This month has seen mainland Europe and the UK impose tighter restrictions, evolving policy framework across the US, Europe and China, and the International Monetary Fund (IMF) providing hope by increasing their projections for global economic growth in the year to come.

The second wave and tighter restrictions


We have seen a second wave of coronavirus cases in the past month, even after factoring in the increase in testing. As a result, countries have responded rapidly and in a more structured and decisive manner than previous attempts.

Since the 26th October, Italy has closed all non-essential activities e.g. bars and theatres from 6pm and plans to keep restrictions in place for one month.

The German Foreign Minister declared Switzerland and Poland to be risk areas, which means travellers must be tested and enter a mandatory quarantine upon their return to Germany.

On the 31st October, Boris Johnson revealed the UK government’s plan for a second lockdown from Thursday 5th November to the 2nd December.

But what does this mean for us?

From Zoom calls with our families or business partners to home workouts, many of us have already adapted and innovated to the challenges of a lockdown and have found ways to keep spirits high and to keep businesses alive.

Evolving frameworks for a post coronavirus world

Major central banks are reviewing their policy frameworks and are in the process of adopting new ones. A key objective behind these reviews is to lift inflation and inflation expectations sustainably back to their targets.


The Federal Reserve, the central bank of the US, announced a statement on long term goals which explicitly stated they are willing to allow inflation to overshoot targets.

Similarly, on the 9th October 2020 the European Union agreed to a new €672.5 billion Recovery and Resilience Facility (RRF). A new tool for public investment and reform following coronavirus which will help member states address the economic and social impact of coronavirus whilst
ensuring their economies undertake the green and digital transitions, becoming more sustainable and resilient.

By incentivising national governments and companies alike to consider social and environment impacts as a core focus, one would hope to see Europe continue to be a leader in the ethical investing space.

China are finalising their five-year goals, during this process they have acknowledged growing inequality, environmental issues, and lack of quality innovation as priorities. They aim to tackle these issues by firstly, removing a hard target on “GDP Growth” and move towards “GDP per capita”.
GDP per capita is the average economic output per person and used as a crude measure for how developed a country is and the wellbeing of its citizens.

Their GDP per capita currently sits at around $10,000 which is comparable to Brazil & India.

For reference, US and Australia sit at around $63,000 and $57,000, respectively.

China have pledged to reduce earnings gaps between rural and urban residents, this may be achieved through a system they refer to as “dual circulation”.

What they mean by this is they wish to become more self-reliant on their own domestic resources and means of production, and to be supplemented by international imports.

They have once again made a strong emphasis on technology and innovation through government funding. Historically, when resorting to government funding, China have struggled with mass fraud due to poor due diligence on the government’s side.

It will be interesting to see how this is controlled moving forward and to see how China has learned.

Hope from the IMF

In June 2020, the International Monetary Fund (IMF) projected global growth to be -4.9%, however, they have recently upgraded their projection to -4.4%. While it may seem to be a small upgrade it shows how in only four months, we have risen to the challenges of coronavirus much more quickly than anticipated.

Looking ahead

Over the coming week, the results of the US presidential election will be announced.

Regardless of whether the Democrats or Republicans succeed, evidence suggests once a decision has been finalised and certainty resumes, the US markets typically rise.

China seems to have matured into acting more like a developed country in considering both environmental and social impacts or policy decisions and Europe are pushing towards a more socially responsible, sustainable environment.

While certainly a difficult and challenging time for us all, there are plenty of reasons to believe we are in a much healthier place than April of this year and hopefully we can move on from coronavirus and to a more prosperous 2021.


Kindest regards,
Aidan Briggs
Head of Operations