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CHART OF THE DAY: Resurgence of pandemic in the U.K.

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The sharp sell-off across financial markets on Monday is linked to fears about a global resurgence of the pandemic. Nowhere is that more evident than in the U.K., where R – the reproduction rate of COVID-19 – is approaching 1.7. That is akin to a nuclear event in terms of public health. An R at that reading could conceivably result in another round of lockdowns among select communities in the U.K. or a general lockdown.

At risk is the possibility of another economic lockdown.

Given the economic and financial risks, the prospect of another economic lockdown is one reason why the Bank of England is considering turning to negative interest rates to bolster economic activity should that happen. We continue to make the case that risks to the U.K., United States and global economic outlooks are skewed to the downside until there is a vaccine. Until there is a global plan to produce and distribute a vaccine, accompanied by follow-up health care, the global economy will not experience a meaningful recovery. No vaccine, no recovery.

For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.

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About Joseph Brusuelas

@JoeBrusuelas

Joe Brusuelas, “chief economist to the middle market,” is the preeminent voice championing issues and policies facing midsize companies in the United States and around the world. An award-winning economist, Brusuelas has more than 20 years’ experience analyzing U.S. monetary policy, labor markets, fiscal policy, international finance, economic indicators and the condition of the U.S. consumer.

A member of the Wall Street Journal’s forecasting panel and the UCLA Anderson School of Management's Board of Directors, Brusuelas regularly briefs members of Congress and other senior officials regarding the impacts of federal policy on the middle market and the factors by which middle market executives make business decisions. He also frequently offers his insights on the U.S., Canadian and global economies in the financial media. In 2020, he was named one of the 100 most influential economists by Richtopia. In December 2023, Brusuelas and the economics team were recognized on Bloomberg's list of Best Bond Forecasters after correctly predicting where the benchmark Treasury would end the year.

Before joining RSM in 2014, Brusuelas spent four years as a senior economist at Bloomberg L.P. and the Bloomberg Briefs newsletter group, where he co-founded the award-winning Bloomberg Economic Brief. Earlier in his career, he was a director at Moody's Analytics covering the U.S. and global economies for the Dismal Scientist website. He also served as chief economist at Merk Investments L.L.C. and chief U.S. economist at IDEAglobal.

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