Charlotte Street Partners



This pandemic is a (baby) bust

Written by Maria Julia Pieraccioni, associate 
Edited by Tom Gillingham, associate partner
11 March 2021

Good morning,

Nationally-imposed lockdown measures, leading to increased time indoors across the globe, led to early speculation that the Covid-19 pandemic could produce a much-needed boom in birth rates in many economically advanced, yet demographically challenged countries. However, a report published in early 2021 by the Brookings Institute contradicts early well-wishers with a sobering realisation: this pandemic is a baby bust.
Alarmingly, the report highlights that unlike past health and economic crises or wars, the Covid-19 pandemic’s baby bust will have unprecedented longevity. Evidence suggests that not only has the Covid-19 worsened existing downward trends in birth rates but it has also affected the few developed countries with healthy ones.
Births in Italy, measured in December 2020, decreased 21.6% year-on-year, a meaningful drop in a decade-long downward trend. Similarly, Japan experienced a 9.3% drop in birth-rates, measured year-on-year. While the pandemic may have worsened birth-rates for the aforementioned countries, the data suggests that these trends were downward-spiralling to begin with and are projected to endure as the pandemic wanes.
The UK’s costly aging demographic used to be mostly offset by the inpouring of young Europeans attracted to the UK by its accessible labour market and academic institutions. Unlike its European counterparts, this allowed the UK to maintain a slower decline over the past few decades, but this has been thrown into uncertainty by closed borders and Brexit. Meanwhile, the impact of Covid-19 on national unemployment levels, postponed pregnancies, fewer unwanted pregnancies and limited access to IVF, have all led to a sharp decrease in birth rates. According to forecasts by PwC, fewer that 570,000 babies are likely to be born this year in the UK, the lowest figure since 1900.
Similarly, the decade of demographic stagnation in the US was mitigated by the influx of younger immigrants and its labour force’s flexible and willing mobility. As a whole, America’s birth rate is still positive—0.32% growth measured in December 2020 as compared year-on-year—yet, modest. Above all, the economic effects of the pandemic on employment almost singlehandedly affected American birth rates. The Brookings Institute research suggested a strong correlation between unemployment and birth rates, positing that 1% increase in unemployment leads to a 1% decrease in aggregate births.
In China, the 2015 abolition of the one-child policy momentarily curbed its rapid and unsustainable population growth. This year, however, evidence suggests that the deaths of many young workers to Covid, coupled with the distrust of maternity support many women face, may discourage young families to have more children, despite being legally allowed to do so. In the long term this might hinder the Chinese government’s plan for economic growth, which relies on a young workforce.
Decreasing birth rates are a result of a concoction of factors: increasing rates of female employment, heavier tax levers to offset the costs of aging populations, stagnant childrearing support, are only a few.
If you consider Covid-19 uncertainty, gender-pay gaps, unpaid or short maternity leave, and inadequate child-rearing support options, the question between building a career and childbearing starts to look more and more like Sophie’s Choice.


The Metropolitan police commissioner, Dame Cressida Dick, announced that the police have recovered human remains linked to the disappearance of Sarah Everard. Wayne Couzens, a police officer in the diplomatic protection command, has been arrested for Everard’s disappearance, now being ruled a murder.
In Scotland, a new poll by YouGov has found that more than half of the Scottish electorate now opposes independence, a striking result since the pollster’s last survey that showed the opposite in November 2020. Those interviewed also say that an independence referendum in 2021 would be badly timed as the country recovers from the pandemic. (£)
The UK government’s equality adviser, Jayne Ozanne, has quit her role over the “ignorance” of women and equalities minister, Liz Truss, and Kemi Badenoch, the equalities minister. Ozanne’s resignation comes after continuous stalling in Parliament of a bill to ban ‘conversion’ therapy in the UK.

Business and economy

The Food and Drink Federation reports additional costs will be incurred by food and beverage companies as the EU plans additional red tape on food imports from April 21. New legislation will require UK food exporters to comply with new regulation on multi-ingredient products, which will likely “increase the volume of health certificates to send food to the EU by up to one-third”. (£)
In Scotland, Glasgow and Stirling are set to join the other 32 local authorities agreeing on council tax freezes. In exchange, as part of the Scottish government’s 2021/2022 budget, councils will receive cash payments equivalent to a 3% increase in council tax. The government’s move attempts to alleviate the financial pressure that families continue to face due to the slow revival in the Scottish economy.
President Joe Biden’s historical $1.9 trillion relief package has been approved by the House of Representatives, passing the last hurdle before being signed into law by the President on Friday. The stimulus bill passed with 220 in favour and 211 opposed, a slight margin but unsurprisingly along partisan lines. The bill is widely popular among Americans, according by an early March Pew Research Centre poll, which found that 70% of US adults supported the bill.

