Charlotte Street Partners



Planning for a second wave

Written by Scarlett Regan, senior associate
Edited by  Laura Hamilton, managing partner
27 May 2020

Good morning,

Coronavirus infections might have begun to decrease as governments continue to ease lockdown measures, but fears of a second Covid-19 wave are definitely real. Take South Korea, for example, where the lifting of restrictions has led to the biggest one-day jump in cases for weeks.
Most people would agree by now that countries were not really prepared for this pandemic, despite all the warnings. However, the question now is whether world leaders are ready to avoid new spikes of infection in the months ahead.
Some of the deadliest outbreaks of the last seven hundred years – the Black Death, the bubonic plague, and the wrongly named Spanish flu – came in waves, with the second killing substantially more people than the first. Of course, the medical and information technology that was available then can’t be compared to the one we experience in the present. Yet, there are a series of factors that countries will need to take into account to contain a second spate of coronavirus cases.
Medical experts have time and time again insisted on the critical importance of keeping the reproduction or R number below one. One way of allowing the lifting of restrictions and restart of the economy without risking an increase in the R number is ensuring people continue to stick to social distancing and contact tracing measures.
At the same time, leaders will rely on new scientific evidence as it becomes available to inform their decision making. There’s much we don’t know about the coronavirus yet, including the length of any immunity for those who have already had it once and seasonal variations in the way the virus spreads.
Some are already planning ahead as they expect a second wave of Covid-19 infections to take place in the winter. For instance, Canada’s prime minister, Justin Trudeau, announced plans on Monday to give all Canadian workers 10 days of paid sick leave a year to ensure people can take time off when they need it, rather than risk coming in to work.
In Europe, although the epicentre of the virus seems to have moved to the east, a second wave in the west could indeed coincide with the outbreak of other infectious diseases. In this context, calls for strengthening our public health systems in preparation for the worse can’t be loud enough as we hope for the best.


The parliamentary under-secretary of state for Scotland, Douglas Ross, resigned after saying he could not justify Dominic Cummings’ actions to his constituents. The Conservative MP for Moray added that the senior aide’s take on government guidance was “not shared by the vast majority of people”. His decision comes as more than 35 Tory MPs have called for Cummings’ resignation.
In related news, Prime Minister Boris Johnson will face questions by senior MPs later today about the government’s handling of the Covid-19 crisis.
The UK health secretary announced that remdesivir, an experimental antiviral drug pioneered for Ebola that reduces recovery time from Covid-19, will be used in the UK for selected NHS patients. Matt Hancock welcomed the authorisation of the drug as “probably the biggest step forward in the treatment of coronavirus” since the outbreak began.
For the first time, Twitter labelled two of Donald Trump’s tweets as “potentially misleading”. The social media platform added a message “Get the facts about mail-in ballots” beneath Trump’s tweets in which he claimed mail-in ballots would lead to widespread voter fraud, appending a message the company has introduced to combat misinformation and disputed or unverified claims. The US president later took to Twitter to say the company “is interfering in the 2020 Presidential Election” and “stifling FREE SPEECH.”

Business and economy

Emmanuel Macron announced an €8bn plan to rescue the French car industry, which has been severely hit by the coronavirus crisis as it braces for thousands of job cuts. The French president’s proposal includes grants of up to €7,000 to encourage citizens to buy electric vehicles, as well as investments to make France a centre for electric vehicle output. French car producers Renault and PSA have committed to focussing production in the country in return for the relief.
Lufthansa agreed a €9bn lifeline with the German government to protect thousands of jobs amid the coronavirus crisis. The bailout, which is the largest corporate rescue since the pandemic began, will give Berlin a 20% stake in the airline and a veto if there is a hostile bid for the company.
A Treasury survey of independent economists foresees the UK economy will be running an annual deficit of five per cent of national income by the next election in 2024. Although the forecasts expect a reasonable recovery, the coronavirus pandemic will leave a lasting impact on Britain’s prosperity and public finances, with the gross domestic product predicted to be four per cent lower in four years’ time. (£)

Columns of note

Robert Armstrong argues in the Financial Times that global businesses should prepare for a two-track world if economic relations between China and the United States continue to sour. Although companies investing heavily in China can’t consider bailing out, firms outside the US and China are likely to face impossible dilemmas, too. (£)
Writing in The Herald, Rosemary Goring opines that Nicola Sturgeon’s high approval rating during the coronavirus pandemic is based as much on the quality of her leadership as on the practicalities and timing of the lockdown measures the first minister imposed. Compared to Boris Johnson, writes Goring, Sturgeon has proven to be a level-headed and consistent leader, “the epitome of sang froid.”

Cartoon source: The Times


What happened yesterday?

London stocks finished firmly higher on Tuesday as investors welcomed the easing of lockdown measures and travel restrictions. The FTSE 100 was up 1.24% at 6,067.76, while the sterling was stronger against the dollar, rising more than one per cent to $1.2344 – its highest level in almost two weeks.
Gains in the travel sector came after the Spanish government’s announcement that it would lift the 14-day quarantine for international arrivals from 1 July, as well as reports that Germany plans to end a travel warning for tourist trips to 31 European countries from 15 June.
TUI was 52.02% higher, while InterContinental Hotels added 9.27% and cruise operator Carnival was 4.36% firmer.
In other news, Aston Martin Lagonda rallied 27.92% after it was confirmed that chief executive Andy Palmer will be replaced by AMG chief Tobias Moers in August.

What’s happening today?

Hibernia Reit
Ramsdens Hldgs


Anglo Pacific, BP, Brunner Inv.tst, Coca-cola Euro, Contourglbl, Fundsmith Emerg, Goco Group, Intl Public, Keywords Studio, M&g Plc, Rm Secured, Scotgems, Sherborne Inv B, Sherborne Inv C, Gym Grp, Vectura, The Vitec Grp., Wameja Di, Xlmedia

Source: Financial Times

did you know

Antarctica is classed as a desert due to its limited rainfall.

Parliamentary highlights

House of Commons

No business scheduled 

House of Lords 

No business scheduled 

Scottish Parliament 

First Minister’s Questions
Ministerial Statement
Mobilisation of Scottish Manufacturing Base and Sourcing to Support NHS Scotland
Stage 1 Debate
Children (Scotland) Bill
Financial Resolution
Children (Scotland) Bill

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