Dear readers, In 2020, the fun-loving cavalier turned into a Christmas-cancelling puritan. But this year UK prime minister Boris Johnson looks set to relax again, presiding over ever-loosening restrictions. On Monday he promised a “one-way road to freedom” as he unveiled a strategy for return to normality by June 21 — midsummer’s day. That’s too slow for some. One MP described the announcement as a “hammer blow”. Some overstretched pubs are still fearful they will have to call time for good. But the timetable is in line with Lex’s prediction back in December. A note titled “Midsummer Gladness” argued that would be the point when vaccination would allow a return to semi-normality. The news certainly provided a boost for the travel sector. Thomas Cook, the online travel company, reported a 60 per cent leap in traffic on its website following the prime minister’s announcement. Europe’s largest tour operator Tui reported a 500 per cent week-on-week rise in bookings for holidays in Greece, Spain and Turkey from July onwards.  Britain was on the cusp of becoming the first country in the world to safely resume international travel and trade at scale, said Heathrow’s chief executive John Holland-Kaye on Wednesday. Understandably he sounds hopeful. The airport, taken private by a consortium led by Ferrovial in a highly leveraged takeover in 2006, made a £2bn loss last year, pushing net debt up almost 6 per cent to £13.1bn. Though it has enough liquidity to last until 2023, it needs passenger numbers to bounce back. Last year, they fell to levels not seen since the 1970s. Anglo-Spanish airline group IAG is similarly in dire need of a recovery in air traffic. Its British Airways subsidiary on Monday announced the deferral of £450m of pension contributions. With its fleet largely grounded, it needs to conserve all the cash it can. But travel to countries that have not got Covid-19 under control will be constrained. Rating agency Moody’s expressed caution, saying the timeline for easing lockdown restrictions could still be derailed by concerns over new Covid-19 variants. Trade body Iata this month warned that travel demand might recover only 13 per cent compared with last year’s very low level. If that happened, airlines would go on burning cash throughout the year.  On a more general point, there is agreement though. There is plenty of pent-up demand. Household bank deposits were up 10 per cent at the end of December compared with a year earlier. This is not evenly spread. More people report that their savings have fallen than risen. Richer households tend not to spend their wealth. Even so, the huge build-up of cash savings — the most liquid subset of household wealth — means the hospitality sector stands to benefit. Many economists expect a Roaring Twenties-style splurge.  Underpinning the optimism is more evidence of vaccine success. New data from Scotland this week showed a very substantial fall in hospital admissions after the rollout of vaccines. The results in older age groups were “very encouraging”. That is significant because several countries including Germany have so far opted only to use the Oxford/AstraZeneca vaccine for younger age groups.  The benefits of vaccination are also not evenly spread. It particularly helps face-to-face services worst hit by Covid-19 social-distancing requirements. Vaccination will make less difference to trade-dependent sectors grappling with the complexities of Brexit, the other big drag on the UK’s economic performance. Here, too, a positive story can be told. After four years when many global investors shied away from UK equities exposure, the recent trade deal, however limited, provides some reassurance. Funds are now flowing into domestic stocks. They are seen as relatively cheap and beneficiaries of a tilt towards value stocks. Sterling has rallied sharply this year. Having the fastest vaccine rollout of any large country has given the UK an unusual first-mover advantage, analysts say. Should that continue, expect a degree of exuberance to return. Enjoy the rest of the week, Vanessa Houlder Lex writer