Columns of note

Sophie Gilbert masterfully recollects the loneliness and isolation she experienced as a new mother during the pandemic in The Atlantic. The transformative effect of motherhood contrasts with the alienation the author felt due to social distancing and lockdown rules. A new birth is a shared joy. With the communal element taken away, the author asks, “What does it mean to be a mother (or a father, for that matter) when you’re living in a vacuum?”. (£)
When tasked to comment on the latest shake ups in the media—ranging from the Duke and Duchess of Sussex to Piers Morgan quitting IGTV—Owen Jones points out that the underlying context is a rift between generations. The UK is experiencing a generational divide that informs the way Britons consume media, but also how they vote. This can be particularly poisonous for the Left, as younger generations prefer Corbyn-style revolutionary ideas, in contrast with “Generation X’ preference for Blairite-style Third Way politics”.

Cartoon source: The New Yorker


What happened yesterday?

On Wednesday, the Stoxx Europe 600 equity index closed in positive territory, up 0.4% from the day before, while the FTSE 100 lost 0.07%.
In Europe, the CAC 40 in France closed at a positive 1.1% since the day before, and the euro was overall steady, closing the day at $1.1907 against the American dollar. Eyes remain peeled as investors await news from the European Central Bank today about how the ECB plans to deal with rising bond yields in the eurozone.
On the other side of the Atlantic, the S&P 500 index gained 0.6%, as the prospect of looming inflation failed to materialise. On the other hand, the Nasdaq Composite closed down 0.04%from the day prior, which saw Tuesday as the Nasdaq’s biggest value increase since November. The yield on the 10-year US Treasury bonds fell 0.01%, closing the day at 1.52%.

What’s happening today?

Derwent London
James Fisher and Sons
Gem Diamonds Di
Gresham House
Just Group
Morrison (WM)
Rolls-Royce Holdings
Secure Income Reit
Tcs Group S

Volution Grooup PLS

Q4 Results
Arabians Food S
Tcs Group S

Romgaz S

Vela Tech.

Interim Ex-Dividend Date
Acorn Income
Alliance Trust
BMO Capital & Income Investment Trust
Bmo Real Est
Galliford Try
HSBC Holdings
JPMorgan Emerging Markets Investment Trust
Mid Wynd International Investment Trust
Morses Club
Ruffer Inv. Co.
Sdcl Energy Ef.
Stand Life UK
Temple Bar Investment Trusts
Triple Pnt Soc

Interim Dividend Payment Date

Quarterly Ex-Dividend Date
Alpha Real
Bmo Comm Prop.

Special Ex-Dividend Date

Special Dividend Payment Date
Anglo Asian

UK economic announcements
(00:001 RICS Housing Market Survey

Int. economic announcements
(12:45) ECB Interest Rate (EU)
(13:30) Continuing Claims (US)
(13:30) Initial Jobless Claims (US)

Source: Financial Times

did you know

As a result of the Covid-19 pandemic, in Europe women are experiencing a total wage loss of about 8.1% compared to 5.4% for men.
(Source: Global Wage Report 2020-2021, Wages and minimum wages in the time of Covid-19)

Parliamentary highlights

House of Commons

Oral Questions
Transport (including topical questions)
Business Statement
Business questions to the Leader of the House – Mr. Jacob Rees-Mogg
Proceedings on the Supply and Appropriation (Anticipation and Adjustments) (No. 2) Bill
Consideration of a Business of the House Motion
Contingencies Fund (No. 2) Bill: All stages
Money Resolution
Contingencies Fund (No. 2) Bill
General Debate
International Women’s Day – Mrs. Maria Miller; Caroline Nokes
Concussion in sport – Chris Bryant
Westminster Hall debate
Community pharmacies and the effect of the covid-19 outbreak – Jackie Doyle-Price
Quality of life for patients with heart failure – Jim Shannon

House of Lords 

Oral questions
Addressing global population growth and COP26 – Lord Brooke of Alverthorpe
Visa and work permit requirements for touring in the EU on music and performing arts students in the UK – Lord Black of Brentwood
Prohibiting the flaring of gas on off-shore gas rigs within the UK’s exclusive economic zone – Lord Treverson
Problems resulting from the operation of the Protocol on Ireland/Northern Ireland – Lord Lexden
Recent Court Order regarding the Government’s publication of contracts during the Covid-19 pandemic – Lord Bethell
Planned reforms to Hong Kong’s electoral system by the Chinese National People’s Congress – Lord Ahmad of Wimbledon
Counter-Terrorism and Sentencing Bill – third reading – Lord Wolfson of Tredegar
Overseas Operations (Service Personnel and Veterans) Bill – committee stage (day 2) – Baroness Goldie
International Women’s Day and the UK’s role in empowering women in the recovery from the impact of the Covid-19 pandemic – Baroness Berridge

Scottish Parliament 

First Minister’s Questions
Portfolio Questions
Transport, Infrastructure and Connectivity – various
Stage 3 Proceedings: Redress for Survivors (Historical Child Abuse in Care) (Scotland) Bill
Scottish Biometrics Commissioner Appointment

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