LONDON — The U.K. economy recorded its biggest contraction in more than three centuries in 2020, according to official estimates, highlighting the Covid-19 pandemic’s economic toll on a country that has also suffered one of the world’s deadliest outbreaks.
Though the country is grappling with a new, highly contagious variant of the coronavirus, Prime Minister Boris Johnson is hopeful that a rapid vaccination drive will permit a gradual reopening of the economy in the coming months, paving the way for a rapid rebound later in the year.
Gross domestic product shrank 9.9% over the year as a whole, the Office for National Statistics said Friday, the largest decline among the Group of Seven advanced economies. France’s economy shrank 8.3% and Italy’s contracted 8.8%, according to provisional estimates. German GDP declined 5%.
Britain’s economy was hit especially hard in the second quarter of the year as a nationwide lockdown took effect. Social distancing and the closure of restaurants, bars, hotels and theaters was painful for the British economy, where a higher share of national income is spent on recreation and similar services that require face-to-face contact than in other comparable economies.
The U.K. also kept restrictions on daily life and the economy in place for longer than some of its peers as it struggled to bring down Covid-19 case loads. The U.K. has suffered one of the worst Covid-19 outbreaks, with more than 120,000 deaths linked to the virus and at least four million people infected.
A resurgent epidemic in the fall, which scientists later discovered was fueled by a highly contagious variant of the virus that has since spread around the world, also hurt growth.
Friday’s data showed the economy nevertheless performed better than expected in the final quarter of the year, aided by government spending and business investment. The economy grew 1% in the final quarter of the year compared with the previous quarter, equivalent to an annualized growth rate of 4%, the ONS said.
The U.K. in January returned to lockdown in an effort to contain the spread of the new variant, which is expected to cause another contraction in the first three months of the year.
The vaccination drive has so far inoculated more than 13.5 million people, around a fifth of the population, with at least one dose. Mr. Johnson is due to set out plans for a phased reopening of the economy later this month.
The decline in U.K. GDP in 2020 was the largest in more than 300 years, according to Bank of England data, though the preliminary estimate is likely to be revised. BOE data shows the economy last recorded a comparable drop in 1921, when it shrank 9.7% during the depression that followed World War One. The economy recorded a bigger contraction, of 13%, in 1709, during an unusually cold winter known as the Great Frost.
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France's economy shrinks more than forecast – MarketWatch
The French economy’s contraction in the fourth quarter of 2020 was slightly more pronounced than previously estimated, data from the country’s statistics agency Insee showed Friday.
In the October-December period, gross domestic product shrank 1.4% from the previous quarter–0.1 percentage point more than the preliminary estimate of a 1.3% contraction released on Jan. 29.
GDP in the quarter contracted 4.9% from a year earlier, the data showed. The decline was 0.1 percentage point less than the 5% drop previously estimated.
The French economy–the eurozone’s second largest–is expected to contract again in the first quarter of 2021, as extended government restrictions to contain the coronavirus hinder economic activity.
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Canadian asset managers race to win bitcoin ETF gold rush
By Aaron Saldanha
(Reuters) – Asset managers in Canada have been rushing to launch physically settled Bitcoin exchange traded funds (ETF), aiming to capitalise on a new market opportunity, after the country became the first to approve such ETFs this month.
Canada has seen a spate of regulatory applications for Bitcoin ETF issuance, sparked by the launch of the Purpose Bitcoin ETF, the world’s first ETF physically settled in the cryptocurrency.
The Purpose ETF had a total asset value of about C$561.3 million ($449.8 million), as of Feb. 24, its manager told Reuters, and held about 9,647 bitcoins.
Purpose’s offering has stolen a march on the Evolve Bitcoin ETF, which was first traded just a day later. Evolve’s fund managed C$38.2 million, as of Wednesday.
Evolve on Wednesday axed https://evolveetfs.com/2021/02/evolve-reduces-management-fee-on-bitcoin-etf the ETFs management fee by a quarter to 0.75%, saying this made the offering the cheapest “bitcoin ETF currently available in the market.”
The ETFs provide advantage over the closed-ended funds that financial markets investors have usually employed as a way to gain Bitcoin exposure, including that the ETFs’ traded prices are unlikely to diverge by a considerable margin from the underlying portfolio values.
This gives them a strong edge over U.S.-listed investment vehicle Grayscale Bitcoin Trust and closed-end investment fund CI Galaxy Bitcoin Fund.
The front-runners in the Canadian bitcoin ETF race have been moving ahead with new offerings; exchange operator TMX Group on Tuesday began listing https://www.purposeinvest.com/thoughtful/options-trading-to-begin-for-purpose-bitcoin-etf options on Purpose’s ETF on the Montréal Exchange.
CI Financial last week filed for a preliminary prospectus for a Bitcoin ETF, working with diversified asset firm Galaxy Digital, commercial intelligence provider MarketLine reported https://finance.yahoo.com/news/ci-global-asset-management-files-161900526.html.
($1 = 1.2483 Canadian dollars)
(Reporting by Aaron Saldanha and Patturaja Murugaboopathy, Editing by Vidya Ranganathan and Shinjini Ganguli)
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