Weekly Client Update – Friday 25th June

Local update

Hundreds of Islanders were ‘effectively freed’ from isolation on Wednesday when Jersey’s Chief Minister, John Le Fondre, announced major changes to isolation requirements. With effect from Wednesday’s announcement, direct contacts who have had both doses of an MHRA-approved vaccine more than 2 weeks earlier, will not be required to self-isolate beyond receipt of a negative day zero test. This applies to direct contacts from both travel and on-island situations. Meanwhile a decision will be made next week as to whether children who are identified as direct contacts will still be required to isolate.

The Chief Minister also urged Islanders to continue working together in order to ‘enjoy a summer of freedom’ he said ‘I want to thank all islanders for your continued resilience, cooperation and positivity as we navigate our way to a new normal-it is in sight’. Senator Farnham also said ‘there was a clear pathway in place to remove the remaining restrictions’. From next Tuesday, new arrivals will also be able to present evidence of an MHRA-approved vaccination wherever the vaccination was administered; however all non CTA (Common Travel Area) arrivals will have their records checked at the border.

On Wednesday the Uk confirmed a rise of 16,135 new Covid cases. Between 17 and 23 June, 79,481 people were confirmed positive with Covid. This shows an increase of 43.9% compared to the previous seven days. Jersey has also been experiencing a surge in known active cases with the figure currently standing at 98 known cases with 1,298 known active contacts although it was also revealed there had been no ‘Covid related’ hospital admissions for three months.

Meanwhile fully vaccinated arrivals into Guernsey will not have to Isolate from next Thursday 1 July.

In other news, as the British & Irish Lions Rugby squad flew to Edinburgh to prepare for their warm up match against Japan on Saturday, the team manager Warren Gatland said they may well return to Jersey after their summer tour of South Africa to allow the squad to ‘de brief’ whilst they may also avoid the need to Isolate before returning to the Uk. Princess Anne also visited the Island yesterday on her first visit for 2 years. In glorious weather she had a busy day officially opening the new ‘le Quennevais School’ as well as the new State of the Art ‘Strive’ elite training facility and the new Butterfly enclosure at Jersey Zoo.

And finally, the Jersey Government is set for a huge cash windfall after JT agreed to sell a majority stake in its high tech ‘Internet of Things’ division in a deal believed to be worth £200 million. The proceeds of the sale to private equity firm Perwyn, are due to be shared between the telecoms firm and the Government, which is its sole shareholder. It is unknown how the proceeds will be divided between the two at this stage.

Mixed markets

London-listed stocks had no standout winners or losers in the FTSE 100 yesterday, which fell by 0.2%. JD Sports Fashion led the index at +1.8%, while Royal Dutch Shell turned in a good day, adding 1.5%. Shell got its push from the jump in the price of oil, following data that showed US inventories of crude oil have declined thanks to a rebound in travel.

In the US stocks yesterday, the S&P 500 and The Dow Jones 30 were marginally in the red and the NASDAQ100 was close to flat. In the S&P 500, consumer discretionary stocks enjoyed a positive day, while utilities and materials stocks performed the worst on aggregate. Leading the S&P 500  yesterday was Tesla, adding 5.3% then climbing further in after-hours trading, helping to limit its year-to-date losses to 7%. However, the company’s share price remains around 25% below its 2021 high. Tesla, Twitter and Under Armour rounded out the top three performers in the index yesterday, adding 4.3% and 3.7% respectively.

The threat of inflation

The Bank of England has warned that inflation is likely to exceed 3% by the end of the year, if only for a temporary period. The bank had expected inflations to peak at 2.5%, but a surge in consumer demand and rapid increase in energy prices will push it higher than expected.

In May, UK consumer price inflation came in at 2.1%, which already exceeded forecasts, surpassing the bank’s 2% target for the first time in 2 years. Whilst core inflation increased from 1.3% in April to 2% in May. Core inflation excludes volatile food and energy prices.

Chief economist Andy Haldane, has warned that the “tiger of inflation” is incoming and has urged policymakers to cut the bank’s £895 billion quantitative easing program by £50 billion.

The threat of inflation hindering the country’s economic recovery has certainly reduced the level of consumer confidence, despite the initial positivity after the opening of shops not so low ago. GfK’s consumer confidence index stayed at -9 this month and the measure for the country’s prospects for the coming year fell by six points. However, confidence in personal finances has remained strong for the past year and for the year ahead – up 4 points and one point, respectively.

Travel changes not good enough

Business leaders like Easyjet chief executive, Johan Lundgren, have criticised the travel changes, saying that they are too cautious and that the government’s timetable was not ambitious enough.

The general consensus among business leaders is that the changes to the travel green list and allowing double jabbed travellers to holiday overseas for summer, is simply not enough to save the holiday season for the travel sector.

Chief executive Johan Lundgren welcomed the addition of some countries but he added: “This is still not the safe and sustainable reopening of travel the government promised”.

Travel operators have naturally been lobbying for a quicker lifting of restrictions to holiday destinations as well as the extension of government measures. They need this in order to survive through this period and allow thousands of staff members to keep their jobs.

Good and bad news for state pension aged people

After some rule changes, there is good news and bad news for state pension aged people regarding bus transport. The good news is that they may soon be able to apply for an older person’s bus pass which provides free travel perks to retirees. However, the bad news is that the qualifying age for this support is set to rise over the coming years. In addition, those based in England will only be able to get the free pass once they reach the female state pension age, regardless of whether they are a man or a woman.

Currently, most people will reach their state pension age when they turn 66. The state pension age, for both men and women, will reach 67 between 2026 and 2028 under the Government’s current schedule. Thereafter, it will rise to 68 by 2046.