The political situation in the US continued to dominate the news headlines last week with President Trump impeached for the second time during his term. National Guard troops have been deployed to Washington D.C. amid safety concerns regarding the upcoming inauguration of President Elect, Joe Biden, taking place this Wednesday. President Elect, Joe Biden has announced his plan to issue a subsequent stimulus package, amounting to $1.9 billion to boost domestic consumption and this will include $1,400 stimulus cheques and $350 billion in state and local aid. He has also proposed to raise the minimum wage to $15 per hour and has encouraged widespread adoption of the vaccine which has started to be rolled out across the US.

Restrictions tightened further in the UK, with travel corridors closing until mid-February to restrict the spread of the new COVID-19 variant. Any travellers arriving at UK borders must provide evidence of a negative test in the preceding 72 hours.

The UK economy declined by -2.6% in November, with high street shops and restaurants being forced to close with the tiered lockdown system in place. This was still way ahead of expectations, but November’s decline was a clear example of the economic impact caused by a lockdown given the prior months of May to October all generated positive GDP growth as the country phased out of the national restrictions. The UK is a service dominated economy and the transition to a more resilient remote working environment has been successful, enabling more companies to trade effectively during the pandemic. However, following the national lockdown imposed in December by Boris Johnson, the likelihood of the UK entering a double-dip recession is high, should we remain in full lockdown for the next two months.

Elsewhere, China’s economy expanded 6.5% in Q4 of 2020, amounting to a 2.3% annual GDP growth in 2020 with the International Monetary Fund predicting that China will be the only country to experience growth at all. China’s economic growth figures have historically faced scrutiny over their reliability. However, the country was quick to react to the virus and has benefited from being a strong exporter following the trade deal agreed with the US.

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All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 18th January 2021.