Ukraine is poised to start vaccinating its citizens after it received the first batch of Oxford/AstraZeneca doses produced by India’s Serum Institute through licence agreements. “First 500,000 vaccines against Covid-19 [have] arrived," President Volodymyr Zelensky tweeted on Tuesday. "We will start vaccination ASAP.” The delivery of the jabs under the CoviShield brand follows delays that the country of 41m, like many other developing economies, has experienced in securing supplies. Health minister Maksym Stepanov flew to India on Thursday in an attempt to speed up the delivery of 12m doses of Oxford/AstraZeneca and US-developed Novavax vaccines, which were secured this month through UK-headquartered Crown Agents. He said on Monday that while there he negotiated the supply of an additional 5m Novavax doses. He expects a total of 15m of those vaccines for Ukraine. It was not immediately clear how many Oxford/Zeneca shots Ukraine will receive through the agreements. Officials said on Monday that the delivery of 117,000 Pfizer-BioNTech vaccines expected this month under the World Health Organization co-led Covax programme had been delayed until March. Covax is to supply Ukraine with as many as 3.7m Oxford/AstraZeneca doses in the first half of this year, officials said on Tuesday. Kyiv has ruled out purchasing vaccines from Russia, which in 2014 occupied Ukraine's Crimean peninsula and fomented a proxy war in far eastern regions that has claimed nearly 14,000 lives. Deep lockdowns imposed last spring helped Ukraine avoid a first large wave of infections but cases have mounted after restrictions were eased over the summer. The country has registered 1,311,844 cases, including 134,758 active ones and 25,309 deaths.

Shares in UK-listed travel companies rallied strongly on Tuesday as government plans to lift coronavirus restrictions spurred hopes that bookings across the industry may finally pick up after a miserable year. The biggest advance was in easyJet, which rallied more than 8 per cent after the low-cost carrier said bookings for flights from the UK had more than quadrupled week on week. On a second day of gains for the sector, British Airways owner IAG and holiday company Tui were each up more than 6 per cent. The market gains came a day after prime minister Boris Johnson set out plans for an easing of lockdown. Non-essential international travel will be subject to review, yet restrictions could be lifted as soon as early summer. "Things are looking brighter due to the efficacy of vaccines and growing support for digital health passes," analysts at Jefferies said in a note, adding they expected domestic travel to be the first to recover. Intercontinental Hotel Group, owner of the Holiday Inn and Crowne Plaza chain, was also up 3.5 per cent as traders looked beyond a $280m annual pre-tax loss to focus on the prospects for a recovery later in the year. Even after the recovery, however, the stocks remain at depressed levels. IAG and easyJet are down about 56 per cent and 29 per cent, respectively, since the start of 2020. "The global airline industry must still rebuild its balance sheet," the Jefferies analysts added.

Macau gaming stocks soared on the day after the former Portuguese colony lifted all quarantine restrictions for mainland Chinese visitors. Galaxy Entertainment shares closed 8.9 per cent higher while SJM Holdings climbed 7.9 per cent. Sands China gained 7.5 per cent, Melco International went up 6.3 per cent, while MGM China and Wynn Macau each rose about 5 per cent. The territory has opened up to mainland Chinese travellers and analysts have predicted a strong performance during the lunar new year holiday period. “Macau GGR increased significantly during the third week of February,” estimated analysts Vitaly Umansky and Tianjiao Yu from Sanford Bernstein in a note on Monday. “Macau will continue to experience headwinds during the first half of 2021, but we see a strong improvement beginning in the second half as Covid-related travel constraints begin to fall away.”

EasyJet has seen a surge in bookings since Boris Johnson unveiled his "roadmap" out of lockdown that included rebooting international travel later this year. Bookings for flights from the UK have more than quadrupled week on week, the low-cost carrier said, while its package holiday unit has experienced a more than seven-fold jump in bookings. A UK government taskforce will explore how to safely remove restrictions on mass travel as part of the path out of lockdown announced on Monday, although this is not expected until mid-May at the earliest. The travel industry was shaken by warnings not to book holidays earlier this year, and has broadly welcome the UK government’s plan. "The prime minister’s address has provided a much-needed boost in confidence for so many of our customers in the UK," said easyJet’s chief executive Johan Lundgren.

