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Latest news

  • The S&P 500 index opened up 0.7 per cent on Wall Street, setting it on track to register a fourth straight day of gains

  • The US has threatened to bar Chinese airlines unless American carriers are allowed back into China

  • The EU’s jobless rate rose to 6.6 per cent in April, from a 12-year low of 6.4 per cent the previous month

While much of Europe starts to open up for the summer, with the hope of sparking economic recovery now that Covid-19 cases are falling, the UK risks remaining behind. Home secretary Priti Patel prompted criticism from the travel and tourism industry and from senior conservative MPs when she confirmed on Wednesday that Britain would impose quarantine measures from next Monday and require travellers from abroad to self-isolate for 14 days.

The UK’s £22bn-a-year aviation industry has warned that this will add to the crisis that has already led airlines to seek emergency government loans to survive the near-universal collapse in air travel. The hospitality industry has said the measures could put 1.2m jobs at risk.

Jozsef Varadi, chief executive of Wizz Air, has called Britain’s determination to press ahead with quarantine for airline passengers pointless and unnecessarily “harsh”. He pointed out that many countries were exploring alternatives such as health certificates to prove travellers had been virus-free for 72 hours or more.

In other parts of the world, Singapore and China have established a bilateral arrangement that begins next week. Travellers must submit applications sponsored by government agencies or companies they are visiting in advance and take a test.

The UK home secretary has been urged to present the scientific evidence behind the quarantine. But the UK is not alone in struggling to find coherence in quarantine measures. As this Big Read explains, there isn’t much agreement over how to go about organising the isolation of arrivals.

Eugenia Tognotti, professor of history of medicine at Italy’s University of Sassari, said: “There has never been another time when such a large percentage of the global population has faced quarantine.” That has sparked human rights concerns and a confusing hodgepodge of travel rules. 

The British government has eased domestic lockdown measures and is keen to stress its global perspective. Yet for many countries further through the pandemic, incoming Britons pose a far greater risk than their own citizens travelling to the UK.

Markets

Saudi Arabia is set to unwind the extra oil production cuts it pledged last month now that it believes fresh order is returning to the market after the disarray caused by the Covid-19 crisis. With Brent crude prices rising from 18-year lows below $20 a barrel in April to about $40, Saudi Arabia is poised to bring back 1m b/d.

Long-dated US Treasury bonds have lost favour among investors, sending yields to their highest levels since March. Traders said the move reflected a stabilising economic outlook and the expectation that, while the Fed would continue to hold short-term Treasury yields low, it would be less aggressive in its interventions.

Anne Richards, chief executive of Fidelity International, is calling for reforms to encourage equity investments. Rather than hefting private liabilities on to public balance sheets, she says governments should give people the opportunity to own a real stake in the recovery through domestic sovereign wealth funds or retail investment products. She calls for eased regulation on insurers and changes to tax rules.

Business

French insurer Axa said it planned to pay a dividend to shareholders, defying the recommendations of regulators worried that the coronavirus crisis will leave the industry facing huge claims. Chief executive Thomas Buberl, who in April hit out at the confusion over dividend policy, defended its payout as “a balanced approach”.

Lufthansa has warned it will be forced to take “far-reaching restructuring measures” and drastically reduce costs, even after securing a €9bn bailout from the German government. It has grounded 700 of its 760 planes but still only expects to fly 40 per cent of its regular timetable in September. Tui, Europe’s largest tour operator, agreed €300m in compensation from Boeing for the grounding of the jet maker’s 737 Max fleet.

Poland — Europe’s biggest outsourcing and offshoring hub, and one of the world’s top five — is seeking to gain market share from India, where the chaotic coronavirus lockdown left many outsourcers scrambling to avoid outages as they switched to remote working. It has greater proximity to western markets, the EU’s legal and regulatory frameworks, a well-educated, multilingual workforce and good infrastructure.

Global economy

Are we heading into another Depression? We asked a variety of economists and analysts to share their vision of what lies ahead. Robert Zoellick, the former World Bank president, argued that there would be “fumbling fragmentation”; Mike Wilson, Morgan Stanley’s chief investment officer, said “a V-shaped recovery is on track”; and Erik Nielsen at UniCredit warned of “Europe’s biggest peacetime recession in nearly 100 years”.

Australia is facing its first recession in almost 30 years after bushfires and coronavirus caused the economy to contract during the first quarter. Gross domestic product fell 0.3 per cent in the three months to the end of March compared with the previous quarter. Josh Frydenberg, the country’s treasurer, said the small contraction in the face of a “one-in-100-year” global pandemic showed that the economy had been “remarkably resilient”.

Zambia, Africa’s second-biggest copper producer, has consistently deflected long-running concerns over the rapid growth of its $11bn external debt. But even before the pandemic, the government was struggling to keep up with payments on its Chinese loans and US dollar bonds. Now there is growing pressure to restructure. “The people who are going to be affected are the poor and the vulnerable,” said Trevor Simumba, an analyst.

Get in touch

How is your workplace dealing with the pandemic? And what do you think business and markets — and our daily lives — will look like after lockdown? Please tell us by emailing covid@ft.com. We may publish your contribution in an upcoming newsletter. Thanks

The essentials

In the US, there is concern that the proximity of demonstrators at widespread protests against racism in cities across the US could contribute to a rise in coronavirus cases. It is harder for people to stay 6ft apart — especially if protests turn violent — and while protesters may be younger and less vulnerable, they are also more likely to be African-Americans, who are almost twice as likely to die from Covid-19.

Chart of UK imports and exports by different food group showing that, with one exception, the UK is a net importer. The exception is beverages where there is a trade surplus largely generated by exports of scotch whisky

Disruptions from coronavirus have elevated the issue of food security globally. There is concern in the UK, where Brexit has highlighted the country’s dependency on agricultural imports and may impose a brutal transformation of the UK’s fragmented farming sector.

Bolivian researchers are seeking to understand why La Paz, the country’s capital that sits 3,600 metres above sea level, has suffered relatively few virus fatalities, while its low-lying second city — Santa Cruz — and the surrounding province have been hit hard. One theory is that those living at altitude have developed a resilience to the low levels of blood oxygen that the virus can cause.

Final thought

There is a lot of talk about how the global pandemic has made the office increasingly irrelevant. And the same may go for the suit. Any guess when you’ll wear one again? One of the renowned tailors from Savile Row — London’s made-to-measure suit mecca — is getting smart to the changing trend and launching a new line . . . of athleisure. It makes for some very stylish hoodies.

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