smaller builders.

Estate agents hoping for an extension to the government's stamp duty holiday were disappointed, with no mention in the chancellor's speech of prolonging the property tax holiday, which is due to come to an end on March 31.

The reprieve, which has saved some buyers up to £15,000, has been behind a surge in property sales and an increase in prices in recent months.

Transport sector to receive billions of pounds in subsidies

Philip Georgiadis and George Steer

The chancellor said the government will continue to pour billions of pounds into the transport network to keep services running following a collapse in passenger numbers during the pandemic.

Rishi Sunak said the government will spend more than £2bn next year subsidising the rail network, as the industry shifts away from the franchising system to a contracts-based model.

Overall, the government estimates it will have spent £10.6bn propping up passenger rail services by the end of 2022, including £8bn in 2020-2021.

The Treasury noted that the final cost to the public purse remains uncertain as it depends on how quickly passengers start using public transport again.

The chancellor said it will also spend £4.8bn to support buses, regional light rail, cycling and Transport for London.

Mr Sunak added the transport network will benefit from a "once in a generation" investment in infrastructure, including upgraded railways and new cycleways.

A further £120m will go towards funding 800 zero-emission buses in 2021-22. In February the prime minister said at least 4,000 such buses would be delivered over the next four years.

UK entrepreneurs to benefit from £56m boost to start-up loan scheme

Daniel Thomas

More than £56m has been set aside to support an additional 1,000 loans for entrepreneurs under the start-up loans scheme administered by the state-owned British Business Bank.

The government has said that £519m would be allocated for the broader Covid-19 loans schemes through 2021, mainly to cover the banks’ interest payments for the light touch ‘bounce back’ loans. These offer up to £50,000 at interest rates of 2.5 per cent, but the first year is covered by the government.

The British Business Bank has been given £422m for its other activities such as providing access to finance to small businesses across the UK, and a further £270m to support growth finance, regional finance and the National Security Strategic Investment Fund, which invests in advanced technologies of national interest.

Labour’s Dodds says spending plans take 'sledgehammer' to confidence

Oliver Ralph

The UK's shadow chancellor has hit out at Rishi Sunak’s spending review, saying that it “takes a sledgehammer to consumer confidence”.

Anneliese Dodds said that the chancellor's decision to limit public sector pay rises will hit UK businesses: “Firefighters, police officers and teachers will know their spending power is going down so they will spend less in our small businesses and on our high streets,” she said.

“Many key workers who willingly took on so much responsibility during this crisis are now being forced to tighten their belts,” Ms Dodds added.

She criticised the Conservative government’s spending on crisis measures, saying there had been a “bonanza” for companies that had won government contracts.

The government has mismanaged public finances “on an industrial scale”, the Labour party's shadow chancellor said, pointing to money spent on unsafe testing kits and face masks that could not be used.

Covid deaths to reduce annual state pension spending by £600m

Josephine Cumbo

The state pension bill will be around £600m lower than forecast this financial year because of tens of thousands of pensioners dying from Covid-19, according to estimates from the Office for Budget Responsibility.

The OBR said on Wednesday that it had revised up its estimates for pensioner-age deaths this year from 62,000, made in its July Fiscal Sustainability Report, to 90,000, as a result of the "resurgence" of coronavirus infections.

Analysis in the FSR, published four months into the pandemic outbreak,
suggested Covid-19 deaths would reduce state pension spending by £500m this year.

But in its Economic and Fiscal Outlook, published on Wednesday, the OBR revised this figure higher to £600m, due to greater numbers of pensioners expected to be hit by the second Covid-19 wave.

UK's move to end RPI use in 2030 will save taxpayers billions

Tommy Stubbington, capital markets reporter

The UK will end use of the controversial retail prices index in 2030, the government said on Wednesday, in a move that saves billions for the taxpayer but will cut payouts to some pensioners.

Rishi Sunak confirmed that the measure of inflation, which overestimates the annual pace of price rises by nearly 1 percentage point, will be moved in line with a different gauge preferred by the UK’s statistical authorities.