Nigeria's Covid-19 case count could be in the millions rather than the official tally that puts it in the tens of thousands, a survey by a national public health institute has found. The seroprevalance of 10,000 people in four states found that one in five of those tested have been infected. For Lagos, Nigeria's biggest city, the findings from the Nigerian Centre for Disease Control suggest as many as 4m people have contracted the virus, compared with an official tally of just 54,000. The survey indicates that the "majority of sampled population are susceptible to the virus infection, which highlights [the] need for vaccines”, the NCDC director Chikwe Ihekweazu tweeted late on Monday. Nigeria has recorded roughly 1,800 coronavirus-related deaths. Nigeria's drugs regulator recently approved the Oxford/AstraZeneca vaccine and the country has secured millions of doses through the African Union and the World Health Organization-backed Covax facility. But, as in much of sub-Saharan Africa, the first deliveries have yet to arrive.

The UK labour market was all but frozen at the end of the year, with unemployment edging up and a previous pick-up in hiring stalling as the surge in Covid-19 infections put reopening on hold. The jobless rate rose to 5.1 per cent in the three months to December, a rise of 0.4 percentage points from the previous quarter and in line with expectations, official statistics showed on Tuesday. The employment rate of 75 per cent was 1.5 percentage points lower than a year earlier, with 541,000 fewer people in employment. The figures suggest that the extension of the government’s furlough scheme has helped to limit redundancies and stabilise the labour market, while keeping it in a state of suspension. They will reinforce calls from business and unions for support to be extended well after the reopening of the economy begins to lessen the risk of a further surge in job losses. “The government will need to provide ongoing help,” said Tej Parikh, chief economist at the Institute of Directors. "The Budget next week needs to provide a bridge for businesses to begin the process of rescaling and rehiring." The headline unemployment rate does not reflect the true extent of slack in the labour market. Real-time payroll data collected by HM Revenue & Customs suggest that despite small increases over the last two months, there are 726,000 fewer employee jobs in the UK than there were last February before the pandemic hit, a fall of 2.5 per cent. The biggest drop in payrolled employees has been among 18-24 year olds

Frasers Group has put investors in the UK retailer on notice over a potential impairment charge of more than £100m as lockdown restrictions on high streets drag on. The group behind Sports Direct and Evans Cycles, as well as the eponymous department store chain, said it anticipated taking a “material” non-cash accounting hit on the value of freehold properties and other assets. It comes a day after the UK government laid down plans for a “cautious” approach to easing lockdown, under which non-essential shops in England will not reopen until April 12 at the earliest. The company, run by billionaire Mike Ashley, cited “the length of the current lockdown, potential systemic changes to consumer behaviour and the risk of further restrictions in future”.

The UK health secretary insisted the government’s path out of lockdown is “irreversible” and added that if everybody pulled together England could emerge from the latest restrictions as swiftly as possible. “We are absolutely determined to come out of this as safely and as fast as possible,” Matt Hancock said, “but no faster.” He was speaking the day after prime minister Boris Johnson laid out his four-step plan out of the latest restriction measures that have closed hairdressers, bars, non-essential businesses and schools. The government stands ready to do “whatever it takes” to protect livelihoods and businesses, Hancock told Sky News on Tuesday. The UK prime minister said on Monday the “end really is in sight” as he outlined his plans to end all Covid-19 restrictions by mid-June. Chancellor Rishi Sunak, meanwhile, is preparing in his Budget next week to extend emergency support measures until the summer. He is expected to include measures to protect jobs and help businesses through weeks or even months of further disruption. “It’s very, very important that we can see the impact of one step before taking the next,” Hancock said on Tuesday, adding that it is a “judgment of how much of what we can lift and at what moment”. “If everybody responds and pulls together,” he added, “we can see the light at the end of the tunnel. The best way to get there is to keep abiding by the rules.”

