Charlotte Street Partners



The fault in our density

Written by Javier Maquieira, senior associate 
Edited by Katie Stanton, associate partner
14 September 2020

Good morning,

During the first world war, press in some western European countries refrained from reporting news of the devastating effects of the 1918 pandemic to avoid additional public alarm, with health authorities even refusing to reveal the number of infections and deaths in many cases.
That sort of censorship didn’t exist in neutral Spain at the time, which gave newspapers the freedom to fill their pages with the names of those who had died of the virus in the country. The perception that the pandemic had originated in Spain gave way to the misnomer that lives on to this day: the Spanish flu.
More than a century later, the novel coronavirus doesn’t have a nationality, no matter how hard President Trump tries with “the Wuhan virus”. Yet it is no secret that, this time, Spain remains the western European country with the highest number of Covid-19 infections, after recording more than half-a-million cases since the beginning of the outbreak.
To give you an idea of scale, almost 10% of Spaniards tested for the coronavirus have received positive results, far above the levels in France, Italy, Germany and the UK. But what accounts for that difference? Is it our cultural inclination towards kissing and hugging? It could be, but that’s certainly simplifying things.
One factor to bear in mind is a higher detection rate compared with March and April. According to Spanish officials, only one in 10 cases was detected back at the start of the crisis, whereas now that percentage sits between 70 and 90%.
Another element that has become the focus of most analyses is the drop in the average age of coronavirus cases, from 59 in March to 38 in September. Partying and socialising practices like the botellón among young people in Spain have drawn most of the criticism from the country’s leaders. But people’s homes are by far the most frequent place of infection, accounting for half of the cases.
To be sure, Spain’s decentralised model of governance has had something to do with the higher number of cases. The end of the state of emergency meant health policy became the responsibility of regional governments, which in some cases scrapped restrictions without ensuring adequate preparation in the track and trace department.
However, there’s another key territorial feature worth considering in the mix of things: Spain is the most densely populated major country in Europe, with 47.2 million people living in just 13% of the territory. To put this into context, this percentage is noticeably higher in England, France or Scotland, at 76%, 58% and 31%, respectively.
Yes, we Spaniards like to mingle, but we do it in highly inhabited places. Now the Spanish health authorities say transmission seems to be “stabilising”, while the death toll remains relatively low. Here’s hoping they’re right.


Restrictions banning social gatherings of more than six people have come into effect both in indoors and outdoors in England and Scotland, and indoors only in Wales. The new rules, which affect everyone in England but exclude children under 11 in Wales or under 12 in Scotland, have been introduced as the UK’s R number escalated to between 1 and 1.2 for the first time since March.
Former attorney general Geoffrey Cox plans to vote against Boris Johnson’s attempt to override the European Union withdrawal agreement when it comes before the House of Commons. The Conservative MP said the UK government’s intention to break international law was “unconscionable”, confirming he wouldn’t back the UK internal market bill unless ministers dispel plans to “permanently and unilaterally” rewrite an international agreement.
Israel will impose a second national lockdown on Friday to help contain the spread of the coronavirus. The restrictions will come into effect for at least three weeks and overlap with important Jewish festivals. Prime minister Benjamin Netanyahu is facing criticism as the new measures will severely impact prayers in synagogues and prevent Jewish families from celebrating together.
More than 100,000 people joined protests against Belarus’ president, Alexander Lukashenko, on Sunday as they marched on his residence in the capital, Minsk. Failed attempts to crush popular demonstrations are thought to be an embarrassment for the Belarusian leader, who will meet Vladimir Putin today in the Russian resort of Sochi, as fears mount over a soft Kremlin takeover.

Business and economy

TikTok owner ByteDance has reached a preliminary deal with technology group Oracle for the app’s US operations after rejecting Microsoft’s bid ahead of President Trump’s deadline for banning the short video platform. As part of the agreement, Oracle will address the Trump administration’s concerns over the Chinese company’s ownership of TikTok. (£)
SoftBank has struck a $40bn (£31.2bn) deal to sell UK-based computer chip designer Arm Holdings to the American graphics chip specialist Nvidia. The US business has promised to keep the company based in Cambridge, hire more staff, and retain Arm’s brand, thus addressing concerns that British jobs would be lost and decision-making shifted to the US.
A study from the Institute for Employment Studies (IES) suggests half a million redundancies are likely to be announced in the autumn in the UK. The job cuts, which could end up exceeding 700,000, would add to the 240,000 redundancies that have been officially recorded by the UK government up until June, which means the total figure for 2020 could top one million.

Columns of note

Andrew Hill writes in the Financial Times that keeping employees aligned with the corporate mission will become harder as they spend more time away from the workplace. However, humans’ endless capacity to adapt means efforts to shape or show off corporate culture online can provide more flexibility for colleagues to make new connections or revive weak ties beyond their established relationships. (£)
Writing in City AMJohn Hulsman invites us to see the world through the eyes of Vladimir Putin, to understand – but not condone – the Russian president. Putin’s worldview naturally eschews western European thinking. He is a realist, he understands the patriotism of his people, and he is also aware that the international system hasn’t changed for centuries. Understanding (rather than scoffing at) his position is key; it is the “first step in besting him.”

Cartoon source: The Times


The week ahead 

Central banks in the US, the UK and Japan are meeting this week, with no changes expected from any of them. The Federal Reserve’s two-day meeting concludes on Wednesday, when the Bank of Japan is expected to keep interest rates on hold.
Meanwhile, the Bank of England meets on Thursday with Brexit back on the agenda and investors watching carefully for clues on what policymakers will do next.
On the corporate side, it will be a busy week for companies, with a dozen IPOs set to raise $6.8bn in the US, including two of the largest software listings in the country’s history.
Back in the UK, BP is expected to provide details of its plans to shift away from oil and gas to renewable energy and power markets during a three-day virtual investor event.
Elsewhere, Apple will use its September event on Tuesday to showcase its accessories business and other hardware but not the company’s most profitable product, the iPhone, for the first time in almost a decade.

What’s happening today?

City Lon Inv

Ekf Diagnostics
Greencoat Rene.
Keystone Law G.
M.p. Evans
Medica Group P.
Silence Ther.
Xpediator Plc

Ethernity Net
Great Eastern
The Panoply Ho.
Warehouse Reit

Int. economic announcements
(10:00) Industrial Production (EU)

Source: Financial Times

did you know

The United States has the world’s most extreme weather. No other region on the planet suffers from a combination of hurricanes, tornadoes, droughts, floods, wildfires, blizzards, heat waves, and cold snaps (source: @UberFacts).

Parliamentary highlights

House of Commons

Oral questions
Work and Pensions (including Topical Questions)
United Kingdom Internal Market Bill: Second Reading
UK steel industry – Jessica Morden

House of Lords 

Oral questions
Impact of anti-obesity strategies on people suffering, or recovering, from eating disorders – Baroness Bull
Increasing prosecutions and convictions in rape cases – Baroness Gale
A permanent programme of free school meals and activities during future school holidays – Baroness D’Souza
Government discussions with UK-based motor manufacturers about access to export markets – Baroness Quin
Covid-19 update – Lord Bethell
Immigration and Social Security Co-ordination (EU Withdrawal) Bill – Committee stage (day 3) – Baroness Williams of Trafford

Scottish Parliament 

No business scheduled

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