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UK Freedom Day+1, A Guest Comment

David R. Kotok
Wed Jul 21, 2021

Reader Kevin Humphreys is an independent financial analyst based in London. He is a specialist in European and UK financial market analysis, with 35 years in the Treasury Ministry, investment banking, and brokerage.
 
Kevin sent along some incisive remarks on the British government’s handling of the pandemic in the runup to “Freedom Day” there. He is particularly concerned about the government’s strategy as it relates to young people and the large fraction of the population that is doing COVID testing at home (which is free in the UK); and he worries whether the inevitable outcome of that strategy may be a botched version of herd immunity that is immensely costly in sickness and lives.
 
We thank Kevin for sharing his thoughts and giving us permission to pass them on.

David R. Kotok
Chairman of the Board & Chief Investment Officer
Email | Bio
 


 

Is bluff and double bluff a tactic on the
way to herd immunity for the UK?

by Kevin Humphreys

 
Many in the UK have had the opportunity over the last 16 months to form a view on PM Boris Johnson and his governments’ handling of the Covid-19 crisis in the UK, and most, like myself I expect, have drifted from an ‘A+’ (vaccine rollout) to a solid ‘D’ (the PPE farce amongst others).
 
Unfortunately, the current situation has seen ‘Freedom Day’ come and go with a whimper, and more than a little confusion follow.
 
Granted, there was always going to be a degree of personal responsibility required to prevent full unlocking turning into an unmitigated disaster, but when vaccination rates drop to around 147,000 per day and the introduction of eligibility of all over 18’s is seeing so little take-up, it is understandably a concern to many. Suddenly, 54% of adults fully vaccinated doesn’t look quite so impressive, unlike when the older age groups took up the offer vigorously.
 
Boris and his team have unfortunately added to the confusion and uncertainty since the weekend, with the PM announcing just yesterday, on Freedom Day itself, that many venues would be forced to require a domestic vaccine passport from the end of September. Add to that the business minister suggesting this morning that those ‘pinged’ on the NHS app (as having been in close contact with someone who subsequently tested positive) should self-isolate but could also ‘make an informed decision’ on that.
 
We can assume that the government’s position is that to encourage take-up amongst younger adults they will use potentially restrictive future measures as a stick, hoping to boost adult vaccination numbers back up to around 80%+ (as a minimum). That is a credible notion and will eventually work, though in the meantime case rates will rocket.
 
Using a Dominic Cummings-like tactic, the government appear to feel that they have headed that criticism off already. By parading the scientists in front of the country over recent weeks to demonstrate the break in the link between infections, hospitalizations and deaths, and in recent days raising the estimate of potential daily cases to 150,000–200,000, they appear to be going with the ‘forewarned is forearmed’ defence.
 
While that is all very well, I have a slight concern on two fronts, firstly that many younger adults currently appear to be shunning ‘informed decisions’ (as can be evidenced by empty vaccination centre appointments across the country), and secondly that many positive cases amongst this group have and continue to go unreported through official channels.
 
With all the population having access to free home lateral flow tests, there will be thousands of positive cases unreported; and while we can hope that most of those will self-isolate, there is no guarantee of that at all (or at least not for the recommended duration).
 
Anecdotally, in the last few weeks I am aware of hundreds of positive cases in our village and neighbouring towns, most identified by home lateral flow tests, yet only some followed up by NHS PCR tests (thereby making it into the official data).
 
Personally, my daughter, aged 19 and Pfizer double-vaccinated in February (due to employment in a care environment), contracted Covid from an unknown source in a social setting 2 week ago and was seriously unwell for several days, with one night requiring emergency services assistance. My landlord, AZ double-vaccinated host of a hospitality venue, contracted Covid last week and after a couple of uncomfortable days and nights is thankfully now on the road to recovery.
 
As a precaution, I have been home lateral flow testing for the past week in a period of self-isolation and, despite no external contact and limited contact with the landlord, today tested positive (again AZ double-vaccinated back in May). While my discomfort has thus far been mild, with a streaming nose, headache and lethargy, it appears that if this is the Delta variant then it is significantly more transmissible than some scientists may think, and that the symptoms could be very different to those experienced in original infections in 2020.
 
While scientists and academics have been exceptional in developing vaccines against Covid- 19 thus far, it is becoming increasingly clear that we are not fully ahead of some of the variants, at least in terms of transmissibility.
 
With that in mind and following Freedom Day for the UK yesterday, I do not agree with many market commentators that the eyes of the world are on the UK experiment merely to assess how quickly business and ‘normal life’ can bounce back. Instead, I believe it is more a question of what does herd immunity look like? While nobody ever really believed that proponents were suggesting a pandemic be allowed to rip through an unvaccinated population unchecked, in the UK we may well be at the start of an experiment in managed herd immunity.
 
Whether we like it or not.


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