AS I SEE IT: The new Covid variant is a test for both economic policy and public behaviour, says TERRY MURDEN
‘Everybody has a plan until you’re punched in the face’. So said former heavyweight boxing champion Mike Tyson. His quip was recalled last week by the Bank of England’s chief economist Huw Pill, noting that the latest strain of Covid sweeping around the world, together with further lockdowns, is playing havoc with forecasts and decision making.
The Bank had been widely expected to lift interest rates at its next meeting to tame rising prices, but the Omicron variant may have made the Bank’s decision a little easier as wary consumers ease up on spending and travelling.
Any rate rise may now be pushed into the new year by which time we should know a little more about the impact of the super-variant. Omicron also achieved what US President Joe Biden’s release of oil reserves failed to do, by forcing down the price of oil.
Inevitably, investor focus this week will be on the battle to contain and control Omicron and its potential impact on a recovery that was only just picking up steam. Opinion is divided among those who fear another bear market and the more optimistic who believe the world will cope, having built stronger defences over the last 20 months. Even the big pharmaceuticals companies say they can ‘tweak’ existing vaccines to work effectively against Omicron, which may help put a floor under Friday’s 3.6% fall in the FTSE 100.
This offers hope, particularly to retailers and the travel and hospitality trades who are already approaching the most important part of the year with some nervousness. The public and employers alike remain undecided and divided over the wisdom of group gatherings. Consumers piled into shops on Friday, fans were packed in football stadiums, yet office Christmas parties and school nativity plays are being cancelled.
How certain, therefore, can we be that any surveys and predictions will be anywhere near accurate and provide a basis for making plans? At this rate Mr Pill will be living up to his name and reaching for the drugs cabinet.
At least Boris Johnson has responded more quickly this time, perhaps having learned from the costly dithering at the outset of the pandemic that allowed Covid to spread so quickly.
Getting the message right and communicating it effectively is absolutely key and it is now time for a co-ordinated and uniform UK roll-out of any measures to replace the disjointed devolved response that has created confusion among the public while the respective governments imagine that the virus somehow behaves differently once it crosses various borders. In other countries, at least there is one universal message issued by the state through the media. Here, we have BBC and ITV, together with the London media, emphasising what is happening in England. Listen carefully and you’ll find the rules don’t apply elsewhere in the UK.
This is not helpful. Having decisions delegated to Edinburgh, Belfast and Cardiff has never made much sense. Why not also delegate policy to Manchester, Birmingham and Plymouth? It’s because politicians who have devolved power and claim to be putting medical evidence first really want to play politics in their own domains.
This nonsense has contributed to delays in introducing new measures in Scotland while the Scottish government conjured up needless Scottish names and rules for Westminster’s various Covid programmes to suit its “other” political agenda.
Sadly, Mr Johnson undermines the case for a UK-wide response through his generally woeful tactics, not least a lack of clarity over the rules and the timetable for their introduction.
No wonder the public, armed with conflicting advice from Westminster, Edinburgh, Belfast and Cardiff have decided to interpret the rules to suit themselves, an outcome that has left us dangerously exposed to those who refuse to tolerate any impositions on their lifestyle.
Omicron may have tamed inflation, including rising oil prices, and reminded us of the dangers of unfettered travel, but it will struggle to control the behaviour of an intolerant public whose willingness to accept more restrictions is being sorely tested, especially if they are confused by ever-changing guidelines and, in any case, can ignore them with apparent impunity.
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business