Holders of inflation-linked government debt, who will also lose out from the shift, will not receive any compensation, Mr Sunak added.

The change means that from 2030, more than 10m people with traditional final salary pensions will see the annual uprating of their benefits switched in line with the lower consumer prices index including housing costs.

Investors in index-linked gilts — government bonds where interest payments are adjusted in line with inflation — will see their payouts cut, saving the Treasury an estimated £2bn a year.

US initial jobless claims rise for the second week in a row

James Politi in Washington and Mamta Badkar in New York

First-time applications for US unemployment benefits rose to 778,000 last week, the latest worrying sign of waning momentum in the labour market as it grapples with a new wave of coronavirus cases and fading fiscal support.

The increase of 30,000 in weekly jobless claims came alongside a slight decrease in claims for federal pandemic unemployment assistance, a separate programme for workers not eligible for regular state benefits, the labour department said on Wednesday.

Overall, nearly 1.1m Americans sought jobless claims for the first time last week, and about 20.5m are receiving unemployment benefits of some kind, more than eight months since the coronavirus crisis began in the US.

“Encouraging vaccine news bodes well for economic activity from mid-2021 onward, but the expiry of policy safety nets at the end of 2020 means the near-term outlook will be bleak for many heading into the holiday season,” Nancy Vanden Houten, an economist at Oxford Economics, wrote in a note.

The discouraging data on unemployment claims come as negotiations are at a standstill on possible new stimulus for the US economy, with no signs of serious negotiations between the outgoing Trump administration, Republicans who hold the majority in the US Senate and Democrats who control the House of Representatives.

Other data released on Wednesday showed that the US trade deficit — which US president Donald Trump had vowed to slash during his four years in office — widened to $80.3bn in October, from $79.4bn in September, roughly in line with expectations.

UK's broadband plans diluted in national infrastructure strategy

Nic Fildes

Boris Johnson's election pledge a year ago to connect the UK to gigabit-speed broadband by 2025 has been watered down in the national infrastructure strategy unveiled on Wednesday by his chancellor.

The plan is for the government to work with industry to "get a minimum of 85 per cent gigabit capable coverage by 2025, but will seek to accelerate roll-out further to get as close to 100 per cent as possible".

That chimed with spending figures showing that £1.2bn of the already announced £5bn fund to expand full-fibre networks into rural areas would be spent by 2025 but only £100m in subsidy would be spent in the 2021-2022 period.

The feasibility of hitting the 100 per cent target by 2025 has been questioned in recent months by industry executives because of the slow pace of progress in detailing the plan for the £5bn fund.

The government said that a third of UK homes and businesses can connect to gigabit-speed broadband today, up from 9 per cent when it took office last year. That reflects a major upgrade in Virgin Media's network and a faster introduction of new lines by BT's Openreach.

US goods trade deficit widens in October

James Politi in Washington and Mamta Badkar in New York

The US goods trade deficit swelled last month as a recovery in domestic demand has driven imports back above pre-crisis levels.

The trade gap, which US president Donald Trump had vowed to slash during his four years in office, widened to $80.3bn in October, from $79.4bn in September, roughly in line with expectations, the Department of Commerce said on Wednesday.

Exports rose 2.8 per cent month-on-month to $126bn, while imports grew 2.2 per cent to $206.3bn, the report showed.

"Overall, the deficit has been broadly steady in recent months, with the recovery in global manufacturing boosting exports, while imports have been pushed up by the strength of US demand for capital goods, consumer goods, and vehicles," said Ian Shepherdson, economist at Pantheon Macroeconomics. He added that trade could be "a small drag" on growth in the final three months of the year.

Iran's health official pins hopes on lockdown stemming Covid death rise

Najmeh Bozorgmehr in Tehran

Iran hopes the partial lockdown that is in its fifth day will help prevent the number of Covid-19 deaths from hitting a projected 850 a day in December, which would be about double the latest figures.

