Charlotte Street Partners



An injection of hope

Written by Javier Maquieira, senior associate 
Edited by David Gaffney, partner
12 November 2020

Good morning,

I never imagined the day would come when my trypanophobia would give way to a deep yearning for a vaccine. I’ve submitted reluctantly to each one of the vaccination injections I’ve had to endure throughout my life, but now find myself in a highly unlikely state of glee at the thought of a hypodermic needle primed with a coronavirus vaccine.
On Monday, we learned that the Pfizer/BioNTech’s candidate vaccine had proven 90% effective in global trials, performing much better than most experts had hoped. While the trial will continue into December, regulators are already looking to process an emergency licence application at record speed.
As science writer Tom Chivers explains in his analysis of this “potentially extremely good news”, although the real efficacy number could be slightly more or less than 90%, it would realistically not be worse than 80%. Crucially, one of the advantages of this vaccine is that it is quite easy to make, even in large doses, although it will to some extent be reliant upon supply chains for its constituent parts.
The European Union has agreed to purchase up to 300 million doses of the vaccine candidate and, if all goes according to plan, Pfizer believes it could supply 50 million doses by the end of this year, and about 1.3 billion by the end of 2021. In the UK, which has become the first country in Europe to register 50,000 coronavirus deaths, the prime minister, Boris Johnson, welcomed the news but sounded a cautionary note on timings, comparing it to “the distant bugle of the scientific calvary coming over the brow of the hill”.
The UK government, which ordered 40 million doses from Pfizer earlier this year, believes one vaccine is not enough and has invested in five other potential vaccines as well, translating into 300 million more doses. No less than 100 million of those would be of the Oxford/AstraZeneca candidate, which is expected to announce its interim findings from phase-three trials by “early December”.
As Professor Jonathan Van-Tam, the deputy chief medical officer for England, noted in reference to the race for vaccines, “it is speed, and also high uptake, that are important. And I think in this space we’ve got to understand that it would be very easy to let the perfect become the enemy of the good here.”
News of an effective vaccine might indeed herald the beginning of the end of this pandemic. Yet challenges abound in terms of licensing, manufacturing, and distribution. The development of the Covid-19 vaccine has broken all records and provided a welcome boost to morale as we enter the winter months, but we may need to wait a while before the distant bugle becomes a deafening blast.


Lee Cain, Boris Johnson’s director of communications and one of his closest aides, will step down next month amid reports of internal tensions in the cabinet. Cain, who has worked with the prime minister for several years, is expected to be replaced by chief spokesman James Slack. His resignation comes after he was offered the vacant post of chief of staff in 10 Downing Street, a move which caused underlying disagreements to flare within Johnson’s inner circle. 
The United States has threatened to impose further sanctions on Chinese and Hong Kong officials over a new law passed by China’s highest legislative body. The law disqualified four pro-democracy legislators and designated them “unpatriotic”, prompting a declaration of mass resignation among fellow pro-democracy lawmakers on Wednesday. Along with governments in Germany and Australia, US officials have accused China of having “flagrantly violated” its international commitments. 
The US State Department is preventing president-elect Joe Biden from accessing dozens of messages from foreign leaders, despite the department having traditionally supported all communications for the president-elect. However, the Trump administration’s refusal to accept Biden’s victory has left the president-elect’s team to deal with the unexpected challenge of facilitating calls with foreign governments. The news comes after secretary of state Mike Pompeo refused to acknowledge Biden’s victory on Tuesday, saying that “there will be a smooth transition to a second Trump administration.”

Business and economy

The UK economy rebounded by 15.5% between the months of July and September, prior to the second wave of Covid-19 infections, according to the Office for National Statistics (ONS). The third quarter figures represent the largest leap in GDP growth ever recorded by the ONS, reflecting the easing of lockdown measures during the summer months and the historic slump in GDP earlier this year.
A report commissioned by the chancellor of the exchequer, Rishi Sunak, recommends a major overhaul of capital gains tax (CGT) to raise up to £14bn and help repair the government’s finances. Under the proposals, the maximum CGT rate of 28% could be raised closer to income tax rates, where the top rates are 40% in England, 45% in Wales and 46% in Scotland. The government review could also see deep cuts in the profits equity investors can make without paying tax, as well as an increase in inheritance tax bills. 
The president of the European Central Bank (ECB), Christine Lagarde, has announced plans for more quantitative easing and cheap funding for lenders with the aim of keeping borrowing costs down for households, business and governments and avoiding a credit crunch in the banking sector. Triggered by another round of national lockdown, inflation in the eurozone is now expected to remain negative for longer than expected as part of the ECB’s stimulus package next month. (£)
A new project led by Rolls-Royce to build up to 16 mini nuclear plants is expected to create 6,000 new jobs in the Midlands and the north of England over the next five years. The company argues that the project will allow to produce low-carbon electricity and may become an export industry for the UK. The UK government is also said to be poised to announce at least £200m for the project as part of its green plan for economic recovery. 