Indian bond yields have jumped higher as investors fret over the government’s borrowing plans aimed at supporting an economic recovery from the pandemic. The yield on the 10-year Indian government bond rose to a six month high this week, touching 6.2 per cent. India has substantially increased its borrowing plans in order to help revive its economy from a steep coronavirus-induced slump. The government said it will borrow Rs12tn ($165.8bn) in the financial year starting April. The move in Indian bond yields has mirrored a rise in US Treasury yields, but analysts say it has been pushed higher by uncertainty over whether the government will be able to manage its ambitious borrowing targets for the coming year. “The market is not convinced,” said Suman Chowdhury, an analyst at Acuité Ratings. The government’s targets “will be difficult to absorb”, he added. The increase contributed to a 2 per cent fall in the benchmark Sensex equities index on Monday, although it drifted higher on Tuesday. The government is also budgeting a fiscal deficit of 6.8 per cent of GDP for the coming year. The government said however that it has laid out a “fiscal glide path” that will see the deficit cut to about 4.5 per cent by the 2025-26 financial year. Chowdhury said that investors were sceptical. “They believe the fiscal deficit may also be higher than what the government is talking about,” he said.

Intercontinental Hotel Group, owner of Holiday Inn and Crowne Plaza hotels, has warned that the difficulties of the “most challenging year” in its history have stretched into 2021 as new strains of coronavirus force countries to close borders and limit travel. Results on Tuesday showed revenues across the FTSE 100 group fell 48 per cent to $2.4bn in the year to the end of December 2020 while its earnings per share more than halved from 210 cents to 143 cents. It swung from a pre-tax profit of $542m to a loss of $280m. Revenue per available room - the hotel industry’s preferred performance metric - was still far below historic levels in the fourth quarter, it said. China, where a hard suppression of the virus has allowed greater easing of restrictions, had the best performance but the so-called revpar was still 18.2 per cent below 2019 levels. Europe, which has been hard hit by a third wave of the virus, performed worst of all the group’s regions with revpar 70 per cent lower year-on-year in the final three months of 2020. IHG said its economy brands had performed best and that its strength in that segment of the industry made it more resilient than rivals. Many economy hotels have been able to stay open to host essential business travellers such as those working in manufacturing and healthcare. “2020 was clearly the most challenging year in our history, with Covid-19 heavily impacting demand across our industry. 2021 has begun with many of these challenges still in place, with more meaningful progress towards recovery for the industry unlikely until later in the year,” Keith Barr, IHG’s chief executive said. The battered hotel group said that it had available liquidity of $2.1bn excluding the repayment of a £600m UK government loan due in March. It is targeting a reduction in costs of $75m this year, while still aiming to invest in the business for growth once borders reopen, it said.

HSBC will resume paying a dividend despite announcing a 34 per cent drop in annual profits after its global business was hit hard by the coronavirus pandemic. Europe’s largest bank performed slightly above analysts’ expectations in 2020 although it was weighed down by loan losses, reporting profit before tax of $8.8bn, down from $13.4bn the previous year. In the fourth quarter, adjusted profit slid 50 per cent year on year to $2.2bn, just above the $1.8bn estimated by analysts. The bank said on Tuesday that it would start paying a dividend of $0.15 a share after a Bank of England ban on shareholder payouts was partially lifted late last year. “We have had a good start to 2021, and I am cautiously optimistic for the year ahead,” Noel Quinn, HSBC chief executive, said in a statement. Read more here

India is facing a wave of domestic travel restrictions as the number of new coronavirus infections begins to climb after several months of decline. The western state of Gujarat has set up border check posts to screen travellers coming by road from neighbouring states, including Maharashtra, and will check arriving passengers at railways stations on inbound trains. The southern state of Karnataka has also sealed many roads and demanded travellers produce negative Covid-19 test results to continue their journeys. Tamil Nadu has also requested negative tests for incoming air passengers from certain states. The patchwork of abrupt restrictions and test requirements highlighted the likelihood of further disruptions in India from the pandemic, as cases have begun to increase after five months of steady decline. The seven-day moving average of India’s daily cases fell to a low of 11,000 on February 12 but has since risen to 12,900, a 16 per cent increase, raising fears that some areas of the country could be poised for surges. Of India’s most recent 1m cases, 34 per cent came from Maharashtra, home to Mumbai, while 22 per cent came from the southern state of Kerala. India has dramatically relaxed controls on most economic activities except for education, which has yet to resume. Most of India’s young school children have not set foot in a classroom since last March.