“Our first priority now is not to let these deaths predicted by Iranian and foreign academic circles happen,” Kianush Jahanpur, in charge of the health ministry’s public relations, told the Financial Times. “Under the pandemic, we have gone very close to critical thresholds a couple of times but never fallen into a [major] crisis. Hopefully, this time it won’t happen, either.”

Iran has the highest coronavirus death rate in the Middle East, hitting a total of 46,207 by Wednesday afternoon, while the daily figure has been above 400 since last month. The tighter Covid-19 restrictions came into effect on Saturday.

The Islamic republic says other regional countries either lack a developed health sector or hide figures to minimise the pandemic’s impact on their business and tourism sectors.

Official Covid-19 death figures are not too different from the average deaths in western countries, Mr Jahanpur said.

Iran will keep many of its restrictions in the coming months, which have been largely observed despite violations by businesses and workers who struggle to make ends meet, he said.

“It will take up to 10 days for us to see the impacts of the new restrictions on daily coronavirus cases and at least four weeks on fatalities,” he said.

Local media reports that hospitals are running out of capacity only applied to about one-fourth of the total 127,000 hospital beds that have been designated for coronavirus patients in the worst days, he said.

“We give warnings to people as a preventive measure whenever we get close to the red line like nowadays,” he said.

Swedish life expectancy set for steepest fall since second world war

Richard Milne, Nordic and Baltic Correspondent

Sweden's life expectancy is expected to fall this year by the biggest amount since the second world war as Covid-19 deaths take their toll.

The average lifespan of women is set to fall from 84.7 years in 2019 to 84.4 years in 2020 and could go as low as 84.1 if more deaths occur in the final three months of this year. The figures for men are due to fall from 81.3 years in 2019 to 80.8 this year, and 80.4 years in the more severe scenario, according to Sweden's statistics agency.

That would mark the biggest drop between two years since 1944, higher than a fall of about 0.3 years in 1960.

Sweden has one of the highest death rates per capita from Covid-19 in Europe after being the only country on the continent aside from Belarus not to impose a formal lockdown. Its public health agency in part justified the move by saying Sweden would be largely spared from a second wave, but deaths are rising again in the country.

Sweden has reported 330 Covid-19 deaths in the past eight days, more than neighbouring Norway, which has about half the population, has reported during the entire pandemic.

UK business groups criticise job support measures

Valentina Romei

Business groups said the measures announced by UK chancellor Rishi Sunak in his spending review on Wednesday did not do enough to support jobs, with a number of them criticising the government for not reducing employment costs.

The spending review outlined the impact of the pandemic on the UK economy and the government finances. It included a £2.9bn restart programme to help 1m unemployed people to find work, and £1.4bn to increase capacity in job centres.

But some businesses said the measures fell short of what is needed.

The Office for Budget Responsibility, the UK fiscal watchdog, forecast that the UK unemployment rate will rise to 7.5 per cent in the spring, as some of the existing job support schemes are withdrawn.

Jonathan Geldart, director-general of the Institute of Directors, a business organisation said: “The Restart Scheme is undoubtedly a welcome measure, but it only addresses one half of the challenge. To counter the rise in unemployment, the Treasury also needs to boost job creation, and it missed a trick by not combining the scheme with a cut to employers’ National Insurance contributions”.

Neil Carberry, chief executive of the Recruitment & Employment Confederation, said: “Reducing employers’ National Insurance would also have incentivised job creation."

Charlotte Alldritt, director at the Centre for Progressive Policy, a think-tank said: “A focus on building roads, housing and green energy will not be enough. Greater emphasis still needs to go on broader and more flexible skills training, as well as supporting parents — especially women, who are more likely to have lost their jobs during the pandemic so far — in accessing appropriate skills and local job opportunities”.

New York reports more than 6,000 new cases for first time in seven months

Peter Wells in New York

New York on Wednesday reported more than 6,000 coronavirus cases in a single day for the first time in seven months.

