Omicron’s uncertainty

However, these latest unemployment figures predate the discovery of the Omicron variant. Last month, Bank of England chief economist Huw Pill said that “the ground was set for political action”, before later describing the new variant as “a punch in the face” .

Already, non-essential employees have once again been urged to work from home. Masks are now mandatory in most public spaces. Today, MEPs are voting on a controversial measure aimed at enforcing Covid passports to access nightclubs or high-capacity venues.

Scientists agree that a third ‘booster’ jab is essential to stop the spread of the symptomatic coronavirus caused by Omicron. But the recall campaign is already encountering logistical problems. And with the increase in cases, no PCR test is currently available at walk-in centers.

Yesterday Prime Minister Boris Johnson said “we are taking all necessary measures to protect public health”. He has repeatedly refused to rule out other restrictions before Christmas. Meanwhile, modeling from the London School of Hygiene and Tropical Medicine shows that in the worst case scenario, hospitalizations could even reach double the peak of the January 2021 wave.

And schools in some areas are struggling to stay open. School and College Leaders Association general secretary Geoff Barton said there are “some pockets of very severe low attendance.” And speaking to LBC, Health Secretary Sajid Javid said there was “no guarantee” the school would not close.

But a rate hike may not be immediate. Yesterday Governor Andrew Bailey said “I don’t think (Omicron) is going to be a big stressful event.” He also announced plans to ease mortgage rules by removing the stress test that requires applicants to be able to afford a 3% rate hike, potentially helping 50,000 potential first-time buyers move up the ladder. real estate. However, it could see house prices skyrocket even higher and expose financially weaker mortgage holders to negative equity risk. But it sends a strong signal to forex traders that the days of high interest rates are over.

KPMG chief economist Yael Selfin said that “with the emergence of the Omicron variant … we now expect the MPC to unanimously suspend the rate hike until the ‘next year”. But with inflation soaring, the Bank is between a rock and a hard place. If that delays a rate hike now, the eventual hike could be bigger and more painful. And with the Managing Director of the International Monetary Fund, Kristalina Georgieva, arguing that “monetary policy must withdraw the exceptional support provided in 2020”, the pressure continues to mount.

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