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06 August 2021

‘Pingdemic’ Setback Hampers Reopened Economy

With the majority of COVID-19 restrictions in England lifted and numbers of Coronavirus cases, hospitalisations and deaths significantly lower than their January 2021 peaks, both businesses and consumers are returning to some form of normality.

The vast majority of businesses are now able to reopen after a long wait, with sectors such as hospitality, nightlife and live entertainment sectors able to host weddings, club nights and concerts without the capacity limits seen during lockdown.

The full reopening of businesses in these sectors, some of which have been closed since March 2020, has been long-awaited and comes after months of fears that many businesses would disappear altogether. However, although these sectors are now open for business, they are not out of the woods quite yet.

The reopening has led to a number of problems including a staffing shortage, with the BBC reporting that the number of permanent job vacancies available in June in England rose at its fastest level since 1997.

Although there was a jobs boom as dormant industries reopened, the availability of workers hit a 24-year low. To compound the impact of a lack of workers, companies are now being hit by the ‘pingdemic’ – large numbers of people being instructed to isolate by the NHS Covid-19 app.

During the week commencing 19th July, a record 690,129 people were told to self-isolate by the app. Over two million people were told to self-isolate in the month of July which, just as restrictions have been lifted, has had a dramatic effect on businesses and their abilities to operate at full capacity. Since then, however, there has been a 43% fall in people pinged.

In recent weeks, some businesses have been forced to close temporarily due to staff shortages, including supermarket chain Iceland and pub chain Greene King, while BBC News cancelled some of its regional morning news programmes due to the lack of availability of staff.

Iceland reported that, despite keeping all of its stores open during lockdown, some had now been forced to close as some 1,000 staff were unavailable to work in July. Similarly, Greene King temporarily closed 33 of its pubs in July due to the number of staff self-isolating.

“The great irony is that we're now all getting vaccinated,” Iceland Chief Executive Richard Walker told the BBC. Meanwhile, the availability of basic goods in the UK has also been under threat due to the pingdemic.

The UK Major Ports Group (UKMPG), which represents Felixstowe, the Port of Liverpool and Southampton, among others, noted that 10% of staff were self-isolating at some ports. The self-isolation of staff is “one of the most significant threats to ports’ resilience in recent years,” the Group said.

As social distancing restrictions were lifted it may have been seen as inevitable that more people would be asked to isolate but, now, the number is already falling in line with the falling number of cases. The NHS app has now been tweaked to reduce the number of pings sent out, but, after almost 18 months of significant disruption, the pingdemic setback is far from ideal.

Please note that investments and income arising from them can fall as well as rise in value. This communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned.
‘Pingdemic’ Setback Hampers Reopened Economy
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