A further 6,265 people tested positive over the past 24 hours, Governor Andrew Cuomo revealed at a press conference this morning, up from 4,881 on Tuesday.

It was the biggest one-day jump in cases since April 25, when authorities logged 10,553 infections and the state and its neighbours in the northeast were being hit hard in the early phase of the pandemic. 

New York, like nearly every other state in the US, has experienced a surge in its daily case rate this month. While some of this may be a result of increased testing, rising hospitalisations and death rates suggest coronavirus has spread more broadly around the country during this latest phase of the pandemic.

Over the past week, New York has averaged about 5,600 new cases a day, the highest rate since late April. The state set a record seven-day average of 9,664 a day on April 10, and brought this to a five-month low of 591 by late August.

Mr Cuomo has warned of a "tremendous spike" in cases after Thanksgiving and said "you'll start to see this maybe seven days after" the public holiday on Thursday. 

"We have to prioritise hospital beds. We have to make sure we don't overwhelm hospitals," he said. The governor added that officials would begin putting together a "winter plan" that included targeting hospitalisation rates to better monitor developments and allocate resources in the zones determined by the state's coronavirus micro-cluster strategy.

A further 41 deaths in the state were attributed to coronavirus, while 2,982 people are currently in New York hospitals being treated for coronavirus. Both those metrics are well below the record levels the state set in April.

UK pub industry calls upon PM for more financial assistance

Alice Hancock in New York

The UK pub industry has outlined the desperate straits they face over the Christmas period in a letter to the prime minister that calls for the immediate publication of evidence of the virus spreading in pubs and for more financial support.

The letter, which is being sent to Downing Street on Wednesday evening, is signed by the British Beer and Pub Association alongside the majority of the UK's large pub groups.

It warns that if two-thirds of England fall into areas of stricter restrictions coming out of lockdown, almost half of the UK's pubs could be forced to close, putting a quarter of a million jobs at risk.

"Heading into what would have been our most valuable trading period, thousands of businesses are now facing total failure," the letter said, going on to add that evidence of the virus's spread in hospitality venues should be published immediately.

"We cannot stand idly by and allow these measures to destroy our businesses," it went on, calling for a minimum of £3,000 of support per pub.

This week, the government announced its plan for emerging from a month-long lockdown that involves a regional approach. Pubs in areas under tier two or tier three restrictions will either have to close or will only be able to serve alcohol with a "substantial meal".

It also said that different households would not be able to mix in pubs and restaurants over Christmas, ending industry hopes that it could recoup some lost trade over the festive period.

Turkey reveals full daily case data for first time in months

Laura Pitel in Ankara

Turkey is in the midst of a severe resurgence of coronavirus, the country’s health minister has confirmed as he announced a full figure for confirmed new daily cases after months of opacity.

Health minister Fahrettin Koca said in a press conference on Wednesday that authorities had identified 28,351 confirmed cases of the virus in the past 24 hours.

The revelation follows months of obfuscation over the true scale of the outbreak in the country of 83m people. Mr Koca admitted in September that Turkey was excluding asymptomatic cases from its daily tally since July — a decision that was criticised by the World Health Organization.

The new data puts Turkey’s outbreak among the largest reported in the world in terms of new daily cases, according to Johns Hopkins University data, after the US, India and Brazil.

Turkish medical groups and opposition parties had issued increasingly vocal warnings about the spread of coronavirus in recent weeks, with the mayor of opposition-controlled Istanbul warning that the disease was “out of control” in his city.

President Recep Tayyip Erdogan, who had been seeking to avoid new restrictions that could hurt the country’s fragile economy, last week caved to pressure to take new steps to curb the spread of the virus. He announced the closure of restaurants and cafes, along with an evening curfew at weekends.

Mr Koca rejected claims by the opposition that the country was under-reporting coronavirus deaths. He said that Wednesday’s death toll of 168 was Turkey’s highest daily recorded figure since the pandemic began. “If the cause of death is Covid, Covid is written [on the death certificate],” he said.

