I live and work in Belfast. This morning, the NI executive announced a significant increase in COVID restrictions for the next 4 weeks in an attempt to curb the rise in infections in the province. They are mainly focused at the hospitality sector (which is being completely shutdown) along with various other restrictions (including closing schools for one extra week) but importantly allowing general retail to remain open. I also watched Keir Starmer's speech yesterday and was surprised to see him finally adopt a position contrary to the government's position - i.e. a similar circuit break to what has been introduced today in NI. My conclusion from that speech is the political consensus in London is a) COVID is going to get much worse across the UK over the next few months and b) it's a foregone conclusion that the tory government is going to be forced to impose stricter measures soon. This is NI today but it is soon going to be UK wide. Even if it isn't, very soon most regions of the UK will be clamoring for "very high risk" Tier 3 status (see next paragraph for reasons why). Keir suggested a circuit break of 3 weeks. I believe the shutdown in Northern Ireland will last longer than the 4 currently outlined because the data we see is effectively 3 weeks old anyway - so even if the virus is stopped in it's tracks by these measures today, it will still grow over the next three weeks - is it realistic to imagine that in four weeks while the virus is at it's peak that we will go back to normality? Possibly but I wouldn't bet on it.

The reality is that in Belfast at least retail trade started to drop off last week and walking round the city center today it is completely empty. Although doors are open, the message is getting through to people and discretionary spending is reducing at a rapid rate both to curb the virus and because tough times are ahead (online will still benefit but not to the extent it did last time because people are going to be more worried about their finances). Let's be optimistic and say in city centers it stabilizes at 50% of normal trade over the next few months. Retailers could cut staff hours and use the job retention scheme but see their staff costs…

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