Headteachers have warned parents to expect a delay to the full return of secondary schools in England until the third week of March, as they implement government plans to test all pupils for coronavirus before returning to the classroom. Secondary and college students will have to produce at least one negative coronavirus test from March 8 before being allowed back into classes, under the plan published on Monday. Each pupil will have three tests at school before moving to twice-weekly home tests. Gavin Williamson, education secretary, said this would “reassure families and education staff” that extra measures were in place to ensure a safe return to schools. Primary school pupils will not be tested. Read more here

Carrie Lam, Hong Kong’s leader, said more than 40,000 people had already signed up for the city’s Covid-19 vaccination programme as she batted away rumours swirling around the jab she received. Lam said 42,000 people had registered to receive the mainland Chinese-produced Sinovac vaccination in the nine hours since registrations began. Hong Kong’s chief executive rebuffed online rumours that she and the city’s top officials had not received the Sinovac jab on Monday afternoon and had instead received a different inoculation, explaining that this highlighted the dangerous nature of misinformation. “We have to fight against smearing and untruthful reports in the community,” Lam said, adding that providing the public with information on the programme was vital for its success.

Asian shares were mixed after a rough day on Wall Street, where US technology stocks tumbled in the face of rising inflation expectations. South Korea’s tech-focused Kospi fell 0.5 per cent on Tuesday, Hong Kong’s Hang Seng rose 0.3 per cent and China’s CSI 300 index of Shanghai-and Shenzhen-listed stocks climbed 0.2 per cent. Japan’s market was closed for a national holiday. The Chinese stock benchmark suffered its biggest drop in more than six months on Monday over concerns that the country’s rapid recovery from the pandemic could bring on quicker removal of support for asset prices. On Wall Street on Monday, the S&P 500 shed 0.8 per cent, while the tech-centric Nasdaq Composite tumbled 2.5 per cent. Facebook, Amazon, Apple, Netflix and Google parent Alphabet all fell in what some investors suggested was the beginning of an overdue correction. A sell-off in US government bonds, returns on which are undermined by inflation, picked up on Monday, with the 10-year US Treasury yield, which moves inversely to price, rose 0.03 percentage points, to 1.37 per cent. That helped undermine US equities, as low long-term interest rates boost the value of companies’ future cash flows. With Japan on Holiday treasuries were not trading in Asia on Monday, delaying any further moves by yields until the European open. Investors will also be scrutinising Fed chair Jay Powell’s testimony to Congressional committees on Wednesday for any hint on whether rising inflation could push the Federal Reserve to end ultra-loose monetary policy. “The reality today is that inflation is a risk – core government bond yields are rising as markets reprice for better future growth”, said Kerry Craig, a global market strategist at JPMorgan Asset Management. “But some inflation may not be a bad thing, and the recovery has a long way to go before it becomes a problem.” Oil prices continued to rise, with Brent crude, the global benchmark, up 1.5 per cent at $66.24 a barrel. US marker West Texas Intermediate rose 1.4 per cent to $62.59.

