In the UK, Omicron infections are running at 200k a day, according to the UK Health Security Agency, based on new modelling. The spread of Omicron is very fast, and has arrived in China, which has now reported its first two cases of the novel variant.
This morning, at least 20 listed companies shut down their operations in Zhejiang, a province in eastern China and major manufacturing hub.
Unless China abandons ‘zero-covid’, it will have to continue imposing more stringent lockdowns, due to the increased transmissibility of Omicron. The pressure on global goods prices will not subside as quickly as currently expected.
For Europe, the energy crisis is worsening again. UK natural gas futures jumped on Monday to new highs. It is a similar story in continental Europe.
But once again, the UK’s resilient labour market should help to counterbalance some of the erosion in spending power from higher energy prices.
The number of payrolled employees (PAYE data) climbed 257k to a record 29.43 million in November and is now up 424k on February 2020 levels.
The major sectoral drivers of the UK economy remain firmly embedded: the resilience of the labour market in the UK, and the concentration of employment growth in a number of key service sectors (such as professional, scientific & technical), will help to prop up demand over a difficult winter period ahead.
