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Not even the $900 billion stimulus could overpower headlines from yesterday such as: “U.K. Tightens Rules As A Variant Of The COVID-19 Virus Spreads.”
Sensationalism aside, here is what's known about the new strain of COVID-19 spreading in the U.K. that spooked global markets yesterday.
The World Holds Its Breath, Again
We’ll start with the bad news. Boris Johnson’s announcement that the new mutation is believed to be 70% more contagious than other strains led to a swift global response.
A growing list of countries including most of Europe, Canada, Colombia, Israel, Hong Kong, Morocco and India have closed their borders to travelers from the U.K.
The reaction from the financial markets was equally swift:
- The (European) regional Stoxx 600 index fell by 2.3%.
- The British Pound, which hit a 2-year high last week, fell as much as 2.4% against other major currencies before recovering late in the day.
- Airline stocks, fresh off a vaccine bump, were clipped across the globe with British Airways’ parent company falling 8%.
As of this morning, thousands of European truck drivers were stranded on the British side of the English Channel because of French border restrictions put in place on Sunday.
U.K. supermarkets warned they will run out of certain perishable goods by the end of the week if the trade route remains closed.
The (All Important) Nuance
Putting on our science caps for a minute.
The new strain of the virus, which is being called B.1.1.7, was first detected in mid-October by the Covid-19 Genomics UK Consortium. The samples were actually collected on Sept. 20 and 21, meaning B.1.1.7 has been circulating for months.
The variant has also been identified in Denmark (nine cases), Australia (two) and Italy, the Netherlands and Iceland (one each). Importantly, the UK is one of only a few countries actively sequencing COVID-19 to detect variants - and many scientists believe B.1.1.7 is already much more widespread.
But it's not all bad news. While there are certain traits in the mutation which suggest B.1.1.7 could be more transmissible, some leading scientists caution the spread of B.1.1.7 could be due to chance (as was the case with other mutations). And there is no evidence B.1.1.7 leads to more severe disease.
Vaccine Takeaway: This morning the CEO of BioNTech (which developed a vaccine with Pfizer) said he was "confident" that the vaccine works against the U.K. variant.