ExxonMobil to axe 300 jobs in Canada

Derek Brower in London

ExxonMobil said it will sack up to 300 workers at its Canadian affiliates, including oil sands producer Imperial Oil, as it continues to reduce costs in the wake of the coronavirus-led crash this year.

“The impact of Covid-19 on the demand for ExxonMobil’s products has increased the urgency of the efficiency work,” the company said in a statement. The job losses would happen at Imperial and other local units. Canada’s heavy oil industry has been hit especially hard by the price crash and Imperial’s over-budget Kearl project in the oil sands has been a constant drag on Exxon’s business.

Exxon last month reported its third straight quarterly loss, but said it was on target to reduce capital expenditure this year by a third, to $23bn. It also said it would cut capex by another third next year and that assets with values of up to $30bn were at risk of writedowns as it carries out a portfolio review in the coming months.

The company previously said it would reduce its 75,000-strong global workforce by 15 per cent by end-2022 and has already announced a reduction of 1,600 in Europe.

Fed officials ready to change bond-buying if circumstances change

James Politi in Washington and Colby Smith in New York

Federal Reserve officials signalled they were ready to make changes to their asset purchase programme if circumstances shifted, leaving the door open for new action, but ruling out any immediate steps, during their last policy meeting.

“While participants judged that immediate adjustments to the pace and composition of asset purchases were not necessary, they recognised that circumstances could shift to warrant such adjustments,” according to the minutes of November’s Federal Open Market Committee meeting. “Accordingly, participants saw the ongoing careful consideration of potential next steps for enhancing the Committee’s guidance for its asset purchases as appropriate.”

The minutes indicated that “many participants judged that the Committee might want to enhance its guidance for asset purchases fairly soon”, while a “few” were “hesitant” to make changes in the near-term. The sceptics cited the “considerable uncertainty about the economic outlook and the appropriate use of balance sheet policies given that uncertainty”.

“Several participants noted the possibility that there may be limits to the amount of additional accommodation that could be provided through increases in the Federal Reserve’s asset holdings in light of the low level of longer-term yields, and they expressed concerns that a significant expansion in asset holdings could have unintended consequences,” the minutes said.

California shatters daily record with more than 18,000 new cases

Peter Wells in New York

California reported more than 18,000 new coronavirus cases on Wednesday, the biggest one-day increase of any state during the pandemic.

A further 18,350 people in the most populous US state tested positive, its health department revealed this afternoon, up from 15,329 on Tuesday.

The latest increase soars past its previous record from Saturday of 15,442 as well as the biggest jumps in Florida, Texas and Illinois.

Adjusted for population, the roughly 46 new cases per 100,000 people on the day, ranks among the bottom half of US states.

The record jump came from 168,988 tests reported, down from Tuesday’s record volume of 283,819, and below the statevs 14-day average of about 192,000. This pushed the 14-day positivity rate to 5.9 per cent, a three-month high.

Authorities attributed a further 106 deaths to coronavirus, up from 43 on Tuesday and compared with 61 on Wednesday last week. Today’s increase matches that of November 19, which was the biggest one-day rise in fatalities since late October.

The number of people currently in California hospitals being treated for coronavirus rose to 7,049, an increase of 408 over the past 24 hours and to the highest level since early August.

The recent surge in cases and hospitalisations in California prompted Governor Gavin Newsom to impose a curfew, which went into effect on November 21, that restricts late-night activities in the state’s coronavirus hotspots for the next four weeks. The designated hotspots cover 94 per cent of the state’s nearly 40m residents.

Biden urges Americans to forgo Thanksgiving traditions to combat pandemic

Courtney Weaver in Washington

President-elect Joe Biden urged Americans to forgo their traditional Thanksgiving customs during the pandemic, warning of the dangers of coronavirus “fatigue” among those chafing at lockdowns and social restrictions just as the country prepared to turn the corner with a vaccine.