The US on Monday reported its smallest daily increase in new coronavirus cases in more than four months, continuing recent glimmers of hope for the country's management of the pandemic. States reported an additional 52,530 infections, down from 58,702 on Sunday, according to Covid Tracking Project. It was the smallest one-day increase in cases since October 18. Over the past week, the US has averaged 64,034 new cases a day, which is the lowest the rate since late October. This represents a drop of 74 per cent from a peak rate in early January of more than 247,000 cases a day. However, Rochelle Walensky, director of the US Centers for Disease Control and Prevention, cautioned at the White House's coronavirus response briefing on Monday afternoon that while the average has been declining for the past five weeks, it is still "high" and on par with the summer surge when states in the sunbelt were among the most afflicted. Casting a shadow over Monday's figures, the US death toll topped 500,000 for the first time, according to Johns Hopkins University. Covid Tracking Project, whose data the Financial Times use for analysis, put the death toll at 490,382. "Since our dataset uses [New York State] reported deaths which does not include the more than 8,000 deaths that are reported by [New York City], our total death count is lagging behind other trackers that marked 500k deaths today," Covid Tracking Project said in a Twitter message, adding that it recognised coronavirus deaths in the US "are an undercount". Authorities on Monday attributed a further 1,235 deaths to coronavirus, the smallest one-day increase in seven days. The number of patients currently hospitalised in the US with coronavirus dropped to 55,403, the lowest level since early November. Figures on Monday tend to be lower than other days of the week due to weekend delays in reporting. Severe winter weather may also still be having a dampening effect on data from states due to closures of testing and vaccination sites and power outages.

Vaccination against coronavirus provides high levels of protection against Covid-19 infection, illness and death, according to three UK studies released on Monday that provide scientific support for the government’s road map out of lockdown. The first, carried out in Scotland, found that the Covid-19 vaccination campaign led to a “very substantial” drop in serious illness across all adult age groups. It is the clearest evidence yet that single doses of coronavirus jabs can significantly reduce the risk of hospitalisation, even among the elderly. Two other studies released by Public Health England echo findings released last week by scientists in Israel where vaccination has been even faster than in the UK. PHE scientists reported that the BioNTech/Pfizer vaccine reduced the risk of infection by more than 70 per cent three weeks after the first jab, rising to 85 per cent after the second dose. Despite the promising news, the government also released studies by modellers at Imperial College London and Warwick university that indicated that another 30,000 people could die in the UK from Covid-19 before the end of June, based on the current vaccination rate and speed of lockdown easing. Read more here

Asia-Pacific equities retreated on Tuesday after US stocks fell amid rising inflation expectations. The Kospi in South Korea fell 0.7 per cent and the S&P/ASX 200 in Australia dipped 0.2 per cent. Japanese markets are closed for the emperor’s birthday. Overnight in the US, the technology-focused Nasdaq Composite ended 2.5 per cent lower while the S&P 500 fell 0.8 per cent. Those moves came as a sell-off in US government bonds continued. “The nascent sparks of inflation we’ve seen recently and the corresponding sell-off in bond prices really reflects increasing positivity around the economic outlook,” said Kerry Craig, global market strategist, JPMorgan Asset Management. “A steepening yield curve usually helps to bolster value-orientated and cyclical sectors of the equity market.” S&P 500 futures were flat.

People in certain countries who experience serious side effects from Covid-19 vaccines via the Covax programme are eligible for compensation under a new deal signed by the World Health Organization. The agreement will allow individuals from Covax's Advance Market Commitment-eligible countries, a group of 92 low-and-middle-income economies, which experience "rare but serious adverse events" associated with vaccines distributed by the programme — the global initiative to supply shots to developing countries — to seek compensation. "This no-fault compensation mechanism helps to ensure that people in AMC-eligible countries and economies can benefit from the cutting-edge science that has delivered Covid-19 vaccines in record time," Tedros Adhanom Ghebreyesus, WHO director-general said. The deal — inked by WHO and US-based risk management services provider ESIS to administer the programme on behalf of Covax — is the first and only vaccine injury compensation mechanism. The programme will offer people "a fast, fair, robust and transparent process" for claims. The WHO said by providing the "no-fault lump-sum compensation" the Covax programme aims to reduce the need for recourse to the law courts. The mechanism, which will run until June 30 2022, will initially be financed through a levy charged on doses distributed through the Covax facility. The WHO expects about $105m in initial funds to be available for payments under the programme. The WHO is also working with Chubb to secure insurance coverage for the programme. The Covax facility aims to deliver at least 2bn doses by the end of the year, including 1.3bn to the 92 low- and middle-income economies.