Policymakers step up restrictions ahead of verdict on Omicron

Good evening

Is Omicron more transmissible than previous variants? How effective are existing vaccines or previous infections at preventing its spread? And does it cause more severe disease?

As our Big Read explains, scientists around the world are scrambling to find answers, but what should the response of policymakers be in the meantime?

Although Omicron has spooked governments and markets since it was first identified less than two weeks ago, the World Health Organization has emphasised that it is premature to draw conclusions, a view echoed by Anthony Fauci, chief medical adviser to US President Joe Biden, even as he described early data on its severity yesterday as “encouraging”.

Experts believe it will be at least two weeks before enough information is available, but what is not in doubt is that the variant is spreading, with cases in about 40 countries and in at least 17 US states since it was first recorded in South Africa.

The US announced additional measures last week in a bid to stop the spread, including free rapid tests, an extended mask mandate on public transport and stricter testing for international travellers. New York City will require all private sector workers to be vaccinated from December 27, the strictest measure taken anywhere in the US so far.

The UK government, which is particularly sensitive to accusations of “cancelling Christmas”, tightened travel restrictions at the weekend, with pre-departure testing mandatory for all arrivals from tomorrow.

Nigeria today became the 11th African country to be added to the UK’s “red list” — meaning arrivals must quarantine in a government-approved hotel at their own expense for 10 days. The move was slammed by the Nigerian government as “apartheid”. “We are dealing with a pandemic. What is expected is a global approach, not selective,” said the country’s High Commissioner.

The US has also imposed travel restrictions on African countries, drawing a sharp rebuke from the WHO, which said they “place a heavy burden on lives and livelihoods”. South Africa, a tourist-dependent economy, is paying a particularly onerous price, points out Africa editor David Pilling, despite the speed and honesty of its scientists in alerting the world to the new variant. The real blame, he argues, lies with richer countries for not sharing their vaccines with poorer countries and allowing new variants to emerge.

In Europe, Omicron is forecast by health authorities to account for more than half of all coronavirus infections within the next few months. From today, Italians are unable to use restaurants, theatres and museums unless they can prove they have been vaccinated or have recently recovered from the virus, Poland is set to announce new restrictions later this week, and Germany is considering mandatory vaccination from next year.

Even before the emergence of the new variant, many countries were moving closer to making vaccines mandatory, although the FT Editorial Board argues widespread use of vaccine passports would be more fruitful, in combination with compulsory mask wearing in public places and on transport.

“Some will rail against such suggestions as infringements of liberties. But, two years after coronavirus emerged, a touch of paternalism is warranted if it can ward off new home confinements — and help, finally, to bring the pandemic to heel,” the FT says.

Latest news

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• Ford delayed its return to the office once again, citing continued spread of Covid-19 as its home state of Michigan has become a national hotspot (Bloomberg)

For up-to-the-minute news updates, visit our live blog

Need to know: the economy

The Bank of England is unlikely to raise interest rates at its monetary policy meeting on December 16, according to economists, who do not expect any changes until the impact of Omicron becomes clearer. Ben Broadbent, a deputy governor, said the UK’s tight labour market posed risks for inflation even if the current surge in prices for goods began to wane.

The potential of Omicron to knock back Europe’s recovery is likely to be a hot topic at today’s round of eurogroup meetings, the first since the new variant emerged, reports Sam Fleming in today’s Europe Express newsletter. The European Commission had already listed the threat of new Covid outbreaks as a key risk to its otherwise optimistic forecasts for growth.

Latest for the UK and Europe

Activity in the UK construction sector rose to a four-month high in November, according to new PMI data, as signs grew that supply chain problems were easing, including a softening in input prices. UK business investment — Omicron permitting — is set to rebound sharply in 2022 because of a government tax incentive known as the “super deduction”.

The return of tourists boosted Greek GDP by 9.3 per cent in the third quarter, leading the government to forecast the economy would return to its pre-pandemic level by the end of next year.

Global latest

A growing number of the biggest investors in the world, including pension funds, university endowments and charitable foundations, are lining up to take on more risk but this could have “catastrophic” implications, argues Paul Singer, founder and co-CEO of Elliott Management. “Investors who have upgraded their risk levels, relying on policymakers to protect the prices of their holdings, may suffer significant and perhaps long-lasting damage when the government-orchestrated music finally stops,” he argues.

Brazil, which for a while was the epicentre of the global coronavirus outbreak, is emerging from its Covid “nightmare” after a successful vaccination campaign. Despite the antics of President Jair Bolsonaro, who once dismissed the illness as “a little flu”, daily deaths have fallen to under 200 on a seven-day rolling average, with the rate per 100,000 residents currently below the US, EU and UK.

Need to know: business

Bosses at accountancy firms Deloitte and BDO said the move towards flexible work did not affect audit quality, although rival KPMG has told staff they must be back in offices and client sites up to four days a week in the long-term “to ensure we collaborate more efficiently”. Auditors have been using technology such as drones and CCTV to help with stock counts while working remotely, but some senior staff are worried that errors or wrongdoing may be harder to spot if they are not physically present.

One sector that is definitely suffering from the shift to flexible working is commercial property. Falling occupation rates and rising costs have left many London offices stranded in the hands of owners that can’t afford to upgrade them at the same time as tighter rules on energy efficiency mean they need to spend big on upgrades or sell at a discount.

UK hospitality businesses, already suffering from staff shortages and increased food and energy costs, had hoped to recoup at least some of their lockdown losses during the holiday season, but with seasonal celebrations suffering from cancellations, the sector faces a bleak winter.

Budget airline easyJet has switched to a more upbeat view of the future of air travel, buying up slots at busy airports, including London Gatwick, and predicting a return to almost pre-pandemic levels of flying by next summer.

UK biotech has been given an important lesson from the pandemic, says Kate Bingham, former chair of the UK Vaccine Taskforce and managing partner of SV Health Investors, in an article for the FT. The entrepreneurial drive and collaboration between academics, investors, public health, big pharma and innovative small companies in the race for a vaccine sets the country in good stead to tackle other health crises, from cancer to heart disease, she argues.

The World of Work

Two stories today could have significant implications for “gig economy” workers. Ride-hailing company Uber lost a case in the High Court in London which ruled that it was unlawful for a private hire vehicle to act as an “agent” between driver and passenger, meaning that Uber and other ride-hailing companies will be held liable for any problems with the service. In the US meanwhile, delivery app DoorDash, which was one of several companies fighting regulations that give employment rights for gig workers, has decided to hire couriers as employees for the first time.

During the early pandemic period, boards did what they could to keep CEOs in place to weather the storm, but the number of leaders leaving big public companies has begun to speed up, citing burnout and exhaustion from managing the crisis, writes columnist Rana Foroohar.

One way of holding on to staff is for companies to support flexible working and make benefits such as paternity leave easier to take, writes Emma Jacobs. The knock-on effect will be greater loyalty and a desire to stick with the business for the longer term.

Remote working can satisfy employees’ need for flexibility and improved better work-life balance, but if not handled correctly can also lead to staff feeling undervalued and neglected, writes management editor Andrew Hill.

Get the latest worldwide picture with our vaccine tracker

And finally.

“My manager and an attorney discovered five forged wills of mine, 67 bank accounts, 102 Mastercards and Visas. There were Centurion cards with million-dollar credit lines — I found one that was being used in 2005 by someone I had fired in 1999“. As part of the FT Financial Literacy and Inclusion Campaign, musician Courtney Love explains why you’ve got to do the math.