“This is the moment where we need to steel our spines, redouble our efforts and recommit ourselves to the fight,” Mr Biden said in a Thanksgiving speech in Wilmington, Delaware on Wednesday, one day before the US holiday.

“This year we’re asking many Americans to forgo so many of the traditions that have long made this holiday so special,” he added. Mr Biden said he would be celebrating Thanksgiving with just his wife, his daughter Ashley and his son-in-law rather than traveling with the entire extended family — a tradition they had kept almost every year for the past four decades.

He said: “We have to try to slow the growth of the virus. We owe that to the doctors, the nurses, and the other front-line healthcare workers… and we owe it to one another. It’s literally our patriotic duty as Americans.”

Mr Biden promised that “starting on day one of his presidency”, the federal government would take steps “that will change the course of the disease”, specifically increasing testing, increasing the amount of protective gear for businesses and schools, and offering clearer guidance for businesses and schools so that more could re-open.

“The federal government has vast powers to combat this virus,” he said, adding he expected immunisations to begin by December or January.

“There is real hope, tangible hope. So hang on. Don’t let yourself surrender to the fatigue … You will get your lives back. Life is going to return to normal,” Mr Biden promised.

US stocks retreat from record high after jobs data

Naomi Rovnick, Alice Woodhouse and David Carnevali

Wall Street slid from record highs on Wednesday after the US had its first back-to-back increases in weekly jobless claims since July and a cautious appraisal on the health of the UK economy.

The S&P 500 pulled back from Tuesday’s record high, sliding 0.2 per cent after an unexpected jump in US unemployment claims suggested spiralling coronavirus cases and local shutdowns had delivered a further blow to the US economy.

The technology-focused Nasdaq Composite — which has typically outperformed on days when the risks to the economy are front and centre — edged up 0.5 per cent.

A rise in first-time unemployment claims to 778,000 last week was “discouraging”, said Michelle Meyers, head of US economics at Bank of America, noting it was a second consecutive week of increased claims in a labour market that has been “quite resilient” overall.

The subdued sentiment continued after the Federal Reserve released minutes of its past monetary meeting. “The bottom line [from the minutes] is that they [the Fed] have to remain accommodative and were very careful not to seem less accommodative,” said Steve Sosnick, Interactive Brokers chief strategist, after the minutes showed officials discussed enhancing the central bank’s guidance on buying bonds.

Markets would ultimately be looking to the US government, instead of the central bank, to provide further support to the economy, said Peter Dixon, global economist at Commerzbank.

Germany to extend partial shutdown of economy until December 20

Guy Chazan in Berlin

Angela Merkel and the leaders of Germany’s 16 states have decided to extend the partial shutdown imposed for the month of November until December 20, saying more needed to be done to bring the coronavirus pandemic under control.

In a government order agreed late on Wednesday evening, the leaders agreed to keep all restaurants, bars, theatres and gyms closed until late next month and to extend the ban on domestic tourism. Schools and most businesses will continue to function as normal.

A government scheme to compensate businesses affected by the “lockdown-lite” imposed at the start of November, which allowed them to claim 75 per cent of their normal monthly revenue, will be extended into December.

A statement said the November lockdown had succeeded in stopping the exponential growth in coronavirus infections and flattening the curve. But the number of cases was still too high: on November 20 a new daily record of 23,648 infections was recorded by the Robert Koch Institute, Germany’s main public health authority.

The order agreed on Wednesday evening also imposed further contact restrictions. Masks must now be worn in front of shops as well as in them. Smaller shops can only admit up to one person per 10 square metres of retail space, and larger ones one person per 20 square metres.

Districts that have succeeded in reducing the rate of new infections to 50 per 100,000 people within seven days will be able to deviate from the new rules.

The leaders also agreed that from December 1, social gatherings will be restricted to a maximum of five people from up to two households. This rule will, however, be relaxed from December 23 till January 1, when up to 10 people can come together socially. People will be urged to reduce all social contact to an absolute minimum for five-seven days before family get-togethers at Christmas.