Columns of note

Aditya Chakrabortty argues in The Guardian that poor white Americans will continue to seek a leader in Donald Trump’s mould as long as they have little hope of a better life. By forging a new electoral coalition out of downwardly mobile white voters, Trump turned the Republicans into a party whose future is tied to “Trumpland”, a country with its own society, economics and politics and where prosperity remains out of reach for many. Chakrabortty concludes that Joe Biden won’t be able to drain the toxicity of Trumpism without tackling the noxious economics of Trumpland.
In the Financial Times, Philip Stephens looks at the future of the ‘special relationship’ between the US and the UK under Biden and Johnson. Although the US president-elect may not bear grudges, Stephens writes, he will be disinclined to give the prime minister the benefit of the doubt, and will turn his attention to Berlin and Paris to reset the transatlantic relationship instead. (£)

Cartoon source: The Telegraph


What happened yesterday?

London stocks finished higher for the eighth day straight on Wednesday on optimism over a Covid-19 vaccine. The FTSE 100 ended the session up 1.35% at 6,382.10, while sterling was weaker against both the dollar by 0.54% at $1.32 and the euro by 0.12% at €1.12. In the US, the Nasdaq Composite index gained two per cent and the S&P 500 closed 0.8% higher.
In company news:
BAE Systems gained 2.28% after the defence aerospace group said underlying earnings would be slightly higher than expected after order intake levels moved ahead of original pre-Covid planning.
Flutter Entertainment rallied five per cent as the bookmaking holding company upgraded its earnings forecast for business outside the US.
J D Wetherspoon managed to close flat following a session spent in the red, after the pub chain reported a sharp drop in sales.
Workspace fell 2.51% after saying it swung to a loss in the first half, with income hit as customers downsized due to the coronavirus pandemic.

What’s happening today?

Enteq Upstream
Mediclinic International
National Grid
Picton Prop
Urban Lo

Clear Leisure
Grand Vision
James Halstead
New Star Inv

UK economic announcements
(00:01) RICS Housing Market Survey
(07:00) Gross Domestic Product
(07:00) Index of Services
(07:00) Manufacturing Production
(07:00) Balance of Trade
(07:00) Industrial Production
(07:00) GDP (Preliminary)

Int. economic announcements
(07:00) Consumer Price Index (GER)
(10:00) Industrial Production (EU)
(13:30) Initial Jobless Claims (US)
(13:30) Consumer Price Index (US)
(13:30) Continuing Claims (US)

Source: Financial Times

did you know

During the BBC’s evening news bulletin on 18 April 1930, the news announcer reported that “there is no news” and piano music was played instead for 15 minutes. (@8fact)

Parliamentary highlights

House of Commons

Oral questions
Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office (including Topical Questions)
Business Statement
Business Questions to the Leader of the House – Mr Jacob Rees-Mogg
Backbench Business
Effect of the covid-19 pandemic on refugee communities – Rushanara Ali
Effect of the covid-19 outbreak and the abolition of Public Health England on achieving a smokefree England by 2030 – Mary Kelly Foy
Public attendance at Peterborough Utd FC home matches during the covid-19 outbreak – Mr Shailesh Vara

House of Lords 

Oral questions
Consequences of government policies in relation to the COVID-19 pandemic on their levelling up agenda in England – Lord Greaves
Plans by the Foreign, Commonwealth and Development Office to develop a strategy for how they plan to meet the Sustainable Development Goals and when any such strategy will be published – Lord Collins of Highbury
Maintaining the £20 a week increase in Universal Credit for the duration of and after, the COVID-19 pandemic – Lord Woolley of Woodford
Negotiations with the EU in relation to ensuring unfettered access for goods between Great Britain and Northern Ireland – Baroness Ritchie of Downpatrick
Fisheries Bill – consideration of Commons amendments – Lord Gardiner of Kimble

Scottish Parliament 

First Minister’s Questions
Portfolio Questions
Ministerial Statement
Rural Payments Strategy 2020-21
Legislative Consent Motion
Environment Bill
Stage 1 Debate
Pre-release Access to Official Statistics (Scotland) Bill
Legislative Consent Motion
Medicines and Medical Devices Bill

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