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UK economy suffers record 9.9% slump in 2020

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By David Milliken and William Schomberg

LONDON (Reuters) – Britain’s coronavirus-ravaged economy slumped by 9.9% in 2020, the biggest annual crash in output in more than 300 years, but it avoided heading back towards recession at the end of last year and looks to be on course for a recovery in 2021.

Official figures showed gross domestic product (GDP) grew 1.0% between October and December, at the top end of the range of forecasts by economists in a Reuters poll.

This makes it likely that Britain will escape two straight quarters of contraction – the standard definition of recession in Europe – even though the economy is set to shrink sharply in early 2021 due to the effects of a third COVID lockdown.

“As and when restrictions are eased, we continue to expect a vigorous rebound in the economy,” said Dean Turner, an economist at UBS Global Wealth Management.

Britain’s economy grew 1.2% in December alone, after a 2.3% fall in output in November when there was a partial lockdown, leaving output 6.3% lower than in February before the start of the pandemic, the Office for National Statistics said.

However the Bank of England forecasts the economy will shrink by 4% in the first three months of 2021 due to a new lockdown and Brexit disruption.

The central bank thinks it will take until early 2022 before it regains its pre-COVID size, assuming vaccination continues to smoothly. Many economists think it will take longer.

“Today’s figures show that the economy has experienced a serious shock as a result of the pandemic, which has been felt by countries around the world,” finance minister Rishi Sunak said.

Sunak, facing the heaviest borrowing since World War Two, will set out how much longer he intends to continue this emergency support at an annual budget on March 3.

HARDER HIT THAN MOST

Last year’s fall in output was the biggest since modern official records began after World War Two. Longer-running historical data hosted by the Bank of England suggest it was the biggest drop since 1709 when Britain suffered a ‘Great Frost’.

The fall is also steeper than almost any other big economy, though Spain – also hard-hit by the virus – suffered an 11% decline.

Britain has reported Europe’s highest death toll from COVID-19 and is among the world’s highest in terms of deaths per head.

Some of the damage also reflects how Britain’s economy typically relies more on face-to-face consumer services than other countries, as well as disruption to schooling and routine healthcare which few other countries factored in to GDP.

However, Britain has vaccinated many more people than other European countries so far, raising the prospect of a bounce-back for its economy later this year.

The BoE’s chief economist Andy Haldane said on Thursday that economic growth could hit double digits over the coming year because of households are sitting on enforced savings after spending so much time stuck at home.

Economists said Friday’s figures showed that Britain’s economy was proving more resilient to lockdowns than earlier in 2020.

“Damage from restrictions has diminished since the initial lockdown in the spring – and is more heavily concentrated in a few hard-hit, largely consumer-facing industries, hospitality being the main one,” ING economist James Smith said.

The impact of the pandemic has been highly uneven. Some sectors such as manufacturing showed output just 2.5% below year-ago levels in December, while the much larger services sector was 7.2% below.

Within the services sector, high-street retailers, pubs and restaurants have been hit especially hard.

But unemployment has risen much less than expected, largely due to government subsidies to keep people in work.

(Writing by David Milliken; Editing by Willian Schomberg, Guy Faulconbridge and Raissa Kasolowsky)

Source: – TheChronicleHerald.ca

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Canadian asset managers race to win bitcoin ETF gold rush

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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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Alberta sees budget deficit narrowing to C$18 billion as oil prices recover

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By Nia Williams

CALGARY, Alberta (Reuters) – The Canadian oil-producing province of Alberta on Thursday estimated its 2021/22 budget deficit will shrink to C$18.2 billion ($14.5 billion), as its economy starts to recover from the damage caused by the coronavirus pandemic.

Alberta’s 2020/21 deficit stood at C$20.2 billion, compared with a C$24.2 billion deficit projected in August, as recovering crude oil prices help the province narrow its deficit.

Still, the deficit is larger than the historical trend, reflecting the impact of pandemic spending.

Finance minister Travis Toews said Alberta will set aside C$1.25 billion in contingency funding to fight COVID-19. The province also plans to invest nearly C$21 billion over three years in construction projects to create new jobs and support economic recovery.

“Budget 2021 will provide funding … to ensure Albertans have a competitive edge, as economies reopen, growth restarts and opportunities reappear,” Toews said in his budget address.

Alberta is the centre of Canada’s fossil fuel industry, and oil and gas revenues generate much of the province’s economic activity and revenues. The energy industry was battered last year by a collapse in global fuel demand due to COVID-19, although commodity prices are picking up as vaccines are rolled out globally.

Alberta said its financial exposure from an investment in TC Energy’s Keystone XL pipeline, which would have shipped to the U.S. but had its permit revoked by President Joe Biden, was C$1.3 billion. The government said if the project does not proceed it will seek to recoup the funds.

Toews said Alberta’s real gross domestic product would grow 4.8% in 2020, having contracted 7.8% last year.

The United Conservative Party government expects the provincial economy to reach pre-pandemic levels by 2022 and said the deficit will shrink to C$11 billion in 2022/23 and C$8 billion in 2023/24.

Revenue for the 2021/22 fiscal year is estimated at C$43.7 billion, up from $42.3 billion in 2020/21. Total spending is expected to be down slightly at C$61.9 billion, from C$62.5 billion in the previous fiscal year.

Alberta forecast U.S. crude prices to average $46 per barrel in 2021/22.

