The Government’s decision to extend the full furlough through to the end of March 2021 and the Bank of England’s additional £150billion in quantitative easing (to spur spending and investment) surprised many commentators.
It followed the announcement by Prime Minister Boris Johnson that England would enter a second national lockdown during the month of November to help combat the surge in Covid-19 cases with the resulting impact on the NHS.
Chancellor Rishi Sunak has reacted to ensure that as many businesses and jobs as possible can be protected in the face of the continuing struggle with the pandemic.
While some businesses and many thousands of jobs have, unfortunately, been lost this year, the damage is not so far as bad as many forecasters thought it might be.
Undoubtedly, the many billions of pounds of support provided by the Government has helped to prevent companies from pulling the plug.
There is, however, serious concern in some of the sectors worst hit – such as bricks and mortar retail and hospitality – that there is a need to start trading again when the current lockdown ends so that the peak Christmas season is not lost in its entirety.
The hope remains that a vaccine for the virus is ready for mass use sooner rather than later, something that received a spur this week with the exciting news that preliminary analysis by Pfizer had indicated that its vaccine was 90% effective. Pfizer’s own shares immediately leapt by 14% and the FTSE100 by 5%.
While it is unlikely to be the ‘silver bullet’ that will see the markets soar to pre-Coronavirus levels, it is likely to support the gradual recovery as confidence returns in the UK and globally.
Further, prolonged delays lasting deep into next year are likely to lead to longer-term structural problems in the world’s economy, something everyone is keen to avoid.
As things stand, client portfolios have continued to hold up well, emphasising once again the importance of long-term, diversified, balanced financial plans with a global outlook. It is about the power of planning rather than reacting to individual events.