Client Update - 21st July 2021

This week saw the much anticipated “Freedom Day” come, and go, without the fanfare that the UK Government were hoping for. It was somewhat ironic that our Prime Minister spent the day in isolation after the fully vaccinated Health Secretary tested positive for COVID after various meetings with key Government officials. These so called “vaccine breakthrough cases” (where you have had two jabs but still contract COVID), are a much lower percentage of overall COVID cases in the UK, but it is very reassuring to see the data showing that those in this category are significantly less likely to need hospitalisation or suffer severe symptoms. In addition, transmission from a fully vaccinated COVID patient is, we are told, much less likely. There is an interesting divide in efficacy between the Pfizer and Astra vaccines, with the Pfizer jab reducing symptomatic infection by 85-95%, compared to Astra at 70-85%. Hospitalisations after two Pfizer jabs are reduced by 90-99%, versus 80-99% for Astra.

This is evidently the plan in the UK, to vaccinate rapidly as many as possible, to release the population from lockdown to boost the economy and hope that hospitalisations and death rates do not rise significantly. So far, this appears to be the case. It certainly requires some active imagination to feel that the much discussed 100,000 COVID cases a day in the UK can be the new “normal” over the summer, but this is the current information we are being asked to digest and accept.

In our offices we have paused our full return to work whilst local cases of COVID increase and we have, I hope, shown over the last sixteen months, that we are able to provide our clients with a strong service despite being mainly remote working. We will continue to put the health of our clients and staff first, and we are very grateful for your ongoing support in this area.

The UK stock market certainly did not seem to take too kindly to “Freedom Day” as it fell by more than 2% as rising COVID cases threatened the continued recovery. We expect some short-term volatility to remain and we are comforted to see more settled markets today as we move through a volatile month or two with COVID infection rates on the rise.

Away from COVID, the UK Government could soon raise National Insurance contributions (NIC) by 1% to fund a £7bn shortfall in social care funding. Any hike would go against promises made by the Conservative party not to raise National Insurance contributions, VAT, or income tax in this Parliament. It would also have a direct impact on most workers' take-home pay. We expect to hear more on tax rises to try and fund the vast level of public debt over the coming months.

Ultimately, here in the UK, we continue to move forwards through the COVID pandemic, and the Government are taking a brave stance in continuing to be positive in relaxing measures whilst COVID infection rates continue to grow. From an investment point of view, we are very happy that our portfolios remain well diversified, and over the last few weeks slightly more defensively positioned for the summer. We still see plenty of value in the marketplace and our investment team are taking advantage of market opportunities as and when they arise.

For now, stay safe and well and please do let us know if you have any queries, at any time.