People will be obliged to wear masks at work and in busy public areas, as will children at school from the age of 13. Universities will have to switch to digital learning. New Year’s Eve firework displays in crowded streets and public squares will be banned.

Coronavirus case rates in the Midwest are down from their peaks

Peter Wells in New York

Warnings on the spread of coronavirus from health experts and public officials — not to mention tighter restrictions on businesses and gatherings — have come thick and fast in the lead-up to Thanksgiving. But if there is one glimmer of hope before the holiday, it is that daily case rates in some parts of the Midwest have started to decline.

The region has been the hardest hit during this latest phase of the pandemic and experienced a surge in cases and hospitalisations during the autumn.

Adjusted for population, all 12 Midwest states have, this month, set a peak seven-day average of cases that eclipsed the worst rates experienced in places such as New York, Florida and Arizona during earlier phases of the crisis. Five of these states are still averaging more than 100 new cases per 100,000 people a day.

In recent days, though, there have been signs of reprieve. The Midwest has averaged about 60,000 new cases a day over the past week, according to a Financial Times analysis of data on Tuesday from the Covid Tracking Project, down from a record rate of 62,817 on November 19. Every other main geographic region in the US — the northeast, south and west, as defined by the Census Bureau — reached a record case rate this week.

Ohio was the only Midwest state that had its seven-day average of cases hit a record of about 8,500 a day on Tuesday, according to an FT analysis of CTP data. Iowa, South Dakota, Nebraska, North Dakota, Illinois and Wisconsin all have daily case rates that are down at least 10 per cent from peak levels earlier this month.

In another optimistic development, the seven-day average for cases was below the 14-day average in all but three of the region’s states — Indiana, Kansas and Ohio. Shorter-term trends falling below longer-term rates may reflect a slowdown in the virus’s spread.

Furthermore, South Dakota and North Dakota — where population-adjusted rates for cases, hospitalisations and fatalities rank among the worst experienced by any state during the pandemic — both had their seven-day rates fall below their 28-day average in the past few days for the first time since before their autumn outbreaks. Iowa has done the same. 

Signs also exist of an improvement with regard to hospitalisations in the region. All 12 Midwest states reached record levels of coronavirus hospitalisations this month, but just four — Indiana, Michigan, Minnesota and Ohio — did so on Tuesday.

Deaths lag behind cases and hospitalisations, and it may be too early to tell how much further fatality rates in the Midwest have to go. Over the past week, about 543 people a day have died from coronavirus across the Midwest, a record. That is one fewer than the average death rate in the more populous south and compares to a national average of 1,517 fatalities a day, which is the highest since mid-May.

Illinois, Wisconsin, Minnesota, Ohio, Missouri, Kansas, South Dakota and Nebraska on Tuesday had their highest average death rates of the pandemic.

Health experts and public officials have warned that infections could surge again after Thanksgiving, a time traditionally known for travel and socialising.

Texas reports daily record of more than 14,000 new Covid cases

Peter Wells in New York

Texas reported more than 14,600 new coronavirus cases on Wednesday, a record jump for the second-day running, and 200 deaths.

A further 14,648 people tested positive, authorities revealed this afternoon, more than the previous one-day record set on Tuesday of 13,998. Additionally, the health department revealed 961 historical cases stemming from backlogs of lab tests, including 771 from the region around Houston, to the statewide total.

That took the total number of confirmed cases in Texas since the start of the pandemic to 1.13m, second only to the 1.14m in California, which also reported a record jump in cases today.

Texas attributed a further 200 deaths to coronavirus, up from 162 yesterday and compared with 187 on Wednesday last week. The state reported 230 fatalities on November 19, which was the biggest one-day jump since late August.

Over the past week, Texas has reported an average of 152 deaths a day, the highest rate since the start of September. The state’s overall death toll, at 20,950, is second only to New York.

About 8,585 people are in Texas hospitals being treated for coronavirus, an increase of 90 over the past 24 hours. That is the highest level of hospitalisations since August 4.

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