(Reporting by Nia Williams; Editing by David Gregorio and Grant McCool)

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Left out? Israeli vaccine refuseniks fear exclusion as economy reopens – TheChronicleHerald.ca

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By Rami Ayyub and Steven Scheer

TEL AVIV (Reuters) – Israel has led the world in COVID-19 vaccinations. Now it faces another challenge that other countries will have to grapple with: how to balance public health and the rights of the unvaccinated.

Its decisions will affect every walk of life – from schools to work, and culture to worship.

Half of Israelis have received their first shot, and the country began reopening its economy this week after a year of lockdowns and remote working.

But several activities have been deemed off-limits to the unvaccinated, angering those who cannot get the jab for health reasons, or refuse it as a matter of principle.

Some employers already plan to ban unvaccinated workers from the office, which rights groups fear could cost them their jobs. Unions have suggested workarounds, such as COVID-19 tests every 72 hours.

“I’m already at peace with the fact that I won’t be invited to certain events or allowed into areas of entertainment,” said Hila Bar, a business owner who is sceptical of medical science and does not plan to get vaccinated.

“So I won’t go,” she said. “And I won’t patronise certain businesses either – not because I don’t want to, but they do not want my business.”

Israel, where the vaccine rollout is fast but not mandatory, is a world leader in inoculations. Other countries are likely to scrutinise its early experience to see how it addresses mostly unanswered questions about balancing individual rights with obligations to public health.

“Whoever does not get vaccinated will be left behind,” Health Minister Yuli Edelstein warned in recent weeks.

Edelstein has made clear that newly introduced perks for the vaccinated – including access to theatres, gyms, and resort areas along the Dead Sea – are incentives to get inoculated.

But some advocates and employers are concerned that parliament has not passed any new laws regulating workers’ return to offices or offering protections for the unvaccinated, saying it will force employers to devise their own rules.

Early discussions around guidelines and legislation point to employers, authorities and courts putting public health concerns before individuals’ demands.

Intel’s Mobileye unit, in Jerusalem, says unvaccinated workers will not be allowed to come to the office as of April 4, but can work from home if their assignment allows.

The company estimates around 10% of its 1,500 employees will not get vaccinated. If they must come to the office, they will need to provide a negative PCR test taken within the prior 48 hours.

“It is our responsibility to make our offices a safe place – the greater good of our employees and their families trumps any other consideration,” Chief Executive Amnon Shashua wrote to employees in an email seen by Reuters.

CIVIL RIGHTS

A landmark study released on Wednesday showed the Pfizer-BioNTech vaccine being used in Israel cut symptomatic cases among Israeli recipients by 94%.

But some officials privately estimate that 10% of Israelis over 16 – around 650,000 people – do not intend to get vaccinated.

Even asking employees to share their vaccine status could violate medical privacy rights, some advocates say, with potential ramifications for civil liberties that may eventually be challenged in Israeli courts.

“The question is how do we reopen the market, the economy, and life, without harming people that cannot or would not get vaccinated,” said Sharon Abraham-Weiss, executive director of the Association for Civil Rights in Israel (ACRI).

“It’s the vulnerable people, those that are not unionised, or temp (workers) or others who would bear the burden,” she said, while calling for legislation.

Business leaders have also called for new laws. The health ministry did not comment when asked if legislation offering job protection to the unvaccinated was being drawn up.

Some large trade groups have begun drafting policy guidelines for members, including the Manufacturers Association of Israel, which represents 1,800 companies employing almost half a million workers.

The group’s members are “not chasing people in the street to stick some syringes in their shoulders and force them to vaccinate,” though they are doing everything they can to encourage it, the group’s president, Ron Tomer, said.

But according to a legal opinion commissioned by the group and reviewed by Reuters, members may ask employees if they were vaccinated as a “safety measure” to prevent infecting others rather than as a request for personal medical information.

Employers should take reasonable steps to allow unvaccinated staff to work from home or in separate bubbles, but those who cannot do so can be sent on unpaid leave, or, as a last resort, fired, the opinion says.

“If you don’t want to take the injection, it’s OK … the employee (has a right) to protect his privacy. But on the other side there are rights of the public, the employers, the clients – the people that we give services (to),” the opinion’s author, prominent employment attorney Nachum Feinberg, told Reuters.

Offering a potential workaround, Israel’s largest labour union, Histadrut, suggested that unvaccinated workers who cannot work at home present negative coronavirus tests to their employers every 72 hours.

‘MATTER OF PUBLIC HEALTH’

Israel on Sunday launched a “Green Pass” system granting certain privileges to citizens who have had both doses of the vaccine or have recovered from COVID-19.

In one of its first real-life applications, only those carrying a government-validated certificate were allowed to attend a small open-air concert in Tel Aviv this week.

And parliament on Wednesday passed a law allowing the health ministry to give municipalities the names of residents who have not had a shot.

ACRI has opposed the legislation, arguing it violates privacy rights.

The law faculty at the Hebrew University of Jerusalem argued in a position paper that regulating vaccination “is a matter of public health, and not a private medical issue”.

Existing Israeli laws grant the health ministry the legal authority to impose restrictions on the unvaccinated, and even to obligate vaccination in certain cases, the position paper says.

“Those who fulfil their obligation to vaccinate should not be asked to bear the cost of others choosing not to,” said David Enoch, a professor in the philosophy of law at Hebrew University.

(Reporting by Rami Ayyub and Steven Scheer; Editing by Mike Collett-White)

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