As the COVID-19 second wave takes hold, differences in government responses appear unable to explain differences in infection rates across European countries. Instead, individuals are making their own decisions on whether to stay home.
Where Are Caseloads Rising?
With UK Prime Minister Boris Johnson chairing an emergency COBRA meeting today following the exponential growth in UK cases, we look at COVID developments in some of the main European hotspots.
Over the last seven days, the UK has registered 27,500 new cases, or 41 per 100,000 population. This is a 31% weekly rise, increasing the total number of cases by 7.3% to 401,122. The daily 3d moving average is rising sharply and yesterday stood at 6.45 cases per 100,000 population (Chart 1). This figure is in the 85th percentile of daily cases, which, at the current rate of increase, will rise to the peak of the first wave in the next five days.
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As the COVID-19 second wave takes hold, differences in government responses appear unable to explain differences in infection rates across European countries. Instead, individuals are making their own decisions on whether to stay home.
Where Are Caseloads Rising?
With UK Prime Minister Boris Johnson chairing an emergency COBRA meeting today following the exponential growth in UK cases, we look at COVID developments in some of the main European hotspots.
Over the last seven days, the UK has registered 27,500 new cases, or 41 per 100,000 population. This is a 31% weekly rise, increasing the total number of cases by 7.3% to 401,122. The daily 3d moving average is rising sharply and yesterday stood at 6.45 cases per 100,000 population (Chart 1). This figure is in the 85th percentile of daily cases, which, at the current rate of increase, will rise to the peak of the first wave in the next five days.
France and Spain are already registering daily cases far higher than the peak of their first waves (Chart 2). Infections are rising more quickly in France – the country recorded 71,000 cases last week (109 per 100,000 population), a 21% WoW rise. But Spain recorded more cases – 77,700 (135 cases per 100,000 population), a 14% WoW rise. In population-adjusted terms, Spain is recording the highest number of cases in Europe and is only behind Israel (353) worldwide.
Interestingly, cases in Germany and Italy have been slower to pick up than in France, Spain and the UK (Chart 3). Both countries are registering cases in the 74th percentile and a similar number of weekly cases per 100,000 population (15 and 18, respectively). According to the Oxford University Stringency Index, neither country has imposed significantly tighter restrictions relative to Spain or France since cases started to rise. In fact, Germany currently has the lowest level of government restrictions.
Cases have, however, started to rise more quickly in Germany in the last few days – the country recorded 12,300 infections over the last week, a 28% WoW rise.
The US has also seen cases rise in recent days. The country recorded 282,000 cases last week, a 12% WoW rise. The country continues to register in excess of 80 cases per 100,000 a week, higher than most European countries. Weekly population-adjusted fatalities have also been consistently higher (Chart 4) but remain low relative to the first wave.
Deaths Remain Low
In a recent statement, the UK government’s chief scientific adviser, Patrick Vallance, warned that cases could rise to 50,000 per day by the middle of October. Plotting deaths over cases for the UK vs globally (Chart 5), we see that the percentage of fatalities has fallen. Currently, 0.6% of UK cases are resulting in a death (0.5% across the EU4). Using this percentage as a crude estimate, we may see around 300 deaths per day in the worst-case scenario.
The relatively low number of deaths in Europe starkly contrasts the first wave. In all of our charts above, deaths have not increased with cases. Inevitably, more testing yields higher case numbers and so the number of deaths per case will fall. However, a 21-day time lag means deaths may yet rise. For example, Spain recorded over 800 deaths last week, a 572% MoM rise and the largest 7-day rise since May. Developments in the US may yield a clearer picture of what we could expect as cases pick up (Chart 6).
Mobility Falls Despite Holidays
As cases rose, Apple mobility data started to fall in Europe at the start of August (Chart 7, top right). Mobility fell more significantly in Germany, Spain and Italy, while data from France shows a small tapering off followed by another rise towards the end of August (Chart 7, top left). The UK appears to have been more cautious in its return to pre-lockdown mobility, rising steadily throughout June-August.
Interestingly, EU mobility fell in August despite no overall rise in government action (Chart 7, bottom left). This is in contrast to developments in May and June, where the easing of restrictions resulted in significant increases in mobility. Indeed, European countries have been more mobile than anywhere else in our mobility sample (Americas, Asia and Oceania). Germany and Belgium are currently at particularly high levels of mobility (Chart 7, bottom right).
The fall in mobility may reflect seasonality – in summer months fewer people travel to work. This could explain a rise towards the end of August. There is, however, evidence that people were more reluctant to move across borders. We track flight data from nine of Europe’s largest airports. The number of flights fell throughout the summer months, indicating a lack of demand for international travel.
In all, mobility does once again appear to be responding to an increase in cases, while government restrictions do not. The less stringent government response is most likely a reflection of the rising economic pressures and what seems to be a less fatal wave.
Sam van de Schootbrugge is a macro research economist taking a one year industrial break from his Ph.D. in Economics. He has 2 years of experience working in government and has an MPhil degree in Economic Research from the University of Cambridge. His research expertise are in international finance, macroeconomics and fiscal policy.
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)