Thread by @KellerZoe

With vaccinations underway, the UK should be able to start dialling down restrictions from mid-February and will break free from economic Covid long before the EU

telegraph.co.uk/business/2021/…

Once British care home residents and the over-80s are vaccinated, 2/3 of potential Covid deaths will be covered. That will come into view within ten days. It validates the Govt strategy: break-neck speed vaccination rather than the EU precautionary policy of dotting every 'i'.

Some 88% of avoidable deaths will be covered by the time we reach the mid-February target of 13m vaccinations, in principle saving 55,600 lives. These include all the over-70s and the clinically extremely vulnerable, as well as frontline health and social care workers.

Needless to say, this is a theoretical model. Some will refuse a jab, although UK acceptance and trust in scientists is the highest of any major country in the developed West.

Whether the efficacy rate of the Oxford-AstraZeneca jab is 70% or 80% is a distraction. Not a single volunteer in the group’s clinical trials died or became critically-ill from Covid. For all intents and purposes, the vaccine has 100% efficacy against mortality.

We are about to go through a lacerating phase where the picture keeps getting worse (the death toll will keep rising mechanically into late January). Yet things will be improving very fast, changing dramatically at the beginning of Feb, as vaccinations pull-down mortality ratio.

As the UK will become the first major Western state to approach herd immunity among the vulnerable, clearing the way for post-Covid social and economic revival. Behind the scenes, the policy debate has already moved on the exit strategy. The exit is what now matters for markets.

The new conflict is between those pushing for eradication and those arguing that the greater public good is to end coercive restrictions and open up the economy as soon as we reach tolerable levels of immunity.

The world is splitting into eliminators (East Asia, Australia, New Zealand) and suppressors (Americas, Europe, and above all the UK). Acceptance for social repression will drain away in the West “when mortalities from Covid 19 start to resemble influenza in a typical year.”

The same split is going on internally within the UK. Devi Sridhar, Edinburgh professor of global public health, is leading the push for elimination, arguing that there is “no acceptable level of infection” and that we must keep tight controls in place for most of this year.

But there comes a point when zero-risk does more harm than good. You cannot keep nations shut once 88% of potential deaths have been averted. Even harder to justify doing so once the over-60s have been vaccinated and the figure rises to 97%, which should be done by early March.

Trial data shows protection largely gained within 10 days of the first jab, which means the top 4 priority groups are largely safe by Feb 25. As it will take a couple of weeks for infections to pick up again after this lockdown, the Govt’s plan for mid-Feb looks well-calibrated.

Assuming that the worst is averted, prepare for a surge of pent-up investment and a robust rally in sterling. The pound has not seen a relief bounce against the euro since the Brexit deal.

The drama over exploding B117 variant has obscured the more relevant market story of an early, fast, and extremely successful roll-out of the vaccine. The UK has gained a potential lead of two months over the EU painfully slow start and shortage of doses.

This almost guarantees rolling lockdowns and curfews deep into the spring. Most EU governments are still in denial about this: they do not have a handle on the extent of the B117 variant in their countries, or other variants, since most of them do almost no genomic sequencing.

Moody's warned credit standing of EU states is now a function of how they manage the Covid next stage. Public debt levels already in red zone in Greece, Italy, Portugal, Spain, France, and Belgium, but so is private debt in some countries (exploded to near 350% of GDP in France).

This is being masked for now by the bond purchases of the ECB but that is not politically or constitutionally tenable over time. In short, the cost of letting this pandemic run for an extra quarter due to incompetence is likely to be exorbitant.

Berlin is in the dock for trying to secure adequate doses of its own home-grown BioNTech vaccine in order to save the lives of its own citizens. If you want to undermine German political consent for the European Project, you hardly find a better way.

We do not yet know exactly how bad the EU vaccine shortage is going to be. Some states have made such a mess of the roll-out that they are far from exhausting their doses. But Denmark is already running low after its fast start and forced to delay. Others are following.

The Pfizer doses are coming in dribs and drabs. The Moderna supplies are symbolic at this point. The EMA has not yet approved the Oxford-AstraZeneca vaccine. It will make a statement on Jan 29. The weeks slip by. The shape of UK and EU politics may look very different in a month.