Will lockdown easing cause COVID concerns to rise?
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After a drop last week, the personal and family concern indices have risen again, by 5% and 12% respectively. Is the gradual easing of lockdown making UK trustees nervous?
The outbreak will be contained by October – unless there is a second peak
The expected minimum duration of the outbreak has decreased slightly, indicating that trustees think the outbreak may have subsided by October. But some respondents in our weekly survey find the information from the government and scientists conflicting. And with current lockdown rules not always followed, they are worried about the increased risk of spreading the virus.
Part of our research panel believe that the controversy around Dominic Cummings is speeding up the lifting of lockdown, despite a lack of evidence for the changing level of risk. The protests by the Black Lives Matter movement are seen as a further cause for concern, as social distancing is difficult to maintain during demonstrations.
Few have sent their children back to school
Only 6% of respondents who have children or grandchildren have been able to send them back to school. Not all schools have reopened yet, and even if they have, some parents and grandparents are taking a wait-and-see approach.
There is still no news when children and grandchildren in higher years will return to school, with some year-12 and A-level students having to postpone their further education plans. Only half of respondents who have (grand-) children say they have attended live online classes offered by their school.
28% have not attended any online classes at all. Not all schools have been able to offer online tutoring, which may broaden pre-existing inequalities between public and private schools.
A second peak will dampen economic optimism
The macro effects of lockdown are likely to last until at least Q1 2022, but this horizon has shortened somewhat compared with two weeks ago. Even if some say current equity valuations are completely divorced from economic reality, the rise in markets has made it possible to take profits, derisk and avail of opportunities.
But a potential second peak would cause another wave of economic and macro effects which would likely delay the recovery, point out some respondents. It is still not obvious how we can live with the virus, and concerns remain about long-term business prospects, low interest rates and structural changes in some sectors.
Are you worried about a second peak and its consequences? Click here to take next week’s survey.
Previous articles in this series:
- 03/06: COVID concerns at an all-time low – is the worst over?
- 27/05: Personal COVID concern subsides – but this may be a problem
- 20/05: UK pension trustees worry there may be no ‘going back’ after COVID
- 13/05: UK pension schemes don’t trust the lockdown exit strategy
- 06/05: Concerns over duration of COVID lockdown and macro effects intensify
- 29/04: Professional COVID concern spikes by 18% as trustees brace for a longer lockdown
- 22/04: Macro effects of COVID to last until 2022, with personal concerns up by 10%
- 15/04: COVID concerns fluctuate – there is no path to normalisation in sight
- 08/04: Although personal concerns subside, the magnitude of COVID’s economic impact remains unclear
- 01/04: COVID Concern Index subsides – have UK pensions schemes settled into the ‘new normal’?
- 25/03: mallowstreet Flash Insights: Rising levels of concern about COVID and a changing economy
- 23/03: mallowstreet Insights: Asset managers have shared their views on the economic impact of COVID-19, but what do pension funds think?
- 19/03: COVID-19: Government response divides pensions community
- 18/03: 96% of pension funds and trustees preparing for a long-term COVID-19 fallout
- 18/03: mallowstreet Flash Insights Report: COVID-19 – what’s on trustees’ minds
About the COVID Concern Index
This short weekly survey helps gauge sentiment of our community on the pandemic. The results are distributed each week via the community newsletter.
The COVID Concern Index values should be used as indication only and do not constitute advice. Their values are bound by the choices available in the survey on which they are based.
COVID Concern Index:
- 0 = respondents are not worried at all
- 100 = respondents are extremely worried
Expected minimum duration of outbreak:
- Lowest possible value = 1 month
- Highest possible value = 6 months
Expected minimum duration of macro effects:
A methodology change took place on 15/04/2020, affecting data from 21/04/2020 onwards.
Prior to 15/04/2020:
- Lowest possible value = 3 months
- Highest possible value = 12 months
- Lowest possible value = 3 months
- Highest possible value = 60 months
Concerned about the coronavirus outbreak and its macro implications? Click here to take part in the weekly COVID-19 survey.