“Its Entirely Feasible That Herd Immunity Has Been Reached In The Current Environment”

As Covid cases are starting to climb aggressively again in a few European countries – with both Austria and the Netherlands imposing fresh lockdowns – DB’s Jim Reid writes that “here in the UK, where there has been much attention internationally, we have possibly moved into a new phase of the battle against the virus.”

According to the credit strategist, while cases have been fairly high since the summer, from around the time of the European football championships and the lifting of restrictions on July 19th, the UK has not seen the exponential rise that could overwhelm the health service that many have warned about for months. Furthermore, evidence from the ONS suggests over 90% of adults have antibodies, whilst 80% of the 12+ population have had two vaccine doses now.

Instead of rising exponentially, new cases have been going through mini-waves, likely due to unvaccinated school children returning in September, the colder weather and then the on and off of half-term. After trending down for the last 2 and a half weeks new cases are starting to pick up again, but with booster jab momentum starting to accelerate after a slow start (a huge 532k yesterday), high antibody levels and some evidence that around 80% of 5-14yr olds  have been infected (the highest of any age group), its entirely feasible that herd immunity has been reached in the current environment and that new case levels will continue to be range bound.

Indeed, new admissions to hospitals are trending 20-25% of the level they were in January of this year even though cases have been at similar levels; fatalities are 10-15% of these peak levels.

And while the credit strategist notes that we may be faced with waning immunity that changes this equation in the quarters ahead, it is also possible that the virus (outside of a surprise new mutation) has less impact on a continually jabbed or covid exposed population. Meanwhile, new medicines in the pipeline like the Merck and Pfizer anti-viral pills should only help further.

As Reid concludes, “there is certainly lots of criticism you could lay at the door of UK for how they’ve handled the pandemic but it is currently showing one template out of Covid. It could have enough immunity through vaccines and infections to get through this winter better than others and without further restrictions.” And while the strategist concedes that these are famous last words, it is certainly the case that most of the scare stories of the last few months have not materialized in the UK which gives other heavily countries hope too.